U.S Insurance Brokerage Market - Forecast(2024 - 2030)

U.S Insurance Brokerage Market Overview

The market for U.S  insurance brokerage is forecast to reach $ 134.5 billion by 2027, growing at a CAGR of 5.3% from 2022 to 2027. The market growth is attributed to factors including an increase in demand for insurance policies, integration of IT and analytics solutions, as well as the provision of professional solutions and services, expansion of the commercial property and casualty insurance brokerage segment and others. Insurance brokerage is a type of service provided by an insurance broker/insurers in the field of insurance and risk management. It offers various types of insurance services such as travel insurance, life and accident insurance health and private medical insurance, commercial general liability property and casualty insurance, and more, to policyholders in search of the insurance policies as per their requirements. The report covers insurance brokerage service provider companies in the U.S. for better understanding of the market. In 2022, Willis Towers Watson (WTW) launched an upgrade to its Radar program. Radar 4.14 now includes a fully integrated Python capability, allowing insurers to benefit from both Radar's superior pricing skills and the power of the Python open-source software for intelligent automation, all inside a secure environment. Moreover, when the COVID-19 pandemic hit the US in early 2020, total U.S. individual annuity sales fell by US$23 billion in 2020, or 9.5%, after growing 3.4% in 2019, which in turn affected the insurance market. The gradual growth in insurance services will surge the demand for direct insurance broker market and raise the market growth in the US.

Report Coverage

The report: “U.S Insurance Brokerage Market– Forecast (2022-2027)”, by IndustryARC covers an in-depth analysis of the following segments of the U.S Insurance Brokerage Market Report.

Key Takeaways

• U.S  Insurance Brokerage Market is highly fragmented. U.S Insurance Brokerage Market is witnessing a significant growth owing to the increasing integration of AI in the insurance sector.
• Through this technological advancement, brokers will be able to resolve complicated obstacles, produce innovative products and services, and join or build new markets. In addition to this, AI in the insurance industry will improve customer service and prevent customers from fraud, thus this key trend is gaining popularity in the insurance brokerage market.
• The U.S. Insurance Brokerage Market is set to witness a growth of CAGR 5.3% during 2022-2027 owing to technological advancement combined with deep industry knowledge, to provide a breadth of services to life, property and casualty, reinsurers and insurance broker clients.

U.S Insurance Brokerage Market Segment Analysis - By Brokerage Type

A direct insurance broker is an independent entity that partners with multiple insurance companies to sell their products and has access to a wide range of products, coverage, and prices. Direct Brokers dominate the market with revenue of $61.7 Billion in 2021. Clients profit from the competitors' expert solutions and services as a result of their rivalry. During the projection period, the adoption of technology in existing goods and service lines, as well as government efforts surrounding insurance policies, are likely to generate profitable opportunities for the insurance brokerage market. The most significant unfavorable issues affecting this industry are client direct purchases of insurance plans and the widespread availability of alternative platforms for acquiring insurance policies. In Dec 2021, Coalition, a managing general insurance agency and cyber security firm, has established a captive insurer to begin taking on risk on its cyber insurance programs. Coalition, established in California, uses a technology-driven approach to risk management, which it claims has resulted in 70% fewer cyber claims for policyholders when compared to other carriers in the market. Coalition has over 130,000 customers. In 2021, Sequel, a Verisk company, has introduced its latest effort, Sequel Hub, which is characterized as a modular solution aimed to streamline the distribution of insurance policies and delegated authority business. Sequel Hub orchestrates seamless messaging between brokers, carriers, delegated authorities, and market systems, allowing intermediaries to place submissions, receive quotes, and access capacity from different carriers via a single system.

U.S Insurance Brokerage Market Segment Analysis – By Insurance

U.S Insurance Brokerage Market Drivers

Rising Third Party Insurance Policy Demand

The growing population of baby boomers and millennials creates new opportunities for medical insurance, life insurance, and other types of insurance. Customers' demand for insurance goods has increased as a result of the supply of security services and tailored financial services. The supply of security services and personalised financial services to customers has raised the need for insurance products. In the worldwide insurance brokerage business, there is a significant demand for accidental insurance, life insurance, medical insurance, auto insurance, liability insurance, and property insurance. During the projection period, increased knowledge of the benefits of insurance policies would drive demand for such plans. Positive economic trends are predicted to improve the industry's performance as the economy returns to stable growth following the COVID-19 (coronavirus) pandemic. Rising per capita disposable income is predicted to allow consumers to make big durable goods purchases, such as new cars, in addition to house purchases, raising demand for property and casualty (P&C) insurance. Similarly, rising disposable income will make paying insurance premiums more reasonable for consumers, particularly if premiums continue to rise early in the forecast period. As more people buy insurance, the demand for insurance brokers grows, propelling the market even further. Individuals are now seeking for ways to better understand their coverage, save money, and reduce risks. Meanwhile, insurers have been scrambling to change their operations, build digital channels, and meet the expectations of their customers. the greatest levels of consumer search traffic for life insurance ever recorded Volumes are 25 to 50 percent higher in the first few months of 2021 than in recent years. Conversion rates are also high. Term life insurance has seen the highest increase, although this trend has spread to other product lines. Disability insurance is becoming increasingly important. On the property and casualty side, demand in homeowners insurance has reached unprecedented levels.

