Inflation leads to a 33% increase
CHICAGO, May 24, 2022 (GLOBE NEWSWIRE) — As the costs of many goods and services have increased dramatically over the past year, consumers are looking for other ways to reduce their spending. Latest news from TransUnion (:TRU) Personal Lines Insurance Purchase Report found that the number of consumers who have accepted a telematics offer from their car insurer has increased by 33% since the end of 2021, a trend driven by consumers who hope to reduce their premiums by adopting safe driving habits.
Telematics programs use connected devices, cell phones, or automaker car apps to monitor and report detailed driving behavior. Likewise, in homes, connected devices monitor warnings of fires, water leaks, and other hazards.
The new data comes from a TransUnion survey of 2,791 consumers conducted between February and March 2022. It found that, compared to the last survey in November 2021, the number of customers offering a telematics policy to monitor their driving and help to determine their tariffs increased from 32% to 40%, and the number of those who registered increased from 49% to 65%.
“It’s clear that high levels of inflation are impacting consumers’ wallets, and many people are now considering new technologies that could help them save money. In the insurance industry, more and more consumers are supportive of the idea of using a telematics tool to improve driving safety while reducing costs,” said Michelle Jackson, senior business manager at property and casualty insurance from TransUnion. “This evolving sentiment could carry over to similar offerings in the real estate space.”
Along with general inflation, cumulative car insurance prices are rising an average of 4%, with some states trending nearly 20% for some drivers, according to the report. In response, consumers are looking for lower premiums, better coverage and better service from their insurer, a trend seen in auto, home and rental insurance.
Percentage of consumers who buy and switch insurance providers in the past six months
type of insurance
|Switching (% of those
The auto and property insurance sectors balance each other out
Throughout 2021, year-over-year home insurance purchase rates have remained extraordinarily high in response to a white-hot housing market. However, during the first quarter of 2022, these rates trended negative on an annual basis, the result of an increase in mortgage interest rates, combined with higher house prices and limited inventory.
In contrast, auto purchase rates have been depressed throughout 2021 due to supply chain shortages. Initially, this market started 2022 below 2021 levels; however, March purchases were closer to the previous year. This rebound was fueled by two factors: an increase in purchases in search of lower premiums and an increase in funds from tax returns that allowed more consumers to buy automobiles.
“It looks like the auto and property insurance sectors have found some balance this quarter, after a tumultuous 2021,” Jackson said. “Inflation is expected to continue through 2022, which will likely have the dual effect of driving down the price of consumers’ new homes and vehicles while motivating them to seek more affordable coverage.”
For more insights on the Personal Insurance Market, the full report can be accessed here.
About TransUnion’s Insurance Purchase Report
The Quarterly Insurance Purchase Report is based entirely on internal TransUnion research. Reported insurance buying trends are based on TransUnion’s report which is derived from TransUnion’s extensive credit database. It includes information on insurance purchase transactions from September 2020 through March 2022. The report focuses on the credit population, highlighting data from TransUnion. It also explores a subset of the total population of insurance buyers. The report excludes data from insurance customers in California, Hawaii and Massachusetts, where credit-based insurance rating information is not used for insurance pricing or underwriting.
About TransUnion (:TRU)
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