On the surface, it may appear to be too volatile a time to start a business. Inflation is high. We’re still trying to return to a post-pandemic “new norm.” Not to mention war overseas is having an impact on the global economy. While these might be tremendous challenges for a new business venture, investing in a franchise is quite different. When you start a franchise, you get an existing brand name with a proven track record of business success. You also get all the resources you need to adapt to emerging trends and the support needed to become a successful new franchisor, such as funding assistance, marketing support, top-tier technological tools, access to top-tier carriers, and more.
With that in mind, let’s give you a head start on 6 developing issues that will play critical roles in determining insurance industry growth in 2024.
1. New Types of Risky Business
Funny how the insurance market is associated with being boring, mundane, or vanilla. The very nature of the business revolves around risk. Uncertainties around damage to expensive automobiles, safety equipment in commercial areas, vital home fixtures, and even life itself are why so much insurance industry growth exists next year and for the foreseeable future.
Economic volatility, political unrest, and climate change have introduced new factors in this already “risky business.” Climate change, in particular, is affecting insurance industry growth with immeasurable losses due to extreme weather events happening just about every month in some corners of the world.
With extreme weather comes extreme risk. As a result, many providers may look to reinsurance to protect themselves against heavy claim volumes when disastrous fires, floods, tornadoes, and more strike, as they seem to do today more often than in the past.
2. A Talent War Wages Onward
Every industry from retail to restaurants, banks, and pool cleaning services is experiencing a talent war; The insurance industry is no different. Since the pandemic forced companies to trim the workforce, many people have decided they prefer working for themselves. The lesson is that if you want great people, you’ll have to make it worth their while to work for you.
Let’s face the facts: coverage providers have never provided a sexy offering to job seekers. Now, companies must do more than just offer financial stability. If you want talented people to join your team, you’ll need to provide the perks the modern generation of job seekers is looking for. Start by introducing flexible hours like four-day workweeks, hybrid options, or a remote-first culture. People want that flexibility and other perks, like more comprehensive healthcare, tuition reimbursement, and more. Today’s providers will need to match the expectations of the new workforce.
3. Diversity, Equity, and Inclusion (DEI) Must Reach Customers and the Workforce
While many insurers are taking proactive steps toward DEI in their front-line staff, few have taken those initiatives to reach the leadership level. Awareness is no longer good enough. Providers must take serious measures to bring talented people from marginalized communities into executive positions.
Underserved communities are another necessary extension for DEI efforts. Low-risk customers can find products and services to protect them from just about any company. But a huge opportunity awaits the savvy insurer willing to customize offerings to high-risk customers.
4. What To Do About Inflation?
Inflation got scary for American consumers last year. Although the situation is improving, it’s still outpacing increases for most salaried workers. The problem has become a serious detriment to the insurance industry as well.
Although coverage is considered mandatory in most states, competition still drives the marketplace. As inflation skyrocketed last year, providers had to instill rate hikes across just about all lines of service. Even with increased prices, however, inflation severely slashed profits, causing a massive obstacle for insurers looking to expand their products and service to different markets.
5. Technology Complements the Core
Insurtech is expected to remain one of the most influential insurance market trends in the new year. According to CB Insights, technology funding has increased by 60% in the U.S. over the last three years, from $1.46 billion to $2.44 billion.
Does this seemingly never-ending climb in tech investment mean human capital should be ignored? Absolutely not. Most experts agree that investments in AI, blockchain, and data analytics are best suited to complement the workforce.
With all the doom and gloom prognostication about machines replacing every job in the world, we’re learning that operations run best when workers are provided with the best technology possible to answer questions more easily, process claims faster, and record a bill payment with a single keystroke. The sweet spot for the foreseeable future is a partnership between humans and machines that complement each other for the ultimate customer experience.
6. The Customer Is Still Always Right
Speaking of that experience, the old adage hasn’t changed: the customer is still always right. Insurance industry growth will always be there for franchise investors and entrepreneurs if they respect this rule above all others.
Today’s customers want options. Whether someone prefers to do business with a chatbot or an actual person may depend on an age demographic. For example, baby boomers might be scared away by a bot asking how they can help them on a website. Millennials, however, might get irked at the first sign of a phone tree.
Everything Everywhere All at Once wasn’t just a great movie. It’s also the ideal approach to modern customer service. To truly take advantage of current insurance market trends and predictions, a multichannel approach that makes people of all demographics comfortable is best. Accessibility is also crucial. Make use of every device, from smartphones and tablets to laptops and even traditional landlines. Yes, some people still have landlines. Additionally, process efficiency improvements and call handling experience will remain critical in choosing one provider over another, especially if the price is relatively equal.
Freeway Franchise is pioneering the trends for insurance industry growth in 2024 and beyond.
If you’re interested in joining our award-winning team as a new franchise owner, contact us today at 877-822-3024 or fill out a quick online request form. We have representatives waiting to get you started on making your entrepreneurial dreams come true!
