Through many different interviews, articles, and comments, we’ve shared our viewpoints on 2021’s biggest trends. You've asked for our definitive view of 2021’s automotive and home insurance shopping, so here’s our year in review, and the outlook for 2022.
Jornaya captures a unique view of consumer behavior—acting as third-party witness to consumers as they visit and fill out lead forms across more than 55,000 comparison shopping and lead generation websites. This type of consumer behavioral data can prove a strong indicator of buyer intent and a glimpse into shopping trends across the insurance, mortgage, banking and higher education sectors.
Our market leader for insurance, Jeff Piotrowski, has examined Jornaya’s proprietary view of consumer behavior, and reflected on some comparisons against other industry trends and data to identify evolving patterns.
Current Market Outlook
P&C Insurance is a volatile space with large swings in shopping behavior. Combined with the COVID-19 pandemic, this sector has seen more digital transformation and even more consumers shopping online for a plan and rates that work for their unique circumstances. As Jeff noted in an article published by Insurance Thought Leadership, there is an opportunity to leverage the sector-specific challenges presented by COVID-19 to better serve online comparison shoppers and insurance customers. This is a view uniquely seen across Jornaya’s network of publisher partners and the trends across their portfolio of comparison shopping and lead generation websites.
The end of 2021 brought a decline to auto insurance comparison shopping. The chart below illustrates Jornaya’s auto insurance comparison shopping index against metrics sourced from the Federal Reserve Economic Data (FRED). Compared to our unique insights, declining auto inventories and miles driven remaining flat throughout the year only reinforce the fact that shoppers are putting a pause to their auto insurance search. Despite a tough end to Q4 2021, this sector still saw year-over-year growth from 2020 to 2021.
A higher demand was put on the insurance carrier side while demand was lower from consumers or comparison shoppers. Despite low consumer demand, claims frequency remains at a high. More vehicle owners were back on the road after a long period of working from home, and it seemed as if they’d forgotten how to drive. With this return, the severity of motor accidents was higher, and the industry adapted by selling claims at a higher rate – and as more accidents drive higher premiums, it creates more comparison shopping as consumers look for better rates and coverage.
Other factors such as difficulty staffing Call Centers and other carrier resources, and declining auto sales inventories also impacted comparison shopping for auto insurance, which in turn also impacts homeowners' insurance shopping.
There are opportunities to get ahead of insurance comparison shopping by leveraging each unique customer journey. Jornaya’s solutions offer data that can be used to create a more personalized experience with potential insurance buyers.
The Outlook for Auto Insurance in 2022:
Work commutes will not necessarily make a meaningful impact on the number of miles driven, but other aspects of the vehicle owner's experience may contribute to higher numbers.
Insurance comparison shopping volumes will sustain – the question is whether consumers will switch insurance providers. If so, how frequently? Where there is risk, there is opportunity for those well positioned to capitalize.
Personalization and digitization will continue to accelerate. This year, we’re watching to see if customer loyalty is a trivial pursuit, or if it could be a long-term differentiator for insurance carriers.
In general, home insurance comparison shopping activity has retreated. February 2021 marked peak activity for comparison shopping within the home insurance sector and was followed by a steep decline in activity throughout the remainder of 2021. This slowing of activity can be attributed to housing affordability, climbing interest rates, and little housing inventory on the market.
While new construction made and continues to make progress, overall market inventory remained low. It can also be noted that auto insurance is typically a bundled sale for many insurance shoppers and can be included in the list of factors contributing to a slowdown in shopping.
Illustrated above is the Federal Reserve of St. Louis’s housing affordability index compared to Jornaya’s Home Insurance Shopping Index over the course of 2021. Given Jornaya’s unique viewpoint, we were able to see that, up until August of 2021, the two sources track closely with one another, with movement in home insurance shopping occurring one month after movements in the affordability index. In August, home insurance shopping continues to fall despite the affordability index maintaining the same rate – it's possible a ceiling was hit where consumers were priced out of the market, regardless of whether affordability stayed the same or increased.
The Outlook for Home Insurance in 2022:
After January, home insurance comparison shopping will remain low in the first half of 2022 due to several factors that are not likely to improve quickly.
To help bridge the gap, a competitive renters insurance offering will jumpstart comparison shopping activity in the latter half of 2022.
As first-time homebuyers return to the market, potentially as early as late summer, an influx of new shoppers will enter the market.
Work-from-home will continue to impact moving, which will impact home insurance comparison shopping.
Catastrophic weather events will impact claims and pricing, which will also contribute to higher rates of comparison shopping.