If you feel well prepared to enter the insurance franchise business, congratulations. You’ve won half the battle. You know what’s going on industry-wide today. But what will your business look like, and how will you have to operate it in three years? In five? Ten?
Key Takeaways
- Technological Transformation: AI and insurtech are transforming underwriting, claims, and customer relations.
- Changing Consumer Behavior: Young consumers prefer digital interactions, driving the Direct to Consumer (DTC) model.
- Digital Presence Importance: Strong digital presence is essential for attracting online shoppers.
- Regulatory Vigilance: Evolving regulations require constant monitoring for compliance.
- Market Opportunities: New markets emerging in cybersecurity, climate risks, and gig economy.
- Franchise Support Value: Forward-thinking franchisors provide crucial support for industry navigation.
- Long-term Planning: Success demands staying informed and adaptable to industry trends.
You’ve chosen a vibrant career path. If you get involved with a top insurance franchisor, you’ll have access to a diverse product line consisting of major brands, and you’ll get comprehensive training and ongoing support from the moment you open your doors for business.
But to maintain ongoing success, you must stay savvy with the near- and long-term future of the insurance industry and know the franchise trends that will make the biggest impact on your operation in the next few years.
That’s not always an easy commitment, though. With the rocket speed of today’s digital revolution and insurtech innovations, you can’t always keep up. One good start, though, is a review of this brief guide to the future of insurance and the insurance industry trends that are likely to have the most impact on your own entrepreneurial experience.
Market Outlook: Where Is the Industry Headed?
Robots are no longer just a science fiction plot point. Artificial intelligence is already playing a big part in the insurance industry, and AI will become an even more powerful factor in years to come. So will other technologies that will change how you do business within a few years.
Together, these forward-looking tools and strategies are called insurtech. This buzzword is simply a shorthand for the new technologies and strategies being used in the policy sector to reduce spending, increase operational efficiencies, generate new business, and improve the customer experience.
These insurance trends and tools might sound futuristic, but they’re here today. You’ll be using many of these innovations now or very soon to run your own business.
Technological Innovations and Digital Insurance
Do underwriters have to be human? Today’s insurtech answer is that AI can be as adept at assessing and appraising risk, approving coverage, and setting rates. After all, AI is an analytical tool, and that’s at the heart of what an underwriter does. But AI can do it with greater speed, efficiency, and accuracy and at a potentially lower cost.
That’s why you’re likely to make AI a key employee shortly, but not just in risk assessment. The technology is already proving to be invaluable in new product development, claims processing, fraud detection, and even sales and customer relations.
Changing Consumer Preferences and Behavior
“(The rich) are different from you and me.”
That F. Scott Fitzgerald quote could be altered a little to discuss the youngest insurance consumers. They’re different from the generations that came before them. They grew up with the internet, and the experience has changed their worldview. They do everything differently, and that includes researching, shopping for, and buying insurance.
That reality has resulted in a new business model known as direct to consumer (DTC) insurance. DTC reflects the reality that your younger customers prefer to shop online for a policy in much the same way they buy groceries, shoes, and books today.
DTC can be used by insurers to sell directly to consumers and eliminate the intermediary — you. However, brokers can adopt their own DTC models by building e-commerce websites or other digital platforms that address this shopper clearly and efficiently.
In other words, the DTC model is a threat — or an enhancement — to your own operation, depending on how you view it and how quickly you act.
Younger consumers have also grown up with the internet as their answer generator. You might be able to establish a one-on-one connection with older consumers because they call you on the phone or drop in to your office — but your younger customers won’t do this.
They’re more likely to visit your website (if you’re lucky) or go elsewhere online to get answers to their product, cost, and coverage questions.
Again, this puts the focus on the quality of your website. How inviting and user-friendly is it? Is the copy search engine optimized to rate high for search engine queries? Are digital forms of contact, such as email and texting, readily available? Whose website or social media platforms will your prospective customers visit — yours or those of your biggest competitor?
If you’re involved with a market-savvy franchisor, they’ll be able to help you establish a web presence that helps you attract and interact with today’s younger consumers. It will simply be part of the franchise services they offer (or should).
Regulatory and Compliance Trends
The laws and regulatory environment are changing as quickly as the technologies impacting the insurance industry and the ways you do business. Federal rules and regulations address issues such as data collection and privacy, misleading sales practices, and product development and presentation.
You’re regulated not only at the federal level but also by state laws and regulations that can vary widely depending on where you conduct your business.
The cost of non-compliance is high, but your reputational risk is even higher. The solution is to stay trained on the changing regulatory and compliance landscape, and make sure your franchisor can assist you and your people in this regard.
Market Expansion and New Opportunities
The first time you heard the word cybersecurity wasn’t that long ago, was it? And now, businesses large and small are eager customers for cybersecurity insurance.
This is just one example of how the insurance industry stays abreast of a changing world. For another example, consider policies that might now be in your portfolio to address climate change and cover such extreme weather events as wildfires and hurricanes.
You might also explore new business markets with insurance products addressing the unique needs of those in the gig economy.
The point is that your franchisor must be adaptable as a product innovator. It should introduce products that confront the needs of markets as soon as they emerge from changes in culture, lifestyle, the environment, and technology.
You also have an opportunity to expand your marketing footprint like never before through your online presence. Make sure your franchisor helps you take full advantage of the opportunities and confront the challenges to be found in a changing world.
Meet the Emerging Future With a Freeway Insurance Franchise
At Freeway Insurance, we stay at the forefront of technological change — and keep our franchises on the leading edge, too.
We offer our new franchisees from all over the country a streamlined onboarding process, top-tier training, ongoing support and guidance, and a full inventory of major-brand insurance products that change with the times.
You’ll find a Freeway franchise to be highly affordable and one of the best insurance franchises to open — even if you’re a first-time business owner.
Start by calling a Freeway Insurance franchise representative at (877) 822-3024 or give us your contact information online. However you reach out, we’ll help you thrive as an independent business owner in today’s economy — and tomorrow’s.
