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Gary Shaw, vice chairman of Deloitte Consulting shared his thoughts about insurance trends in 2017 with the Wall Street Journal. How are they going to impact your life? Please give me a call @ 412-489-6443 to discuss.

 

A number of underlying conditions could influence the insurance industry in 2017, including:

  • Interest rates Low interest rates have continued to pressure investment income, a condition that will likely persist in the near- to medium-term despite expected rate hikes.
  • Infrastructure spending The new administration’s pledges to boost infrastructure spending, if realized, could positively affect gross domestic product, job creation, and insurable exposures.
  • Technology-Innovations such as cognitive computing, robotic process automation (RPA), and even autonomous vehicles threaten to dramatically shrink the number of insurable workers in affected industries over the next decade. At the same time, automation may help insurers lower their own labor costs while improving efficiency.

Autos- An increase in the frequency and severity of accident claims,in part due to a rise in distracted driving may keep the growth in new vehicle sales and the integration of new safety technology from boosting auto insurer profitability. Insurers face a number of challenges that could undermine their ability to bolster market share, profitability, and innovation. These include the possibility that auto safety technology and ride-sharing could lower frequency and severity of losses and eventually cut premium volume substantially; the question of whether telematic data produces superior underwriting and pricing; and how best to balance the benefits of the internet of things with the cyber risks presented by connected devices.

Homes- A resurgent housing market boosted insurable exposures and premiums written, although this trend may begin to lose momentum as interest rates rise. The emergence of smart homes and the sharing economy may prompt shifts in policy design and demand for coverage in the medium- to long term.

Life Insurance and Annuities- Challenges from regulatory disruption, increasing consumer expectations, and stagnant sales, insurers will likely accelerate technology modernization to drive growth and efficiency.

 

 

 

 

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