Compared to pre-pandemic figures, industry trends are showing a return to that baseline.
As the United States arrives at its first anniversary of the arrival of the COVID-19 pandemic, trends among auto insurance companies are starting to show a return to the baseline established before the crisis began.
This, says a recent JD Power report, will only intensify the current war for customer acquisition.
The stay-at-home orders from last year substantially reduced the number of drivers on the road. Many people worked remotely for the first time, while others were furloughed or laid off. As millions of people across the country prepared for a time of financial uncertainty, it became commonplace to shop for cheaper car insurance in order to save money.
According to JD Power’s recently released Loyalty Indicator and Shopping Trends (LIST), the early months of the pandemic brought an increase of 20 percent in car insurance shopping. However, in the months that followed, the rapid trend toward expense cutting in this category ahs eased off, said the report, and figures are starting to more closely resemble those of pre-pandemic America.
The shopping trends have widely moved south, creating challenges for auto insurance companies left behind.
Consumers have been migrating southward in the country and brought their car insurance shopping with them. As a result, Northeast and Midwest regional based carriers have been struggling.
According to the JD Power report, there are likely quite a few factors to explain the reduced shopping trend when compared to the first stretch of the pandemic. Among them are an improvement in the financial outlook among Americans. Other factors include the rollout of the vaccine and other occurrences that have people anticipating a lifestyle closer to “normal”.
That said, this is also proving to be quite promising for auto insurance companies, which have historically experienced relatively high rates of retention. The report predicts that as shopping patterns level off across the US, the war among insurers to acquire new customers will only increase at the state level. This is expected to be particularly true in South and Southwest regions, which are becoming central battlegrounds for car insurers.