State of Insurance Rating COVID-19 Weather Report #5

April 27, 2020 Laird Rixford

State of Insurance Rating COVID-19 Weather Report #5

ITC will continue to provide these ongoing weekly weather reports throughout this situation. These reports provide agencies and carriers a general baseline of their operations.

During each of the weather report periods prior to last week’s, the nation was in lockdown. Continued measures were being made to constrict normal commerce. Shelter in place directives were being made months in advance. And, it was being reflected in the agency quoting and rating numbers.

From March 16 through April 10, ITC saw an overall decrease of 31.8% in expected rating volumes.

Last week with the introduction of stimulus checks, there was an increase in quoting volumes. Quoting activities ended 22.9% lower than normal expectations, a 27% improvement.

Can it continue?

 

Week of 4/20

With such a drastic one-week improvement, the numbers for this week were highly anticipated. While they did not maintain last week’s level, they continued to show a significant improvement from the previous baseline.

Throughout the week, a new baseline of 25.1% below ITC’s expected quote volumes emerged.

Quote Performance Week of 4_20

Online

According to J.D. Power, while 57% of consumers stated premium relief will provide enough relief to ease insurance-related financial pressure, they are shopping.

These same consumers have indicated a two times propensity to shop their insurance policy with a 30% increase in shopping rates. As these consumers shop for insurance under lockdown, they are using online methods.

This is similar to what we have seen in our online quoting platforms. Online quote requests were 22.4% above expectations for the week.

Online is a viable method for capturing these shopping consumers. So, agencies should continue using online methods to engage with their clients.

Online Quoting Week of 4 20

Financial Hardship & Consumer Confidence

Consumer confidence is directly tied to the perceived financial impact of the pandemic. According to TransUnion’s COVID-19 Financial Hardship Study, 58% of consumers have indicated that their household income has been affected.

The correlation between consumer’s financial outlook tracks with the quoting volume decrease. ITC will continue to review the perceived financial hardship consumers are feeling and how this tracks against quoting volumes in the insurance industry.

COVID-19 Impact chart

 

The Forecast

ITC predicts that quoting volumes will continue to remain below the expected quote activity settling between 24% and 27% for the week.

Fifty-eight percent of consumers continue to feel the pain of financial hardships. Their trusted insurance advisor needs to step up and reach out to their clients.

Agents need to get creative. They need to find ways to alleviate the financial concerns their clients might be having. This can include rewriting renewal business and offering insurance reviews.

 

Next Report

Stay tuned as next week’s report will include the following:

  • A recap of this week.
  • Comment below on any other data metrics you want to see in this report series.

 

Methodology

ITC maintains a regular baseline of expected quoting volume for TurboRater. We also maintain an expectation of submission and traffic upon the Insurance Website Builder, TurboRater for Websites and TurboRater Rate Engine API platforms. 

We built the baseline on a model that reflects multi-year historical performance, usage of the platform, state demographics, and market conditions using data from ITC’s business intelligence and analytical products.

The margin of error for the agency quoting and rating baseline averages less than 1.5% as calculated daily. The data analysis excludes rates returned without a premium.

The margin of error for the online properties and submission volumes averages less than 5% as calculated weekly.

All models only attempt to predict Monday through Friday. Agency operations over a weekend have too much variability.

 

About the Author

Laird Rixford

As CEO, Laird Rixford is responsible for providing strategic direction and leadership for the company. Rixford has a proven executive management track record and has more than 20 years of experience in entrepreneurship and insurance technology. An expert in insurance technology and marketing, Laird is a recognized public speaker and has presented at industry events across the United States.

Follow on Twitter Follow on Linkedin More Content by Laird Rixford
Previous Article
3 Tips to Update Your Website During COVID-19
3 Tips to Update Your Website During COVID-19

Three quick tips to help you keep your website updated while your office may be closed.

Next Article
State of Insurance Rating COVID-19 Weather Report #4
State of Insurance Rating COVID-19 Weather Report #4

The following weather report is the week of April 13 through April 17.