Comparisons can be very illuminating when it comes to better understanding your market. Now that we’re into the new year, we’re taking a look back at 2020 U.S. auto insurance shopping volume growth and comparing it to what we saw in 2019 to see if there are any insights to be gleaned that could help you prepare for the future.
We look at auto insurance shopping volume growth two ways: “raw” growth and “like” growth. “Raw” growth compares data at a specific point in time, typically a month in one year compared to the same month in another year. “Raw” growth helps us understand the actual volume of shopping growth regardless of the number of days included in the month.
“Like” growth compares data from a like number of days within a week. On average, shopping volumes are highest on Mondays and Tuesdays. Saturdays are 62% lower than Mondays and Tuesdays and Sundays are 78% lower. Because of this, if a given month has more Mondays this year than it did last year, the raw growth will look high simply because of this shift in days of the week. “Like” growth normalizes for the number weekdays in a given time period by lining up each day of the week this year with the closest same day of the week from last year. “Like” growth will line up every Monday with the closest Monday from last year and so on for every day of the week.
We also looked at comparative shopping growth rates between insured and uninsured to see which, if any, is driving growth.
When the data surprises you
In terms of like growth, shopping volume in December 2020 was 11.1% greater than in December 2019 ― which was a bit surprising considering what an unusual year 2020 was and how the COVID-19 pandemic impacted the auto insurance industry. For even deeper insight be sure to download our latest edition of the Insurance Demand Meter
As the COVID-19 crisis began to manifest itself in early March, we saw a decline in shopping growth. When shelter-in-place orders began in late March, many workers transitioned to remote working and schools closed in favor of virtual learning. For the first time since 2009, we saw negative growth, on a “like” basis in auto insurance shopping. March 2020 was only -1.5% behind March 2019 in “like” growth volume, which speaks to how strong the shopping actually was, before COVID-19. While we’ve seen slowdowns in shopping growth over the years, this was unprecedented. As many people suspended their commutes to work, ramped up their online shopping and essentially stayed home except for necessary trips out, it appeared that shopping for auto insurance was very low on their priority list.
However, that slowdown was short-lived. By late spring, shopping volume growth had bounced back. We specifically saw significant increases in shopping volumes in the later months of 2020, as compared to 2019.
Insured versus uninsured: Which really drives “Like” volume growth?
Insured shopping growth in 2020 initially slowed, but continuously outpaced 2019 ― even during the downturn. We saw a spike in uninsured shopping growth volume when stimulus checks were issued and cancellation moratoria and refunds ended at mid-year, but soon after that we saw a downturn in growth, which continued until the end of the year. Insured shoppers clearly drove the increase in shopping volume growth – volumes from August through the end of the year remained at least 10% above 2019 with a sharp increase occurring during the last month of 2020.
How finely do you ‘split’ your business? Have you considered the impact of losing a Monday and picking up a Sunday in any given month? What about the impact of your business mix on your year-over-year results? If you had ‘okay’ results in 2020, was it because your positive growth from insured quoting was almost completely offset by your negative growth in uninsured quoting? In our upcoming installments, we’ll be looking at more cuts; of this data to give you additional insights for your year-over-year comparisons.
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