The final quarter of 2021 saw the personal auto insurance purchase rate drop to minus 5.9% from minus 3.9% in the third quarter of 2021, according to Insurance Claim Counter LexisNexis Risk Solutions.
The rate of new business written fell to minus 6.9% in the fourth quarter of 2021 compared to the same period the previous year. However, this is an improvement from the third quarter of 2021, which saw further political “growth” of minus 7.3%, a two-year low, according to LexisNexis.
Insurers have reacted to these developments by reducing marketing investments in motor insurance, while focusing on rate increases and a return to profitability.
No car to buy the blues
Few vehicles for sale had a negative impact on insurers’ results, according to LexisNexis. While March and April 2021 saw growth in car purchases, fueled by tax returns and the latest stimulus checks, summer sales had begun to dry up. This was particularly pronounced from July, although the trend continued through the end of the year.
(Credit: LexisNexis Risk Solutions)Additionally, 2021 has also seen a return to more normal driving habits and, alongside this, an increase in claims frequency. However, this frequency has been accompanied by a sharp increase in the severity of claims.
“Over the past couple of years, the auto and auto insurance industries have seen buying ebbs and flows that have sometimes been a complete departure from what we’re used to. see – especially the unusual trends we’ve seen in 2020,” Adam Pichon, vice president and general manager of auto insurance at LexisNexis Risk Solutions, said in a statement. “While the start of 2021 again showed surprising upticks in buying behavior influenced by macroeconomic conditions, we are seeing things start to return to the norm over the last two quarters. As a result, consumers across across the country have seen insurance premiums rise steadily in recent months, with insurers on guard to gauge profitability as more drivers hit the road again.
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