The insurance industry. Growing and Declining Sectors

The insurance industry has made great contributions to the economies of many countries by reducing losses and establishing a safety net that promotes trade. People pay high insurance premiums for business and personal risks, which are taxed by the government and funds used for sustainable economic plans. To understand which insurance sectors a country needs to focus on to buffer and develop its economy, we need to look at the growth and decline sectors of the insurance industry. Due to innovation, severe market conditions, and customers demanding the transformation of the insurance industry, there has been growth and disruption.

The following are the main sectors adversely affected by these changes;-

Car insurance (decline)

Streetlight Data's recent report shows that since 2020, the auto insurance industry has fallen sharply. Commuter traffic has declined due to efficient public transportation such as the subway system and environmental protection measures to reduce vehicle emissions. Consumers no longer need to pay a pay-per-mile policy for their vehicles because they don’t drive as often as they used to.

Many policyholders try to maintain flexible arrangements to ensure that insurance rates and driving habits are consistent. In addition, records show that since 2020, various customers have switched to buying auto insurance online; therefore, auto insurance policy holders are struggling to adapt to the customer experience that wants to increase and maintain customer retention rates.

Life insurance industry (rapid growth)

Currently, due to the global pandemic that began in 2020, many citizens are planning to purchase life insurance. In 2021, policy sales in the life insurance industry increased by 8% from January to June. LIMRA, a funded research group, found this to be the most significant increase since 1983.

In the second quarter of 2021, the number of premiums increased. This is the largest record since the third quarter of 1987. As a result, the total number of premium policies in the first half of 2021 has increased by 18% compared to the second half of 2020. Finally, the new premiums for the second quarter of 2021 increased by 25%.

Property insurance sector (steady growth)

In the United States alone, data shows that 90% of households have property insurance. In 2021, multi-industry premiums will increase by an average of 4%. Insurance agency Matic reports that citizens’ credit scores or age will continue to be more affected. As a result, people have recently found themselves paying hundreds of dollars more when buying premium home insurance.

In their survey results, individuals with medium and low credit scores have been getting higher prices and higher premiums. In addition, compared with people with good credit scores, people with low credit scores pay an average of $300 a year. This resulted in an average price increase of $85 in the insurance industry.

Despite rising premiums, many people are still buying insurance for their homes, ranches, and retail stores. This may be due to the increasing number of natural disasters and civil unrest in recent months.

Electronic equipment insurance (emerging fields)

This insurance policy is relatively new and can provide comprehensive protection for the loss or damage of electronic products to save repair and replacement costs. Most people use smartphones, computers, and other gadgets that help improve work efficiency. With the continuous innovation of technology and automation in the service industry, this is the most promising insurance.