US auto insurance shopping and new business growth cooled from "hot" to "warm" in the first quarter of 2026, according to the latest US Insurance Demand Meter from LexisNexis Risk Solutions.
Year-on-year shopping growth eased to 3.2% and new policy growth to 3.6%, but activity remained elevated relative to historic norms, underlining how unsettled the private motor market remains after several years of sharp rate increases and profitability pressure.
Almost half of policies in force had been shopped at least once over the previous 12 months by the end of Q1, with the annual shop rate reaching a record 47.3%. However, the slowdown in both shopping and new business suggests consumer behavior is beginning to stabilize after an extended period of disruption driven by inflation, supply chain issues and aggressive repricing.
LexisNexis linked the moderation partly to insurers implementing more rate decreases in early 2026 and to softer vehicle sales. Stabilization is also reflected in the recent flattening of retention rates among auto policyholders. March vehicle sales contrasted sharply with March 2025, when many consumers brought forward purchases ahead of potential tariffs, prompting an additional spike in shopping.
Across all US auto insurers, 35% of rate revisions were decreases, 39% were increases and 26% were rate-neutral. The aggregate rate change for the quarter was a reduction of 1.1%, with decreases averaging 5.1% and average increases 3.9%. Among the top 25 auto carriers, patterns were similar, with a slightly higher share of decreases and comparable average movements.
While overall growth remained positive, LexisNexis noted that rate cuts are less likely than increases to prompt consumers to shop. At the same time, regulators in several states have scrutinized the pace and scale of recent rate activity, so evidence of cuts may help ease some political and supervisory pressure.
The tilt towards more balanced rate actions suggests carriers believe the worst of the inflation shock may have passed, but continued uncertainty around repair costs, litigation trends and weather-related losses is likely to keep pricing strategies cautious.
Meanwhile, channel performance remained uneven in Q1.
The direct channel again led the market, with shopping growth of 9.4%. The exclusive agent channel also posted its second consecutive quarter of positive growth, up 5.6% and improving on 5.3% in Q4 2025. By contrast, the independent agent channel saw shopping decline by 7.9%, following a marginal 0.1% fall in the previous quarter.
Non-standard shoppers also weighed on overall growth. After a 12.2% rise in Q4 2025, non-standard shopping fell 5.8% in Q1 2026, a trend likely influenced by inflation, affordability pressures and the total cost of vehicle ownership. Standard shoppers tracked closer to the broader market, with quarterly growth of 3.9% year-on-year, down from 6.5% in the previous quarter.
Despite slower growth across most cohorts, drivers aged 66 and over continued to show the strongest shopping activity, with a 7.1% quarterly increase year-on-year. Other age bands recorded more modest movements - a 0.3% decline among shoppers aged 26 to 35; a 2.3% increase for those aged 36 to 45; and 3.4% growth in both the 45 to 55 and 56 to 65 segments.
Older policyholders are typically regarded as higher lifetime-value customers with more stable risk profiles, so sustained elevated shopping in this group is a notable signal for the market. These customers may be disproportionately attractive to competitors seeking to rebalance portfolios after recent volatility, according to the study.
“As auto insurance shopping growth begins to level off loyalty can be what separates temporary wins from sustainable growth. Insurers that invest now in retaining hard-earned customers will likely be better positioned as the market shifts from rapid expansion to measured momentum,” said Jeff Batiste, senior vice president and general manager, US auto and home insurance, LexisNexis Risk Solutions. “In this transitioning market, once loyal, profitable customers could be up for grabs. Insurers who recognise this can respond with compelling offers and personalised premiums to edge out competition.”
Only four states recorded shopping growth of at least 10% in Q1, down from 11 in Q4 2025. New York led with 11.8% growth, followed by California at 10.4%, Wyoming at 10.1% and Louisiana at 10%. New Jersey was just below the threshold at 9.7%.
LexisNexis pointed to rate activity as a key driver of these patterns. While many states saw decreases, markets such as New York and California continued to experience increases building on those implemented in 2025. In states where rate filing approvals take longer, the timing of changes can influence when shopping activity materialises.
Looking ahead, the combination of moderating rate pressure, stabilizing retention and a still elevated shop rate suggests a market moving from crisis management towards more measured competition.
For carriers, the focus is likely to shift from simply adjusting price to rebuilding loyalty, refining segmentation and holding on to profitable accounts in a market that is no longer “hot”, but still far from cool.
