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Auto, homeowners insurance purchases subdued in Q2, according to Transunion

A recent TransUnion report found auto and homeowners insurance buying activity lackluster in the second quarter of this year due to declining auto and home sales. (iStock)

Recent data show that consumers bought less homeowner and auto insurance in the second quarter of 2022 as home and car sales declined. transunion report.

According to the report, homeowners’ insurance purchases increased by only 4% in the second quarter compared to the same period last year. The increase was largely due to activity in southern states, where shopping increased by 12% compared to last year.

Auto insurance also declined 3% in the second quarter compared to the same period last year. Auto insurance purchases declined the most in the high-risk consumer category, which Transunion defined as shoppers with his credit score between 300 and 500.

“One of the unusual storylines for 2022 is the surge in insurance purchases among the riskiest groups at the start of the year. ,” said the TransUnion report. Said. “Some of this early shopping activity may have been driven by a wave of tax refunds.”

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Auto insurance purchases fall as purchases fall

New and used car sales fell 3.7% and 17%, respectively, in May, according to Transunion. The used-car market is now on pace to end the year with sales down more than 12% from his 40.6 million recorded in 2021, according to Cox Automotive.

Lower sales volumes were the main reason for the slowdown in auto insurance buying activity in the second quarter, according to TransUnion. With fewer car purchases, consumers have less reason to buy new insurance.

The majority of auto insurance buying activity in the second quarter was instead driven by people seeking cheaper rates, according to the report. It is expected that Shoppers are dealing with rising insurance rates and rising car prices that affect sales volumes.

“Even if industry-wide premium increases drive premiums higher and consumers buy auto insurance, they won’t be able to overcome the constrained shopping rate caused by consumers not buying new cars. There will be a shopping event,” said Michelle Jackson Sr., Director of Personal Property and Casualty Insurance for TransUnion’s insurance business.

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Potential recovery in homeowners’ insurance purchases, report says

On the homeowner insurance side, rising mortgage rates alienated homebuyers and limited opportunities to refinance their mortgages, reducing the reason to buy insurance.

Lenders issued $807.8 billion worth of mortgages in the second quarter of 2022, with 2.39 million mortgages originated overall, according to a recent ATTOM report. This number is down 40% from Q2 2021.

Homeowners’ insurance purchases in the second quarter were largely driven by immigration activity to southern states, according to a TransUnion report.

“We continue to see interest in relocating to sunnier environments. As a result, homeowners buying more insurance in states such as Florida and Texas. It’s a state prone to weather events and expensive to insure,” Jackson said. “However, consumers in the housing market are increasingly facing headwinds from rising mortgage interest rates and housing costs, which have reduced the rate of purchases and refinancings, and consequently restrained insurance purchases. It has been.”

However, there is some evidence that homebuyers are returning to the market and there is increasing opportunity for insurance buying activity.Recent TransUnion Consumer Pulse Survey said 32% of consumers said they plan to apply for a mortgage within the next year, up 4% from last year. Among respondents, millennials lead all generations with her 40%.

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