INSURANCE AGENTS LINE UP FOR JOB FAIR INTERVIEWS
“Direct distribution channels continued to pull ahead of agent-driven sales. Shopping through direct carriers jumped nearly 23% year over year, boosted by aggressive marketing and a loosening of risk appetite. “
American drivers ready to change auto insurance providers – report
Shopping activity was up 9.4%
By Josh Recamara – Aug 20, 2025Share
American drivers continued to shop aggressively for auto insurance in the second quarter of 2025, as rate cuts and new vehicle sales kept the market active, according to new figures from LexisNexis Risk Solutions.
The firm’s US Insurance Demand Meter showed shopping activity up 9.4% compared with last year, while new policy sales grew 3.6%. Nearly half, or 46.5%, of all auto policies were shopped at least once over the past 12 months, the highest level since the Demand Meter was launched in 2020.
Price sensitivity on the rise
The data suggests that affordability remains a central concern for policyholders. Almost 40% of filings from the top 25 auto insurers in Q2 were for rate decreases, averaging a 4% drop. By contrast, average rate hikes were 4.4%, concentrated in states that have been slower to approve increases in recent years.
These shifts are fuelling competitive pressures. Consumers are not only shopping but also switching more frequently, particularly among single-driver households and smaller vehicle-owning families.
Direct channels driving competition
Direct distribution channels continued to pull ahead of agent-driven sales. Shopping through direct carriers jumped nearly 23% year over year, boosted by aggressive marketing and a loosening of risk appetite. The non-standard market also added to growth.
Insurers’ retention efforts are being tested. Shopping by existing policyholders rose 10.1% in Q2, outpacing shopping among the uninsured at 7.6%. Renewal reminders and targeted marketing appear to be prompting many customers to look for alternatives before renewing.
Vehicle sales and policy switching
New vehicle purchases remain a key driver. Since 2022, the number of consumers comparing insurance while shopping for cars has risen 9%. But the share of new business directly tied to car sales has held steady, ranging between 6% and 8%.
The bigger shift lies in consumer behaviour. Policies covering single drivers have seen the sharpest increases in shopping and switching, outstripping multi-car households. Analysts suggest this reflects households under pressure to cut costs and more willing to switch carriers for a better rate.
The surge in shopping activity raises the stakes for carriers, particularly as almost half the market is now in play. High-value customers are among those most likely to shop, creating added pressure on insurers’ retention strategies.
After two years of widespread rate hikes, insurers are now entering a period of pricing recalibration. The move toward rate decreases is helping to sustain business volumes, but it also threatens to squeeze margins if claims costs remain high. Any changes in trade policy or economic conditions later this year could add another layer of volatility to both pricing and consumer behavior
