For the second consecutive quarter, the LexisNexis U.S. Insurance Demand Meter recorded “nuclear” levels of auto insurance shopping and new policy volumes.

New policy volumes also set a new record for growth since LexisNexis first began tracking U.S. insurance consumer shopping behavior more than a decade ago.

Marketing by insurance companies caused consumers looking for better rates to “respond in droves.” By the end of the quarter, 45% of U.S. policies-in-force had been shopped at least once in the past 12 months. LexisNexis attributes this to “the continued escalation of activity the market has witnessed over the past two quarters.”

U.S. consumer auto insurance shopping grew by 31.2% year-over-year in Q3 2024, up considerably from Q2’s 16.1% growth, according to LexisNexis.

New auto policy volumes increased by 25.9% year-over-year, an increase from Q2’s 19.5%.

Rate increases drove shopping among the 66-plus demographic and preferred and long-tenured customers, which continued the notable shift in traditionally less active segments hitting the market, LexisNexis said.

Direct channel shopping rates jumped 67% and new policies grew 54% followed by independent agent carriers posting 26% shopping growth.

In August, some states experienced growth streaks for shopping and new policy activations.

In both categories, Florida (38%), Texas (33%), and Michigan (19%) exhibited increased activity by volume while Wyoming (80%), Louisiana (54%), and Montana (47%) displayed elevated growth by percentage.

New York and California ranked in the top five states for shopping and new policy growth and experienced growth-by-volume and growth-by-percentage.

LexisNexis also gauged the impact of Hurricane Helene, which made landfall near the end of Q3.

Despite the initial halt in shopping that Florida (-17%) and Georgia (-16%) experienced, both bounced back more quickly than the Carolinas. North Carolina and South Carolina initially saw smaller shopping losses due to the storm; however, the effects continued to linger through the end of the quarter.

“Throughout Q3, the momentum in policy shopping and new policy volumes reached unprecedented levels as U.S. insurers worked to balance profitability with market demands,” said Jeff Batiste, LexisNexis U.S. auto insurance senior vice president and general manager, in a press release.

“With strategic reactivation of marketing programs, U.S. insurers enticed motivated consumers, eager to offset the market’s rising auto and home policy costs. Resulting record activity levels, coupled with the effects of increased rates, may see the industry officially turning the page on its less profitable chapter and opening its doors for growth.”

Chris Rice, LexisNexis strategic business intelligence vice president, noted that, typically, soft markets spur aggressive marketing and targeted U.S. rate adjustments to enhance segmentation.

“Following an especially challenging four years, U.S. insurers must closely monitor industry trends, including stabilizing claim severities, increased frequency of weather-related events, rate adjustments, and whether the recent shopping by long-tenured customers has motivated these consumers to entertain future shopping events,” he said.

According to J.D. Power’s 2024 U.S. Auto Claims Satisfaction Study that was released in October, 48% of study respondents said their insurance premiums increased during the past year. According to J.D. Power, satisfaction is particularly low among those who incurred increases before their claim, and those customers may have been entering the claim process already upset by rising prices.

“The claims process is the moment of truth for auto insurance customers, so when they experience rate increases and then have a claim with longer-than-expected repair times and other inconveniences, their overall trust in the brand is greatly diminished,” said Mark Garrett, J.D. Power’s director of global insurance intelligence, in a press release.

The No. 1 key performance indicator in the study is to ensure that communicating with insurer representatives is easy, J.D. Power said.

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