LexisNexis reports Q3 shopping growth ‘hot’ in Q3
Shopping for auto insurance remained high through Q3, with the quarterly year-over-year (YoY) shopping growth rate registering as “hot” at 6.4%, according to the latest U.S. Insurance Demand Meter from LexisNexis Risk Solutions.
The shopping rate was down from 9.4% in Q2. New policy growth came in “warm” at 2.8%, down from 3.6% in Q2.
Policyholders aged 66 and older exhibited the highest growth rate, outpacing younger cohorts with a 10% increase YoY in shopping growth.
“The accelerating shopping activity among consumers aged 66 and older is a signal insurers can’t afford to overlook,” wrote Jeff Batiste, LexisNexis U.S. auto and home insurance senior vice president and general manager, in the report. “Policyholders who once remained loyal and inactive are increasingly entering the market. With annual shopping rates rising in recent quarters, carriers should ensure their segmentation strategies are precisely aligned with underwriting appetite.“
Direct channel shopping was up 14.1%, while exclusive and independent agency channels experienced declines compared to Q2. Exclusive channel shopping dropped to -0.8%, and independent to 2.8%.
“Each of these dynamics helped influence a rising annual shop rate, one that either tied with or topped the annual shop rate from the previous quarter,” a LexisNexis press release states. “In Q3, like in Q2, 46.5% of policies-in-force were shopped at least once in the past 12 months.
“This quarter of the U.S. Insurance Demand Meter highlights a notable shift in consumer behavior. The report examines shoppers who have not shopped for auto insurance for 12 months but recently engaged in auto insurance shopping. Their shopping offered key insights into indicators of future shopping activity. These findings provide a valuable lens to evolving demand patterns and what they mean for insurers navigating a dynamic marketplace.”
In Q3, shopping growth rates increased in 15 states and the District of Columbia, whereas in Q2, only Wyoming posted quarter-over-quarter growth.
New Jersey (16%), California (11%), and Texas (10%) experienced double-digit increases in Q3, which LexisNexis says helped boost overall shopping growth.
In Q3, nearly one-third of rate revisions that went into effect for the top 25 carriers were decreases, with the weighted average rate decrease coming in at -4.2%, the report states. By contrast, 35% were increases (+5.1% average) and 31% were rate neutral, resulting in a -0.2% overall rate impact among the top 25 carriers.
“The third quarter reflects an evolving environment where traditional assumptions about loyalty and timing no longer hold,” said Batiste in the release.
“The persistent shopping activity of long-tenured customers and the ongoing strength of the direct channel reveal that the fundamentals of engagement have changed. Insurers now have a crucial opportunity to pair acquisition momentum with smarter retention strategies to help keep their most valuable long-term customers connected.”
LexisNexis notes that in Q3, insurers increased targeted marketing and capitalized on the expiration of the EV tax credit, while “racing to beat impending tariffs that helped draw price-sensitive consumers into the market.”
“Heading into the end of 2025, the auto insurance industry may experience a lull in shopping due to the holiday season, a trend that didn’t hold true in 2024,” the release states.
Batiste adds in the report that 2025 topped last year’s record-breaking shopping.
“It will be interesting to see how the last three months of 2025 unfold and whether shopping will slow or whether the hot streaks will continue,” he wrote.
The analysis revealed that when the “Once-Sidelined Shoppers” went to market, they were twice as likely to shop again, particularly within the next six months, when compared to the “Waited, not Baited” cohort.
“This may mean that when consumers see how easy shopping policies can be, they’re more likely to hit the market in the future,” the report states.
S&P Global Market Intelligence reported in May that the net combined ratio for the U.S. property and casualty (P&C) industry reached its lowest level in over a decade last year.
The industry’s aggregated P&C lines posted a net combined ratio of 96.5%, marking the best annual performance since 2013, when it was 96.2%, the study found. S&P Global says the figure represents a significant improvement from the previous year’s net combined ratio of 101.6%.
“The drastic improvement can be attributed to better underwriting results in personal lines of business, which include private auto, homeowners, and farmowners insurance,” the study states. “The net combined ratio for personal business lines was 96.7% in 2024, reflecting a year-over-year improvement of approximately 10 percentage points.”
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