As 2024 comes to a close, it’s a good time to reflect on what the insurance industry accomplished, what surprised us, and how long-term trends have evolved.
From an industry performance perspective, 2024 was a strong year. Supported by rate hikes and continued (but declining) interest rates, carriers Global insurance premiums increase by 4.6% In 2024, it will exceed the average rate of 1.6% over the past five years. Growth was driven by life insurance, reaching a 10-year high of 5% in 2024, but non-life insurance’s growth slowed to 4.3% as the impact of the hard market faded. Life insurance premiums and non-life insurance premiums accounted for 43% and 57% of total insurance premiums in 2024. Steady economic growth and a resilient labor market continued to support the industry.
The following was observed as a qualitative basis for these financial and operating results:
- AI has had a real economic impact.
Accenture’s global C-suite customers report that 87% of carriers (91% P&C, 82% L&A) have achieved significant financial benefits from using Gen AI. The industry has monetized robust production solutions to power underwriting and claims settlement for some of its books. However, in a world of ever-increasing expectations, impact at “scale” (i.e., moving from impactful individual use cases to impact across functional or value chain areas) is required.
- Insurers responded to increased demand for core capabilities with alternative talent strategies.
Underwriting, long plagued by an aging workforce and outdated processes, will see the introduction of AI and gen AI in 2024, allowing senior underwriters to leverage expertise in higher-value areas such as business development and negotiation. I was able to take advantage of it and found some relief. A typical example is QBE. QBE is expanding its industry-leading AI-powered underwriting solutions replicated across multiple lines of business. By leveraging AI, QBE is now able to process (i.e. capture and extract insights from) 100% of the applications it receives from brokers, resulting in higher quotes with underwriters that focus on the highest-value applications. You can drive contract rates.
Insurers have also implemented strategies to address growing regulatory and capital requirements without increasing headcount by leveraging talent pools outside their organizations and in lower-cost locations. For example, many insurance and reinsurance companies sourced advanced actuarial, loss/CAT modeling, and capital allocation resources from India. Growing actuarial talent pool.
- Optimizing operating models and segment growth was a recurring theme.
Recent cost reduction efforts have led many departmental and business unit leaders to seek greater autonomy and control over costs. In 2024, insurance companies across business lines and geographies will thin out their corporate centers and focus on optimization and optimisation. strategic realignment Rethinking operating models and better leadership focus Customer segments and product segments.
- The changing risk landscape has driven growth strategies and capital reallocation across sectors.
Insurers are recognizing the potential for growth in the healthcare sector and are building their healthcare businesses and exploring opportunities in new health risks. For example, Aviva Insurance Ireland is helping. level health, An insurance business that offers customers low costs with a variety of plans. Meanwhile, the FWD Group is working on the following issues. New health risks emerge among gamers In the Philippines, we offer insurance solutions for gaming-related risks such as vision problems, insomnia, and migraines. Care navigation, telemental health, and telemedicine services also increased, increasing the combined digital health market by 16% to $172 billion.
In 2024, retirement took center stage. Concerns about longevity risk and retirement preparedness have heightened the need for attention and change in 2024. Pension insurance set sales records as investors took advantage of rising interest rates and questioned whether defined contribution plans and public programs can provide adequate retirement income. 4 years in a row. In China, workers covered by the public system of basic pension insurance are: Voluntarily open a private pension accountreducing some of the systemic stress caused by rapid aging. And more Millennials are ready to benefit from huge wealth transfers but are not interested in traditional career paths. Financial Independence, Early Retirement (FIRE) movement.
- A prevention mindset generates service revenue and reduces losses.
Increasingly, insurance companies and their customers are betting on risk reduction and turning to injury and illness prevention. In the United States, 90% of new cars are standard automatic braking. And in 2024, the global advanced driver assistance systems market grew by 17% (Statista). finally genetic Cancer screenings, MRI scans and more are available at discounted prices to John Hancock customers. Partnership with Prenuvoenabling earlier detection and better mitigation of health, disability and mortality risks.
Looking to 2025
As we enter the holiday season, there is reason for optimism. The insurance industry continues to operate from a position of strength.
