Last year brought many changes to the insurance industry, including new technologies, moderate growth, increased mergers and acquisitions, and more; 2017 looks to be no different. With many environmental factors impacting the global market and our local market in the U.S., the industry will need to remain resilient, and producers will need to work harder than ever to compete in the industry.
Below we discuss the major environmental factors impacting the market in 2017 and what projections we see for the future of the industry.
Change and innovation will characterize 2017. New government administration and high customer expectations regarding technology will be major players in the success of agencies and producers alike. Ernst & Young reports on major environmental factors impacting the market in its 2017 US Property-Casualty Insurance Outlook, which includes:
- A change in administration. A new political landscape likely means regulatory changes and shifts in focus for legislation. Producers need to remain aware of potential changes and market adjustments and what they mean for their clients and their own future.
- Technology updates and challenges. Not only is technology changing and adapting, but cyberattacks are also. It’s important for P&C providers to increase their focus on technological developments and improve awareness of cybersecurity to protect their clients.
- The talent gap. There is an increasing talent gap in the market, especially with skills in the latest technologies such as social media, digital sales, and big data analytics. Young producers and millennials have the opportunity to hone their skills in these areas and shine in 2017.
With all that is impacting the industry, there is still a relatively positive outlook for 2017. Growth, although potentially less than the last couple years, is still expected, and the buyer’s market leaves competition at an all-time high. According to Willis Towers Watson’s Marketplace Realities report projections in the industry include:
- The buyer’s market trend will continue due to an over-supply of capacity.
- Reinsurance rates are likely going to continue to decrease.
- Loss ratios increased in 2016 and will continue to do so in 2017.
- Use of alternative market capital increased in 2016 and is projected to do so throughout 2017.
- Continuing in 2017, casualty insurance will be a buyer’s market.
- Increased capacity in the casualty insurance market ensures a favorable market for agencies and producers.
- Due to increased competition, shorter lead umbrellas will be attractive to access the first excess market quicker.
- Primary casualty insurance will likely see more decreases in rates
New Year, New You
The growing market in 2017 leaves room for top producers to excel with the support of their agency. Unfortunately, many traditional agencies do not allow producers to share in the increased wealth associated with success. They don’t offer equity in the book of business, stock ownership opportunities, or high commissions for both new clients and renewals.
With the new year, you can begin a new journey working at an entrepreneurial or lifestyle agency. Unlike traditional agencies, lifestyle agencies offer equity in your book, higher commissions on both renewals and new business, ownership options, and more flexibility.
If you find you’d like to request a confidential consultation to discuss the options available to you in a lifestyle agency, tell us about yourself using the form below and we’ll get back to you soon.