Government initiatives to cover all citizens under insurance coverage is set to bring create significant growth opportunities for U.S insurance brokerage market

The rising government funding towards different insurance schemes in U.S. is set to bring huge growth for U.S insurance brokerage market. The U.S. health system is a combination of public and private, for-profit and nonprofit insurers and health care providers. The federal government provides funding for the national Medicare program for adults aged 65 and older and some people with disabilities as well as for various programs for veterans and low-income people, including Medicaid and the Children’s Health Insurance Program. States manage and pay for aspects of local coverage and the safety net. Private insurance, the dominant form of coverage, is provided primarily by employers. Public and private insurers set their own benefit packages and cost-sharing structures, within federal and state regulations. During the year 2019, 89% of the non-institutionalized population had health insurance coverage. Separately, approximately 12 million military personnel (considered part of the "institutional" population) received coverage through the Veteran's Administration and Military Health System. In March 2022, as per the U.S. government, more than 14.5 million Americans signed up for Obamacare health insurance for 2022, a 21% jump over last year and the highest since the Affordable Care Act was signed 12 years ago. About 10.3 million people enrolled from the 33 U.S. states that use the online marketplace funded by the federal government 

U.S Insurance Brokerage Market Challenges

Consumers’ Direct Purchasing of Insurance Policies

The increased use of the Internet and cell phones around the world has contributed to direct sales of insurance products. The introduction of online platforms has resulted in increased product awareness, increased customer expectations, and altered purchasing behaviors. For certain insurance products, consumers seek direct assistance from insurance companies. This reduces the need for insurance brokers or intermediaries, which is projected to limit the global insurance brokerage market's growth. To mitigate the impact of direct purchases and create better customer experiences, insurance brokerage firms have turned to online distribution tactics. Before arranging an appointment with broker, 69 percent of insurance consumers conduct a search, and more than half of insurance searches are conducted on mobile devices. The proportion of consumers who chose internet/online sales increased from 17% in 2011 to 29% by 2020. This rise reflects the COVID-19 outbreak, which has reduced the appeal of in-person sales. Modern consumers expect to be able to buy almost anything online, directly from the manufacturer. It's the direct-to-consumer sales trend, and it's having an influence on the insurance business just as it is on retailers. The insurance sector begins to transition to a customer-centric model that focuses on the customer experience. Almost 45 percent of insurers employ customer experience efforts across the client journey and directly push insurance purchase. These include establishing new channels for communicating with clients about policy questions and claims, modifying the wording in papers and communications to use less insurance jargon, and providing hybrid experiences (human and artificial intelligence, physical and virtual, direct and agent-based).

U.S Insurance Brokerage Market Landscape

Product launches, acquisitions, and R&D activities are key strategies adopted by players in the BLE Market. The top 10 U.S Insurance Brokerage companies include:

1. Marsh & McLennan Cos. Inc
2. Willis Towers Watson
3. Aon PLC
4. Truist Insurance Holdings
5. Arthur J Gallagher
6. Brown and Brown Inc
7. USI Insurance
8. Acrisure
9. Hub International
10.  Lockton Companies.

Recent Developments

• In December 2021, Marsh and McLennan completed its acquisition of InSource Insurance Group LLC, headquartered in the U.S. The acquisition aims at improving the company’s security services along with employee health and benefits for some of the major industries in the U.S which include construction, oil and gas, transportation, and manufacturing industries.
• In September 2021, Marsh and McLennan acquired Vaaler Insurance, Inc., a company based in the U.S. that offers business insurance, personal line solutions, and employee health and benefits to the education, construction, and healthcare industries. The main motive of the acquisition was to expand the company’s presence in the Upper Midwest region in the U.S.
• In May 2022, Aon and PayPal Holdings, Inc. launched an initiative for helping small business clients of PayPal in the U.S. to gain easier and faster access to insurance. This initiative specifically aims at addressing common challenges faced by small businesses regarding various aspects of their insurance decisions which include effort, choice, time, and cost.

Relevant Report Titles:

Insurance Brokerage Market - Forecast(2022 - 2027)

Report Code: HCR 0227

Cyber Insurance Market - Forecast(2022 - 2027)

Report Code: ITR 0121

Peer to Peer Insurance Market - Forecast(2022 - 2027)

Report Code: ITR 0120

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