2023 promises to bring new innovations and ideas to the insurance space. Technology will continue to be a driver of growth and change — as will the people bringing creative ideas to life. Read on to learn more about the top 2023 insurance trends we predict and how independent agents and brokers can prepare to take advantage of these trends in the new year.
Top Five 2023 Insurance Trends to Watch
These are the top insurance trends we predict will take over in 2023:
1.) Embedded insurance will continue to grow.
The embedded insurance market could be worth over $700 billion by 2030. We can expect to see more applications of embedded insurance and more creative ways to add insurance products to purchases consumers are already making. Finding ways to bring more value to consumers in an easy, frictionless way is the point of embedded insurance and that trend is likely to continue. Watch for more cross-sells at the point of sale for consumer products from iPhones to Teslas.
2.) The need for cyber solutions expands.
Cyber insurance remains critical insurance coverage for many businesses as the risk of a cyber attack has grown. Fortune Business Insights expects the cyber insurance market to grow by 25.7% by 2029. With every type of business at risk of cybersecurity issues, coverage is essential. Cyber insurance can help protect firms from ransomware and other cyber attacks by notifying customers, working with regulatory agencies, and providing a defense.
3.) Insurance employment opportunities may level out.
Following the upheaval of the global pandemic and the Great Resignation that followed, employment has changed in the last few years. With remote work opportunities becoming more popular after lockdowns, some employers have struggled to hire and retain talent. This is starting to settle as we move into 2023, with Forbes calling it the Great Rebalance. This is good news for agency owners as they hire, train, and promote talented individuals. Insurance agencies can provide people looking for positive, long-term work with many opportunities.
4.) Telematics and usage-based insurance are on the rise.
One new model insurance companies are using with auto consumers is usage-based insurance. The idea of paying for what you consume is popular with policyholders. Usage-based car insurance rates include a base rate plus a per-mile rate, meaning consumers pay for the number of miles they drive each month.
Most major auto insurers offer telematics discounts to their policyholders as another way for consumers to pay for insurance based on their actual driving habits. Drivers download a mobile app or plug in a device to their vehicle to measure their driving — things like how fast they accelerate or brake, what time of day they drive, and how long their vehicle sits in traffic affect the algorithm. When consumers share this data with their carriers, the carrier can price their policies more effectively. The carrier also benefits from having the combined data of millions of drivers.
Talk with your policyholders about usage-based insurance and telematics discounts. If your clients are not already receiving a discount, they may want to enroll in their insurance company’s telematics program.
5.) Enhanced IoT moves the industry to a predict and prevent model.
Various IoT applications can help the insurance industry, from telematics in auto insurance to wearables and their use in workers’ compensation applications. This will only grow as more IoT-enabled devices are in use. Consumers have started to become more comfortable with trading their data for something in return, like a discount or enhanced risk protection. And insurers can use data to move to a predict-and-prevent model rather than always being reactive and responding after an incident has happened.
Consider satellite imagery that allows a carrier to warn policyholders in advance when catastrophic weather heads their way. This advanced notice can save lives and reduce property damage and carriers will see fewer claims by deploying this additional risk mitigation.
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