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LexisNexis Insurance Demand Meter Shows Third Consecutive Quarter of Negative Growth in U.S. Auto Insurance Shopping Rates

LexisNexis Insurance Demand Meter Shows Third Consecutive Quarter of Negative Growth in U.S. Auto Insurance Shopping Rates
PR Newswire
ATLANTA, May 25, 2022

Drop in Shopping Signals ‘Cold’ Q1, While Increasing Claims and Related Profitability Chall…

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LexisNexis Insurance Demand Meter Shows Third Consecutive Quarter of Negative Growth in U.S. Auto Insurance Shopping Rates

PR Newswire

Drop in Shopping Signals 'Cold' Q1, While Increasing Claims and Related Profitability Challenges Could Heat Up the Insurance Market

ATLANTA, May 25, 2022 /PRNewswire/ -- The latest edition of the LexisNexis® Risk Solutions Insurance Demand Meter reports the overall annual U.S. auto insurance shopping growth rate, which includes shopping and new policies, dropped for the third consecutive quarter for the first time since LexisNexis Risk Solutions began releasing these quarterly metrics. Shopping was down 4.8% in Q1 2022 versus Q1 2021 – compared to -5.2% in Q4 2021 versus Q4 2020 – as the industry continues to grapple with increased claims costs and a 16% decline in new car sales from a year ago.

New policy growth declined 11% for the quarter versus Q1 2021 as insurers scaled back marketing spend, and consumers were forced to account for early dispersal of half of the child tax credit. However, some of that decline year over year can likely be attributed to the fact that Q1 2021 saw higher than normal seasonal shopping, which was boosted by the final round of stimulus checks from the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

"The auto insurance and automotive OEM industries are still facing significant headwinds related to decreased marketing spend by carriers, variables in tax refunds for consumers, and new and used vehicle shortages, but I don't think it's time to sound the alarm just yet," said Adam Pichon, vice president and general manager, auto insurance, LexisNexis Risk Solutions. "The market is still reacting to pandemic-related and macroeconomic factors such as chip shortages, inflation, and labor shortages, and carriers are responding to claims inflation challenges by raising rates. Rate taking among carriers is expected to continue through 2023, which will likely drive consumers back into the insurance shopping market."

With Claims Severity Up, Carriers' Marketing Spend is Down

As reported in last quarter's edition of the Insurance Demand Meter as well as the newly released 2022 Auto Insurance Trends Report, suppressed new vehicle sales persisted into Q1 2022 and were down 16% from the year prior. This lack of automotive inventory has also created a ripple effect in driving up used vehicle prices. As a result of more vehicles on the road and the aging car park, insurance claim severities have been on the rise, particularly for total losses.

With an eye on profitability, many insurers have drastically cut their marketing spendi. This is having a significant impact, especially in the direct channel where corporate marketing is critical to creating new insurance shoppers. LexisNexis Risk Solutions analysis suggests shopping volumes are down 3% or more due to reduced spend on direct mail marketing alone.

Uncertainty Swirls Due to Variances in Tax Return Shopping

New shopping volumes for uninsured drivers who qualify for the Earned Tax Creditii (EITC) and the Additional Child Tax Creditiii were down in Q1 2022, as they were a year ago during the same period. This marks a two-year divergence from the typical pre-pandemic pattern we typically see in our data during tax season.

While the early disbursement of the Additional Child Tax Credit in late 2021 did not appear to have a significant impact on the depressed shopping volumes among the uninsured segment, it did impact the overall shopping volumes across all demographics.

Insurers Respond – and a Look Ahead

As expected, rate filings were a priority among carriers in Q1 2022, and that should continue for at least the next 18 months.

"Upticks in claim frequency and severity have forced the hand of insurers to revisit rate adequacy," said Pichon. "We will continue to keep a close eye on the auto insurance market's rate activity and gauge whether it becomes a key catalyst for increased U.S. consumer shopping when they see their premiums are higher."

