The insurance industry has struggled with several challenges in the last few years. The hard market in many lines, along with macroeconomic conditions after the pandemic challenged many insurers and agents. But how does the insurance industry outlook in 2024 compare? Read on to find out what we may expect next year.
2024 Insurance Industry Outlook
Some sources are optimistic about 2024, noting some relief in various areas that will affect the P&C landscape, while others see the hard market continuing through next year. While Fitch Ratings has an overall neutral view on the market in 2024, it does expect performance to improve in personal lines auto, due in part to moderating severities and the effects of rate increases. Combined ratios will remain over 100%, however, according to their predictions. They also predict the hard market will continue in 2024.
Deloitte reports reinsurance rates will likely remain high in 2024 as the US continues to see increased demand for cat reinsurance. With the continued property market pressures and increasing premiums carried over from 2023, these challenges may make the personal insurance market difficult in terms of capacity and rates. On a positive note, partnerships across the industry should continue to strengthen in 2024 as insurers and vendors find ways to better meet customer needs.
In its State of the Market 2024 Outlook report, Amwins sees the market as beginning to soften with some better opportunities becoming available. They note rate increases should slow, which will be welcome news for policyholders. But pressures will continue for cat-exposed properties with underwriting guidelines tightening. Amwins notes the increasing prevalence of parametric cover as an option, citing a 500% increase in parametric submissions in 2023. This creative combination of traditional and parametric solutions may be a popular and helpful trend in 2024.
How 2024 Insurance Industry Trends Affect Agents and Brokers
With these upcoming insurance industry trends on the horizon, agents and brokers can focus on preparing now to be ready to meet the challenges and opportunities in 2024.
Be proactive about rate changes.
Work with your policyholders in advance about upcoming rate changes. Knowing the marketplace challenges, you can send notices about the market and use thought leadership to offer insights. If a policyholder will see a rate change at their renewal, it is best to be transparent about the increase while being proactive about finding ways to help your customer have the best coverage at the best rate for them.
Research the market in your area.
Different parts of the country may be affected by rate changes and regulatory issues in different ways. Research how your region is changing so you can inform your policyholders. You can talk with others in your local network, review regulatory bulletins, and connect with others in your agency to see how the insurance industry outlook for 2024 will affect your business.
Stay on top of trends.
Continue focusing on trends and changes that impact your business and policyholders throughout the year. As rates change or you find new solutions to help your customers, you can share that information during the year. Try attending webinars, conferences, and seminars to keep your knowledge fresh. Engage with thought leaders on LinkedIn and other social media sites and talk about marketplace changes.
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