Q1 2025 Insurance Market Report: Shifts in Consumer Shopping and Switching Patterns

The Q1 2025 J.D. Power Insurance Intelligence report indicates notable changes in consumer shopping and switching behaviors within the auto, home, and renters insurance markets. In auto insurance, the shopping rate rose to 14.1%, a year-over-year increase driven by consumers exploring more options, yet the switching rate held steady at 4.1%, suggesting hesitance to change providers despite increased market activity. The sector faces challenges from rising vehicle prices, repair costs, and ongoing supply chain disruptions, prompting insurers to lean towards traditional underwriting and raising premiums for higher-risk policyholders.

Home insurance saw a slight uptick in shopping rates to 6.6%, though switching rates slightly declined to 2.5%. Insurers in this sector are balancing profitability pressures exacerbated by inflation-driven increases in home repair and construction material costs, leading to potential rate hikes and stricter underwriting controls. Meanwhile, renters insurance experienced a marginal decrease in shopping rates to 6.2%, but switching rates fell more sharply to 3.8%, reflecting the market's relative stability and less volatility in consumer switching behavior.

The report underscores that economic factors such as inflation and tariffs on critical materials like steel and aluminum are likely to sustain upward pressure on premiums across these insurance lines. Construction material cost volatility is particularly impactful on property and auto repair claims, influencing underwriting and pricing strategies. Insurers are expected to prioritize profitability through focused rate adjustments and refined risk assessments to navigate the evolving cost environment.

Looking forward, the insurance industry will need to adapt dynamically to ongoing economic uncertainty, which affects both consumer behaviors and claim-related expenses. Understanding these trends is essential for carriers aiming to optimize retention strategies while managing rising claim costs. The evolving shopping and switching patterns also signal shifting consumer expectations and market competitiveness, requiring insurers to balance growth ambitions with financial discipline.