TransUnion’s 2025 Personal and Commercial Lines Annual Insurance Outlook Report, released November 13, 2024, argues the insurance industry stands at a crossroads in 2025, facing unprecedented challenges from climate-driven disasters while embracing digital transformation and adapting to changing household demographics.
Key Market Developments
The following are some of the findings and opinions from the report.
Auto Insurance: Signs of Recovery
After years of profitability challenges, the auto insurance sector shows promising improvement. According to TransUnion’s analysis, state regulators have allowed premium increases to outpace rising costs, enabling insurers to return to market stability. These improvements mark a significant turnaround from the pandemic-era struggles when supply chain disruptions and parts shortages drove claims costs to unsustainable levels.
Property Insurance: Continued Pressure
The property insurance market presents a starker picture. TransUnion reports that 2024 marked another year of catastrophic losses exceeding $100 billion, continuing a concerning trend. The report highlights that property insurers face particular challenges due to:
- 12-month policy cycles (versus 6 months for some auto carriers), extending the time needed for rate changes to take effect
- Unprecedented natural disaster frequency, with 2024 recording multiple billion-dollar weather events
- Regulatory resistance to needed rate increases in many markets.
Digital Transformation Acceleration
A particularly noteworthy finding shows insurance shopping behaviors shifting dramatically toward digital channels. TransUnion’s data reveals:
- 16% year-over-year increase in online insurance shopping during Q3 2024
- 346% increase in online display advertising spending by insurers
- 81% growth in social media marketing investments.
Demographic Shifts Impact Risk Profiles
One of the report’s most significant revelations concerns changing household composition patterns. TransUnion identifies a reversal of historical trends toward smaller households, noting increased multi-generational living arrangements. This shift carries important implications for insurers:
“Weather-related risks dominate property insurance, but non-weather losses often reflect the household’s behavior, which insurers can manage using behavioral data,” notes Stothard Deal, Vice President of Insurance Market Planning at TransUnion.
Commercial Lines: Untapped Opportunities
The report identifies a significant market opportunity in the commercial sector, particularly among small business owners. Key findings include:
- An estimated 15 million business owners in personal line portfolios lack appropriate commercial coverage
- 82% of business owners express willingness to purchase commercial insurance online
- Only 36% successfully obtained online quotes in 2024, indicating a significant gap in digital service delivery.
Regulatory and Market Evolution
The insurance landscape continues to evolve on the regulatory front. The report highlights two significant developments:
- Colorado and New York are leading initiatives requiring insurers to assess rating plans for potential discrimination against protected classes
- New TCPA amendments taking effect in early 2025 will impact how insurance quote websites handle consumer data
Looking Ahead
TransUnion’s report suggests several strategic priorities for insurers moving forward:
- Enhanced digital quoting capabilities to meet consumer expectations
- Improved cybersecurity offerings as consumer awareness grows
- Development of more sophisticated risk assessment tools
- Focus on fairness and equity in pricing and claims processes.
For Massachusetts independent agents, these findings suggest several concrete action steps:
- Develop a mobile-first digital quote platform that allows clients to start quotes online but seamlessly transition to agent assistance when needed. Even simple solutions like calendaring tools for appointment scheduling can differentiate your agency.
- Create targeted marketing campaigns focused on multi-generational households, particularly in communities with high concentrations of Gen Z adults living with parents. Consider offering family package policies that provide both auto and property coverage for multiple generations under one roof.
- Launch a systematic review of your personal lines book to identify clients who may be running home-based businesses or participating in the gig economy. These clients need commercial coverage and represent an immediate cross-selling opportunity that larger carriers might miss.
- Invest in cybersecurity education for both staff and clients. Position your agency as a trusted advisor on cyber risks, particularly for small business owners who may not understand their exposures.
- Consider implementing text messaging platforms for client communications – TransUnion’s data shows younger insurance buyers strongly prefer texting over email or phone calls for routine insurance matters.
The report concludes that while challenges persist, particularly in property insurance and commercial auto lines, opportunities exist for carriers willing to embrace technological innovation and adapt to changing consumer demographics.
Get the Full Report
For a more a in depth look at the trends and detailed data insights outlined in this article, insurance professionals can download a complimentary copy of TransUnion’s Annual Insurance Outlook Report” at 2025 Personal and Commercial Lines Annual Insurance Outlook | TransUnion.
