2024 insurance trends from a financial adviser perspective
finance
January 5, 2024The short-term insurance industry is currently undergoing significant transformation due to various disruptive forces. These include technological advancements, heightened regulatory scrutiny, evolving client behaviour, climate changes, and the increasing threats of cyber security, all of which are impacting the claims landscape negatively. According to a recent report by Ernst & Young, despite this turbulence, there are discernible signs of future growth. These include robust demand signals and other factors promising to transform risk assessment and pricing. Rather than focusing on conventional topics such as artificial intelligence and client trends, we aim to explore three somewhat unconventional trends that we believe warrant attention in 2024.
An issue of trust Ernst & Young emphasises that restoring trust in the industry is pivotal for long-term success. Strong indications suggest that trust serves as a cornerstone for strengthening relationships with clients, partners, and stakeholders.
We realise that trust comes in various forms and disguises, but at Auto & General, we regard commitment as a key driver of trust. We believe that our commitment to the pay-out of 100% of valid claims is a trust non-negotiable and a hallmark of a top insurance brand.
As financial advisers, it is important to understand which trust drivers your clients consider most important.
Becoming sustainability ambassadors Deloitte asserts that merely reacting to climate change and cybercrime incidents may fall short. Consequently, both insurers and financial advisers should initiate transformation efforts to proactively prevent losses. These efforts encompass technology adoption and enhanced data accessibility to pre-empt potential catastrophes. From a financial adviser's perspective, this approach should involve effective client preparation for possible catastrophes and losses, ensuring their risks are adequately protected, and facilitating their readiness for claims.
This shift reflects a more client-centric approach for both financial advisers and insurers.
Looking at value, not only price
Escalating insurance premiums have reverberated through the general economy, attributed to factors such as elevated reinsurance rates, increased expenses impacting vehicle and home repair costs, and a surge in claims due to climate change and cybercrime. In this context, clients may be tempted to consider self-insuring and even cancelling their insurance.
For financial advisers and their clients, the focus should shift to assessing value and building lasting relationships, rather than solely considering price. Recognising the value brought by an ecosystem of partners, including approved panel beaters, plumbers, and preferred installers, is crucial. Additionally, acknowledging the value derived from adviser tools, digitisation, proactive retention tactics, valid claims settlement, and personalised support contributes to a more comprehensive perspective.
In 2024, while emphasising client-centricity, it is equally imperative to seek value and align with insurance partners committed to protecting clients' risks and fostering your own business’ growth.