Download the latest Insurance Demand Meter.

About the LexisNexis Insurance Demand Meter
The LexisNexis Insurance Demand Meter is a quarterly analysis of shopping volume and frequency, new business volume and related data points. LexisNexis Risk Solutions offers this unique market-wide perspective of consumer shopping and switching behavior based on its analysis of billions of consumer shopping transactions since 2009, representing nearly 90% of the universe of insurance shopping activity.

About LexisNexis Risk Solutions
LexisNexis® Risk Solutions harnesses the power of data and advanced analytics to provide insights that help businesses and governmental entities reduce risk and improve decisions to benefit people around the globe. We provide data and technology solutions for a wide range of industries including insurance, financial services, healthcare and government. Headquartered in metro Atlanta, Georgia, we have offices throughout the world and are part of RELX (LSE: REL/NYSE: RELX), a global provider of information and analytics for professional and business customers. For more information, please visit www.risk.lexisnexis.com, and www.relx.com.

Media Contacts:
Chas Strong
LexisNexis Risk Solutions
Phone: +1.706.714.7083
Charles.Strong@lexisnexisrisk.com 

Donna Armstrong
Brodeur Partners for LexisNexis Risk Solutions
Phone: +1.646.746.5611
mholman@brodeur.com

https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/geico-progressive-break-trend-slash-advertising-expenditures-in-2021-69764365 and Q1 2022 Personal Lines Overview, Competiscan, ©2022.
ii www.eitc.irs.gov/partner-toolkit/basic-marketing-communication-materials/eitc-fast-facts/eitc-fast-facts 
iii www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/earned-income-tax-credit-statistics

 

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SOURCE LexisNexis Risk Solutions

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Economics

Expert on Bath & Body Works: ‘an easy double the next three years’

Bath & Body Works Inc (NYSE: BBWI) might have been painful for the shareholders this year, but the road ahead will likely be a rewarding one, says…

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Bath & Body Works Inc (NYSE: BBWI) might have been painful for the shareholders this year, but the road ahead will likely be a rewarding one, says the Senior Vice President and Portfolio Manager at Westwood Group.

BBWI separated from Victoria’s Secret

The retail chain separated from Victoria’s Secret in 2021, which, as per Lauren Hill, clears the way for a 100% increase in the stock price in the coming years. On CNBC’s “Closing Bell: Overtime”, she said:

[Bath & Body Works] has really strong pricing power. They have 85% of their supply chain in the United States and with the Victoria’s Secret brand now gone, I think it’s a wonderful buy; an easy double the next three years.

Last month, the Columbus-headquartered company reported results for its fiscal first quarter that topped Wall Street expectations.

Bath & Body Works is a reopening play

The stock currently trades at a PE multiple of 6.64. Hill is convinced Bath & Body works is a reopening name and will perform so much better as the world continues to pull out of the pandemic. She noted:

Customers have missed buying their scented products in store and as their social occasion calendars fill up, they are getting back out there and buying more gifts, including Bath & Body Works products.

Hill also dubbed BBWI a great pick amidst the ongoing inflationary pressures because of its reasonably priced products. Shares are down more than 50% versus the start of 2022.

The post Expert on Bath & Body Works: ‘an easy double the next three years’ appeared first on Invezz.

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Economics

Majority Of C-Suite Execs Thinking Of Quitting, 40% Overwhelmed At Work: Deloitte Survey

Majority Of C-Suite Execs Thinking Of Quitting, 40% Overwhelmed At Work: Deloitte Survey

Authored by Naveen Anthrapully via The Epoch Times,

A…

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Majority Of C-Suite Execs Thinking Of Quitting, 40% Overwhelmed At Work: Deloitte Survey

Authored by Naveen Anthrapully via The Epoch Times,

A majority of C-suite executives are considering leaving their jobs, according to a Deloitte survey of 2,100 employees and C-level executives from the United States, Canada, the UK, and Australia.

