Property and auto insurance purchases in the second quarter of 2022 were generally subdued with variations in some segments, according to the latest trends and outlook report from TransUnion, the global information and information.
The quarterly report found that home insurance purchases increased only slightly (4%) compared to the same period last year, mainly due to activity in the southern states where purchases increased 12% compared to last year.
Auto insurance purchases overall were down 3% from a year ago, apparently the result of a sharp drop in high-risk consumers, where purchases were down 22% from the second quarter of 2021 .
“We’ve been surprised by the buying behavior around the automotive space,” said Mark McElroy, executive vice president and head of TransUnion’s insurance business. “We can see the effects of supply chain disruptions and the lack of new vehicle inventory.”
TransUnion regularly reviews insurance buying trends and breaks down the data by geographic region, age and other factors. It uses customer engagement insights from insurance companies and extrapolates it to the wider industry. It complements research with field surveys of consumers to assess current market and insurance trends.
Several other key findings:
• When comparing consumers across credit scores, there was a clear outlier to the general trend in that consumers with high credit scores continued to increase their car insurance purchases.
• Renters insurance purchases decreased significantly (10%) in the second quarter of 2022. While purchases were down for all generations, baby boomer and silent generation renter purchases were down by 16% compared to the second quarter of 2021.
• Q2 2022 purchases among Gen Z renters were down 12% from Q2 2021. This may be attributable to an overall increase in rents: according to a joint analysis by TransUnion and the National Apartment Association of over than 300,000 rental units in the United States. , the median monthly rent price forces 17% from $1,365 per month to $1,599. Rising rents generally cause tenants to stay put rather than look for new apartments, the report concludes.
“The lack of new vehicle purchases has suppressed auto insurance purchases overall,” said Michelle Jackson, senior manager of property and casualty insurance at TransUnion. “Even with the influx of consumers purchasing their auto insurance as premiums rise due to industry-wide rate increases, this cannot overcome the suppressed purchase rates we are seeing among consumers who do not buy new cars, thus creating a purchase event.”
Migration impacts home insurance
Migration activity to southern states has prompted homeowners to purchase homeowners insurance. Overall, home insurance purchases saw a slight increase (4%) in the second quarter of 2022, compared to the same period last year. This trend was mainly driven by activity in the South of the United States, where purchases increased by 12% compared to the second quarter of 2021.
“We are still seeing an interest in moving to sunnier environments, which has led to an increase in home insurance purchases in states such as Florida and Texas, which ironically are more weather-prone states. extremes and more expensive insurance,” Jackson said. . “However, housing market consumers are increasingly facing headwinds from rising mortgage interest rates and housing costs, which have tempered the rate of purchases and refis, and as a result, insurance purchases.
There are signs that the market will rebound, according to the report. According to a Consumer Pulse survey conducted in the second quarter, 32% of consumers said they would apply for a mortgage in the next year, an increase of 4% from the first quarter. Millennials — those between the ages of 25 and 40 — led all generations at 40%. This lines up with data that found homeowners were buying by generation, with Gen X and Millennials seeing the biggest year-over-year increase in purchases (between 11% and 14%).
“Millennials, as a generation, are the primary drivers of many real estate transactions today,” McElroy said.
Looking ahead, McElroy said with the level of loss costs to the insurance industry and supply chain disruptions muted, the market should begin to blossom.
Doug Bailey is a freelance journalist and writer who lives outside of Boston. He can be reached at [email protected].
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