The two-day Summit included more than 150 insurance executives from across the country. Key trends discussed during the meeting included best approaches to support policyholders during the K-shaped economic recovery, how migration patterns could affect insurers and the effects of backlogged court cases to the industry.

TransUnion examined several trends during the Summit, three of which are highlighted below:

Trend #1: Helping Policyholders Climb out of the K-shaped Economic Recovery

In response to the financial hurt brought on by the pandemic, the U.S. government provided trillions of dollars in assistance. Among the assistance offered were accommodation programs allowing borrowers to delay payments on certain loans.

The number of accounts in accommodation peaked in the summer of 2020, and TransUnion research shows that there continues to be more accounts exiting accommodation than those entering. However, those who remain in accommodation are likely struggling, compared to those who entered in the early days of the pandemic. This group also likely needs the most assistance with their insurance payments.

A TransUnion survey of more than 2,000 U.S. consumers conducted in March 2021 and presented at the Summit elaborated on the challenges faced by some insurance policyholders. The survey found that 70% of respondents said it was important to have auto insurance. Yet, 34% stated that they went from being fully insured to under or uninsured during the pandemic. One in five (18%) respondents said they missed one or more payments; 27% said they canceled a policy.

Trend #2: Migration Patterns Influencing Insurance Needs

Despite COVID-19, the housing market has experienced large growth over the last 12 months. Existing home sales are up from 5.7 million in February 2020 to 6.2 million in February 2021. As a result, there has been a 16% increase in average home prices between February 2020 ($270k) and February 2021 ($313k).

As the housing market remains active, TransUnion research found that many consumers are fleeing cities for less dense areas. For most major cities, the pandemic simply accelerated an already downward trend wherein large metro areas are becoming increasingly less popular.

The implications to insurers are plentiful. Most noteworthy, there will be changing mobility and risk distribution by territory, as more people populate these new areas. The migration patterns will also have an impact on vehicle demand and driving. Adjusting insurance policies for these individuals will be critical.

Trend #3: Backlogged Court Cases and the Impact to Insurers

Another consequence of COVID-19 and shutdown orders were operational delays in the judicial system. Courts are experiencing backlogs, which are affecting the recency of violations returned and conviction rates.

The average time to adjudicate increased by 16 days in 2020 over the prior year. Although certain court proceedings have resumed, many traffic-related cases remain backlogged. This action will likely have a lasting impact on the auto insurance industry in regards to premiums and pricing.

For instance, the impact of COVID-19 has reduced personal auto conviction surcharge revenue by an estimated 9% and contributes to negative premium drift; however, carriers can mitigate some of that impact by using court records. A TransUnion analysis found that there could be a 35% increase to surcharge revenue through the deployment of court records.

About TransUnion (NYSE:TRU)

TransUnion is a global information and insights company that makes trust possible in the modern economy. We do this by providing a comprehensive picture of each person so they can be reliably and safely represented in the marketplace. As a result, businesses and consumers can transact with confidence and achieve great things. We call this Information for Good.®

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