2020 Mid-Year Premium Insights Report
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By Matic
We’re excited to release Matic’s Mid-Year Premium Insights Report, which includes findings on recent trends in insurance premiums from over 30 property and casualty insurance carriers. For this report, we used real data including premiums, coverage A, and FICO score averages from a random sample of 30,000 policies and 2.5 million quotes analyzed from January 1, 2018 through May 31, 2020. We also reviewed data on savings by age group, which is based on the difference between current policies and new policies sold to customers between June 1, 2019 and May 31, 2020.
Here are three major takeaways from our report.
1. Home insurance premiums and coverage A continue to grow.
In the last two years, we’ve seen a rise in both premiums and average coverage A (dwelling coverage). Between 2018 and 2019, premiums in the U.S. increased an average of 3.9%, while coverage A increased 2.8%. Between 2019 and mid-year 2020 (May 31, 2020), premiums increased by 1.8%, while coverage A increased 3.8%.
2. Average premiums increased the most for those with “average to good” FICO scores.
A homeowner’s credit rating may impact their insurance score, which is used by insurance carriers in most states to represent the probability of an individual filing an insurance claim. Currently, California, Hawaii, Maryland, Michigan, and Massachusetts ban or limit the use of credit scores in determining policy rates.
Despite these limitations, insurance premiums increased relative to lower FICO scores. Year-over-year, average premiums increased the most for those with “average to good” FICO scores by 4.49%, despite average coverage A trending slightly down by 0.54%. Customers with lower FICO scores also saw an increase in premiums that correlates to an increase in coverage A.
Average premium by FICO score
| FICO Bucket | Avg. Premium 2018/19 | Avg. Premium 2019/20 | % Change |
|---|---|---|---|
| <580 | $1,300 | $1,327 | 2.08% |
| 580-669 | $1,185 | $1,237 | 4.39% |
| 670-740 | $1,114 | $1,164 | 4.49% |
| 740-799 | $1,077 | $1,082 | 0.46% |
| >800 | $1,016 | $1,061 | 4.43% |
Average coverage A by FICO score
| FICO Bucket | Avg. Cov A 2018/19 | Avg. Cov A 2019/20 | % Change |
|---|---|---|---|
| <580 | $242,107 | $253,079 | 4.53% |
| 580-669 | $258,685 | $267,207 | 3.29% |
| 670-740 | $292,923 | $291,349 | -0.54% |
| 740-799 | $330,434 | $315,488 | -4.52% |
| >800 | $365,392 | $341,425 | -6.56% |
3. Homeowners over 63 have the greatest opportunity to save.
Matic compares coverage and current insurance premium for customers and uses proprietary matching technology to identify a better rate with the same coverage. Based on the age of the customer and policies sold between June 2019 through May 31, 2020, Matic found an average of $510 in savings. Additionally, customers over the age of 63 have the greatest opportunity to save. This is partially due to downsizing and homeowners experiencing increasing premiums of 3-4% annually, which adds up over time.
| Age Bucket | Average Savings |
|---|---|
| <27 | $241.54 |
| 27-34 | $299.53 |
| 35-42 | $389.03 |
| 43-55 | $541.41 |
| 56-62 | $514.40 |
| >63 | $628.33 |
Have questions about Matic’s Mid-Year Premium Insights Report? Members of the media can contact Sarah Berg, VP of Marketing, at [email protected].
