LexisNexis: Auto insurance shopping growth positive in Q2

U.S. consumer auto insurance shopping growth remained positive in Q2 2025, according to the latest U.S. Insurance Demand Meter from LexisNexis Risk Solutions.

The meter serves as a quarterly analysis of shopping volume and frequency, new business volume, and related data points. Shopping rates registered as “hot,” rising 9.4% year-over-year (YoY). New policies grew 3.6% YoY, reaching a “warm” reading on the meter.

By the end of Q2, 46.5% of policies-in-force had been shopped at least once in the past year — the highest rate seen since publication of the first Insurance Demand Meter in 2020.

“Policyholders, often those with the highest lifetime value, will help determine the growth and profitability outcomes for the industry,” said Jeff Batiste, LexisNexis U.S. auto and home insurance senior vice president and general manager, in a press release. “While these dynamics unfold against a backdrop of rate decreases, carriers shouldn’t take their eyes off retention. For example, to stay competitive, insurers may need to further tailor their retention and engagement strategies to capture and retain increasingly active, smaller households or individuals with fewer vehicles.”

During the quarter, nearly 40% of rate filings among the top 25 auto insurers included rate reductions, “helping sustain higher new business activity and prompting consumers to shop and consider switching providers,” LexisNexis said.

The average rate decrease for the quarter was 4%, while the average rate increase was 4.4% for the quarter. LexisNexis says this likely reflects states where rate increases have been more slowly approved compared to others in the U.S. in recent years.

The number of consumers shopping for auto insurance while shopping for a new vehicle has increased by 9% since January 2022. This suggests that consumers are increasingly considering how rising insurance rates will affect their overall purchase cost, according to LexisNexis.

Over the same period, new business tied to vehicle purchases hovered between 6% and 8%, a trend that remained steady in Q2 2025.

The industry also experienced a notable shift in consumer shopping behavior based on the number of vehicles owned. In Q2 2024, policies with lower vehicle counts began exhibiting higher shopping growth, while shopping among households with multiple vehicles decreased.

Similarly, growth in shopping activity for policies with just a single driver reinforced this trend. In Q2 2025, shopping and switching for policies covering an individual driver outpaced growth seen in policies insuring multiple vehicles.

This uptick among individual drivers and smaller households suggests a heightened emphasis on affordability — a trend potentially driven by tightening household budgets or shifting consumer priorities among rate-conscious shoppers, according to LexisNexis.

“The second quarter underscores how the insurance market remains in high gear, driven by the lingering effects of recent hypergrowth in shopping activity,” said Batiste. “While we are still experiencing growth, albeit at a slightly slower pace, marketing activations combined with an increasingly price-sensitive customer base are helping to sustain elevated levels of shopping and new policy acquisition.”

Similar to Q1 2025, LexisNexis says direct channel and the non-standard market spurred Q2 shopping activity.

For the eighth consecutive quarter, direct channel growth was above exclusive and independent agents, netting 22.8% YoY growth in Q2. According to LexisNexis, this was likely the result of more insurers reigniting marketing engines and expanding risk tolerances.

Growth among shoppers with existing policies also outpaced uninsured shopping growth by 2.5%, reaching 10.1% and 7.6%, respectively.

“This trend suggests that insurer outreach, including targeted marketing campaigns and renewal notifications, prompted more existing customers to reassess their insurance needs and seek new quotes,” LexisNexis said.

Trends also varied by geography, with only two states, Hawaii and New Jersey, seeing shopping growth of at least 20% in Q2, compared to the 10 states that achieved this same level in Q1.

New Jersey (33%), Texas (17%), California (16%), and Florida (9%) emerged as the states generating the highest shopping volumes, which LexisNexis says reflects each state’s significant consumer base and potential outsized impact on market activity.

“During the first half of the year, consumers acted quickly to get ahead of potential personal economic changes and tariffs, leading to increased vehicle purchases and, consequently, a rise in auto insurance shopping,” the release says. “Should new trade deals take effect, they may counteract expected rate decreases and emerging signs of market stabilization, potentially ushering in renewed movement and reshaping expectations for the remainder of the year.”

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Featured image credit: Khanchit Khirisutchalual/iStock

Graph provided by LexisNexis