Almost 70 percent of executives admitted that they are seriously thinking of quitting their jobs for a better opportunity that supports their well-being, according to the survey report published on June 22. Over three-quarters of executives said that the COVID-19 pandemic had negatively affected their well-being.

Roughly one in three employees and C-suite executives admitted to constantly struggling with poor mental health and fatigue. While 41 percent of executives “always” or “often” felt stressed, 40 percent were overwhelmed, 36 percent were exhausted, 30 percent felt lonely, and 26 percent were depressed.

“Most employees (83 percent) and executives (74 percent) say they’re facing obstacles when it comes to achieving their well-being goals—and these are largely tied to their job,” the report says. “In fact, the top two hurdles that people cited were a heavy workload or stressful job (30 percent), and not having enough time because of long work hours (27 percent).”

While 70 percent of C-suite execs admitted to considering quitting, this number was at only 57 percent among other employees. The report speculated that a reason for such a wide gap might be the fact that top-level executives are often in a “stronger financial position,” due to which they can afford to seek new career opportunities.

Interestingly, while only 56 percent of employees think their company executives care about their well-being, a much higher 91 percent of C-suite administrators were of the opinion that their employees believe their leaders took care of them. The report called this a “notable gap.”

Resignation Rates

The Deloitte report comes amid a debate about resignation rates in the U.S. workforce. Over 4.4 million Americans quit their jobs in April, with job openings hitting 11.9 million, according to the U.S. Department of Labor. In the period from January 2021 to February 2022, almost 57 million Americans left their jobs.

Though some are terming it the “Great Resignation,” giving it a negative connotation, the implication is not entirely true since most of those who quit jobs did so for other opportunities. In the same 14 months, almost 89 million people were hired. There are almost two jobs open for every unemployed person in the United States, according to MarketWatch.

In an Economic Letter from the Federal Reserve Bank of San Francisco published in April, economics professor Bart Hobijn points out that high waves of resignations were common during rapid economic recoveries in the postwar period prior to 2000.

“The quits waves in manufacturing in 1948, 1951, 1953, 1966, 1969, and 1973 are of the same order of magnitude as the current wave,” he wrote. “All of these waves coincide with periods when payroll employment grew very fast, both in the manufacturing sector and the total nonfarm sector.”

Tyler Durden Sat, 06/25/2022 - 20:30

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Spread & Containment

Optimism Slowly Returns To The Tourism Sector

Optimism Slowly Returns To The Tourism Sector

Coming off the worst year in tourism history, 2021 wasn’t much of an improvement, as travel…

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Optimism Slowly Returns To The Tourism Sector

Coming off the worst year in tourism history, 2021 wasn't much of an improvement, as travel remained subdued in the face of the persistent threat posed by Covid-19.

According to the United Nations World Tourism Organization (UNWTO), export revenues from tourism (including passenger transport receipts) remained more than $1 trillion below pre-pandemic levels in 2021, marking the second trillion-dollar loss for the tourism industry in as many years.

As Statista's Felix Richter details below, while the brief rebound in the summer months of 2020 had fueled hopes of a quick recovery for the tourism sector, those hopes were dashed with each subsequent wave of the pandemic.

And despite a record-breaking global vaccine rollout, travel experts struggled to stay optimistic in 2021, as governments kept many restrictions in place in their effort to curb the spread of new, potentially more dangerous variants of the coronavirus.

Halfway through 2022, optimism has returned to the industry, however, as travel demand is ticking up in many regions.

You will find more infographics at Statista

According to UNWTO's latest Tourism Barometer, industry experts are now considerably more confident than they were at the beginning of the year, with 48 percent of expert panel participants expecting a full recovery of the tourism sector in 2023, up from just 32 percent in January. 44 percent of surveyed industry insiders still think it'll take until 2024 or longer for tourism to return to pre-pandemic levels, another notable improvement from 64 percent in January.

Tyler Durden Sat, 06/25/2022 - 21:00

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