Survey: Rising auto insurance premiums push more consumers to telematics-driven policies

The percentage of consumers opting for telematics-driven auto insurance has risen by a third in the past four months, as drivers look for ways to avoid rate increases and the effects of inflation, according to a TransUnion survey. posted today.

The survey of 2,791 consumers conducted between February and March found that 40% had been offered a policy online, up from 32% in the most recent survey in November, and that the percentage of those who had opted had risen from 49% to 65% %

TransUnion attributed the increase in underwriting to consumers seeking lower premiums in response to rising insurance rates, which have risen 4.3% on average, as well as higher prices overall.

Telematics, which monitors driving behavior in real time, promises consumers lower premiums in exchange for demonstrated safe driving. The use of telematics by operators has not been without controversy; for example, an investigation by Consumer Reports found that telematics programs often have “confusing and opaque” rules and collect more data than necessary.

“It’s clear that high levels of inflation are taking a toll on consumers’ wallets, and many people are now considering new technologies that can help them save money,” Michelle Jackson, senior director of the personal property insurance business and TransUnion accidents.

“Clearly, consumers are outgrowing concerns about surveillance and carriers will want to plan accordingly,” the survey says.

The survey found that cumulative auto insurance rates increased nearly 20% for some drivers in Arizona, with rates also rising sharply in Texas and Georgia. Consumers are responding to rate increases by purchasing a new policy, TransUnion said.

The survey found that the percentage of consumers buying a new auto insurance policy has rebounded since 2021, when supply chain shortages reduced the number of new vehicles on the market. He attributed the uptick to two factors: a desire to seek lower premiums and income tax rebates that allowed more consumers to buy a new car.

Still, the market “is not experiencing a full-fledged recovery. In general, car inventory remains severely thin in the new and used car markets due to supply chain issues, depressing vehicle sales that typically provide the main incentive to purchase insurance. poll.

“It looks like the auto and property insurance industries found some footing this quarter, after a tumultuous 2021,” Jackson said. “Inflation is projected to continue through 2022, which will likely have the dual effect of driving consumers out of price for new homes and vehicles, while also encouraging them to seek more affordable coverage.”

Although more consumers buy auto, home and rental insurance, only 21% switch auto insurers, compared to 61% and 64% for home and rental insurance, TransUnion found.

The survey also highlights the shortcomings of online and app-based policy sales, with 76% of consumers working with an agent before purchasing a policy, according to Comperemedia’s 2022 Insurance Omnichannel Trends report.

“Consumers want both the convenience of online shopping and the human touch, which means operators need to continue to deliver simple yet seamless omnichannel experiences,” the survey says.

That desire for human contact echoes other surveys of consumer attitudes toward filing and handling claims online. More recently, Solera’s annual global survey of attitudes towards the use of artificial intelligence (AI) found that almost half of surveyed consumers would prefer a completely digitized process to resolve their collision claims, while another 43% want a model hybrid that combines digital tools with human contact.

TransUnion’s quarterly insurance purchasing report is based entirely on TransUnion’s internal research. Reported insurance buying trends are based on the TransUnion report, which is derived from TransUnion’s extensive database of credit data. Includes information on insurance purchase transactions from September 2020 to March 2022.

The report focuses on the credit population, highlighting data from TransUnion. It also explores a subset of the total population of insurance purchases. The report excludes data from insurance customers in California, Hawaii, and Massachusetts, where credit-based insurance score information is not used for insurance underwriting or scoring.

More information

Consumer Reports Raises Red Flags About Insurers’ Telematics Programs


Featured image provided by Just_Super/iStock

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