What's happening in the insurance industry this year? While you can't know exactly what will transpire, each year it's important to look at the trends so that you can plan for the future. How can your insurance agency be prepared for what's coming up in 2018?
The Insurance Industry is Adapting to Environmental Change
2017 has been a year of fires, such as the California wildfires. It has also been a year of floods and wind, primarily from hurricanes Harvey, Irma and Maria. According to Reuters, "North American commercial property insurance rates could rise by as much as 25 percent during 2018 for properties that suffered catastrophe losses this year." Even if a business was not damaged, if it is in an area that is prone to problems in the future, this year has been a wakeup call for the industry.
Larger insurance agencies may treat this year's storms and fires as a one-off, but they could also choose not to insure homes and businesses in the area due to the high risk of loss. If this is the case, there will be room for other insurance agencies to enter that market, because homeowners will be scrambling to find another insurer.
The auto insurance industry has also been impacted by disasters. Disasters not only damage homes: they also damage vehicles. While this is out of your control, it's something that you can communicate to those who may wonder about the increases in rates.
Distracted Driving Continues to Be a Concern
In the auto sector, the problems that people cause for themselves are more of an issue. Auto insurance rates are rising between 3 and 8 percent, not because of random accidents, but because of distracted driving. According to Wired, "The average driver spends 3.5 minutes on the phone per one hour trip, a stat that sounds worse when you realize just a two-second distraction increases your risk of crashing by 20 percent." The prevalence of device use when drivers are behind the wheel has led directly to this increase in auto insurance rates.
You can't change that overall industry trend, but your insurance business can address the issue of distracted driving and rising auto insurance rates through discussion on your blog, individually when drivers sign up for insurance, and through educational seminars. By becoming a voice to speak out for safe driving in your community, you can enhance both your insurance marketing and community safety.
Insurance Rate Calculations May Change
A client's insurance rate is based on many different factors. Will some of those factors become illegal in 2018? According to Nasdaq, New York insurance companies are no longer allowed to use "Education and occupation as factors that affect auto-insurance rates, contending that their use unfairly discriminates against consumers who have low incomes, low levels of education, or both." This is a trend to watch, and it would mean that some of your clients might have different insurance rates, depending on the factors that were at play in their original rate.
At American Agents Alliance, we're here to help you as you grow your insurance agency. Whether you're posting insurance jobs, looking at insurance marketing trends, or looking for networking opportunities, contact us.