In part two of our three-part series on comparing 2020 to 2019 U.S. auto insurance shopping volume growth, we’re focusing on the three distribution channels: Direct, Exclusive Agent and Independent Agent.
In our first blog, I explained the differences between “raw” and “like” growth and showed a comparison based on those two views. In this look at auto shopping by channel, we’re using like growth data to help eliminate the peaks and troughs that are generally driven by holidays and the number of weekdays in a month, as well as help measure the impact of events such as the stimulus check issuance in the spring of 2020.
2020: The differences in channel challenges
The beginning of 2020 saw strong shopping volume growth in both the Direct and Independent Agent channels. However, the Exclusive channel began the year with negative volume shopping growth. That trend continued (although with a less drastic decline than other channels) until it hit bottom in March. From that point through the end of the year the Exclusive channel improved each month, ending with 16% year over year growth for December, 22% percentage points higher than the March low point.
Growth in the Independent Agent channel was quite different from growth in the Exclusive channel. In this channel, the impact of COVID-19 prompted a bit of a roller coaster. While the decline during the shutdown was not quite as steep as in the Direct channel, it followed a similar flatline in negative growth throughout March and April. The Independent Agent channel realized an over 13% percentage point increase from its low point in April to its peak in July. While that peak was followed by an overall decline through November, the numbers never again entered negative shopping volume growth (as compared to 2019) for the remainder of the year.
The Direct channel experienced the biggest impact in shopping growth. While starting out the year almost 12% higher than in 2019, it saw a 17% percentage point decline from January through its lowest point in April. From there, the Direct channel struggled to maintain positive growth as compared to 2019. The Direct channel did see a 5% percentage point increase from November through the end of December, its largest gain since May.
A deeper look at this data can lead to insights about the intersections between channel types and shopping behavior and raises questions about these channels. Did COVID push consumers to the Exclusive Agent channel or were Exclusive Agents aggressively pursuing new customers? What was the reason the Independent Agent channel saw peaks and valleys? Why did the Direct channel struggle when one would assume it would be a prime channel for being socially distanced? We’re continuing to focus on channels to help answer these questions in what is already looking to be a year of more change. For a comprehensive look at U.S auto insurance insights be sure to read our quarterly Insurance Demand Meter.
Other articles in this series: