2024 Mid-Year Insurance Trends Update

Last December, we wrote a semi-humorous take on the annual tradition of insurance industry predictions. Now it’s time to see how our predictions have held up, or evolved, during the first part of 2024. We’ll also round up some of the current 2024 trends, even if we didn’t predict them.  

Insurance industry predictions we got right

Annuity sales still on the rise 

Given the popularity of annuities in recent years, this prediction wasn’t too much of a surprise. But, we got it right, and boy have annuity sales been up in 2024! The Life Insurance Marketing & Research Association (LIMRA) reported the first half of 2024 set a new record for annuity sales, building on the first quarter of the year’s already-huge “14th quarter of consecutive growth.” With consumer demand for annuity products at an all-time high, we wouldn’t be surprised to see even more insurance agencies moving towards dually licensed broker dealers to supply consumers with securities-backed insurance products. 

Carriers still trying to cut operating expenses as claims costs rise

Natural disasters inflicted an estimated $62 billion in insured losses (worldwide) in the first half of 2024, compared to $95 billion in losses in the entire 2023 calendar year. This puts the first half of 2024 70 percent above the 10-year average. Simply put, 2024 has been and will continue to be an expensive year to be an insurance carrier. In response to these losses, carriers have to keep finding new ways to lower their operating expenses to offset rising claims. We’ve previously written about several ways they can do that, including continuing to invest in digital transformation initiatives where every dollar spent will yield multiple dollars of savings through highly efficient operational processes.    

Artificial intelligence making inroads towards becoming more “human” 

We’re still not approaching the “cyborg agents” we jokingly predicted at the end of 2023. However, the reality of AI is that it’s becoming increasingly more “human” in ways that’ll benefit insurance and other customer-focused industries. EVI, the world’s first “emotionally intelligent AI” is currently being trained to recognize and reproduce human emotions so it can provide more empathetic customer service in places like high-volume call centers. We’re not saying AI will ever replace the expertise a licensed insurance producer provides, but wouldn’t it be nice to have something that could answer more basic client questions without making them want to smash their phones?  

The insurance workforce continues to grow

While it’s not quite the Gen-Z boom we hoped for (younger generations still see insurance as boring) the Insurance Information Institute reports in its preliminary 2023 statistics that the number of total workers across the industry hit an all-time high of just under 3 million people. This isn’t an excuse to relax though: There are still around three-quarters of a million insurance employees aged 55 and up in 2024. Insurance agencies and carriers can’t take their foot off the gas when it comes to making the industry appealing to a younger crowd. Harkening back to another one of our predictions, maybe this (for real) Insurance Reality Show will help!   

New developments for 2024

From the Key Bridge Collapse to the CrowdStrike worldwide outage, 2024 has been anything but predictable so far. Here are a few industry trends that we didn’t put in our predictions but have emerged nonetheless. 

Cyber risk insurance sees disproportionately high growth

According to MarshMcLennan’s 2024 Business Insurance Trends, U.S. business owners name cybersecurity and data privacy as their top-of-mind concern. This isn’t surprising, given the frequency of cyber attacks (they’ve more than doubled since 2020) and how much they cost (on track to reach $10.5 trillion annually worldwide by next year). 

It’s no wonder then that cyber insurance is also experiencing a boom. Global reinsurer Munich Re reported that the market was $14 billion in 2023 and estimated to grow to $29 billion over the next few years. While insurance premiums are on the rise across the board, the Federal Reserve’s July 2024 edition of The Beige Book states, “Insurance costs continued to rise, though at a slower pace, with cyber risk insurance often mentioned as an outsized expense.” This is according to information from the Atlanta Fed on inflation and prices over the last quarter.

With cyber liability premiums growing quicker than others, the vast amount of growth potential among cyber lines of business means insurance carriers should continue to develop and sell products to meet demand; and agencies and producers need to make sure they’re properly licensed and trained to sell them. Did we mention AgentSync can help with that?        

A surge of Affordable Care Act (ACA) plan signups 

The Kaiser Family Foundation (KFF) reported in early 2024 that signups for ACA plans via the healthcare marketplace have surged, reaching 21.3 million people. This is the highest number since the launch of the ACA marketplace and adds 5 million enrollees from last year’s (also record) numbers. KFF attributes a lot of this growth to both increased subsidies that make ACA plans more affordable and to people losing their Medicaid coverage after pandemic-era restrictions on dropping people from Medicaid expired.   

For health insurance agents licensed to help individuals find ACA qualified plans, the business opportunity is huge. As the 2024 open enrollment period approaches, agencies may want to onboard more producers to assist consumers in another potentially record-breaking ACA season. 

Looking for a way to quickly scale your producer force while ensuring absolute compliance across all states? AgentSync can get you ready to meet ACA and Medicare Open Enrollment season demands with the flexibility to deactivate producers as needed when the season closes.   

Rising childcare costs also attributed to insurance hikes 

The challenge of affordable childcare isn’t new. One more recent development, however, is that liability insurance costs for childcare providers are on the rise which is leading to an even greater crisis for parents and childcare providers. On top of trying to find and keep qualified childcare workers, daycare providers are now seeing up to 94 percent increases in their liability insurance premiums, according to reporting by National Public Radio. 

The price increases are enough to put some providers out of business and drive others to run informal, unregulated child care businesses without any insurance at all. Insurance carriers that can find ways to keep prices affordable may find themselves with a booming business as parents are desperate for affordable childcare and providers are desperate for affordable insurance.   

Make producer compliance one of your 2024 trends

Regardless of what else is happening in the world of insurance, the need for tightly buttoned up compliance practices remains a constant. For insurance carriers, agencies, and MGAs/MGUs, compliance can be expensive, time consuming, and even legally risky when not done the right way. See how your insurance business can make compliance a cost saver and a business differentiator with AgentSync.