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Between Climate Change, Social Awareness and Technology, How the Insurance Industry Will be Shaped in the Near Future?

In the post-pandemic era, marked by unprecedented trends and rapid changes, industries have grappled with new regulations, inflation, geopolitical volatility, and technological advancements. The insurance industry was no exception; in 2023, insurers suffered setbacks in terms of profitability and growth rates.

A recent article by Deloitte provides a comprehensive analysis of the insurance industry's performance in the past year and offers projections for the near future.

Non-Life Insurance: 

You likely noticed a peak in the price of your auto insurance or home insurance last year; unfortunately, 2024 won't be better. Insurers are struggling to raise prices to accommodate inflation, new technologies, and catastrophic events. 

  • Despite witnessing an easing of inflation in 2023, the increase in insurance premium rates was less than that caused by inflation.
  • Concerning new technologies, the shift towards electric vehicles and self-driving technologies requires higher maintenance costs. In fact, by April 2023, auto repair costs rose to 20.2%, while premiums increased to 15.5%. 
  • The surge in catastrophic events, such as wildfires, floods, and severe storms, along with an increase in home repair and replacement costs, represents a challenge for insurers. This challenge led to insurance providers such as State Farms and Hartford Financial Services Group terminating home insurance services in the State of California.

Despite these challenges, several opportunities have emerged that can benefit both insurance providers and customers, such as leveraging artificial intelligence (AI) technologies to launch new policies covering AI underperformance and using this technology as a tool to mitigate risks.

Make sure to check the Deloitte article to expand your information regarding non-life insurance, life and annuity insurance, and, trends that will define the future of the insurance industry.