Challenges facing global insurance brokers in 2022

19 July 2022

Very few people anticipated a global pandemic occurring, never mind the resulting human tragedy and economic turmoil the world has faced in the last two years. No industry has been immune to its impact but some have certainly been more affected than others. The global insurance industry faced slowed premium growth, falling profits and strong competition from the insurtech industry across 2020.

Fortunately, 2021 brought better news as government support programmes prevented a deep depression with data indicating growth and profits were rebounding. The Allianz Global Insurance report found international premiums grew by more than 5% in 2021 and the outlook was positive for 2022.

Now we are halfway through the year, how is the year panning out for the global insurance industry and brokers that are operating within it?

Despite the pandemic, industry growth is predicted to continue to 2025 at a compound rate of 6% per year, buoyed by strong growth in emerging markets like China and Latin America. There has also been a value shift towards intermediaries in the last decade as public and private investors realise their power in the insurance value chain.

However, 2022 is already presenting some challenges including a combination of political, economic and environmental unknowns which may impact the industry:

  2. 1.       Political instability
  3. The invasion of Ukraine by Russian armed forces has brought unexpected political and supply chain instability.  It is likely to present a particular challenge this year across a broad range of industries.
  5. 2.       Economic instability
  6. Both the fallout from the Covid-19 pandemic and global sanctions on Russia are causing economic instability across the world. Supply chain issues and energy insecurity will combine to cause additional risk for the insurance industry. Particularly as we move into the winter months in the northern hemisphere.
  8. 3.       Cyber risk
  9. It is estimated that cybercrime costs the global economy about $600 billion per year. Globally regulators are rushing to put cyber risk management standards in place. An area of potential exposure to insurance providers is the outsourcing of core functions. Although your business may be secure, can the same be said of third parties you may rely on for some functions?
  11. 4.       Increased customer expectation
  12. Millennials are now the largest living generation globally. They expect convenience, on-demand information and an always-on service from the insurance companies they choose. This will be a challenge for brokers who have not adapted to meet these expectations. In 2022 consumers expect to access policy information, make claims and interact with their insurer on the move. Insurance companies meeting this need with international health insurance apps and mobile first websites are more likely to see success.
  14. 5.       Rising Healthcare Costs
  15. If your brokerage offers international health insurance, rising healthcare costs may present a difficulty this year. There are many reasons why we are seeing these increases including:
  • Informed consumers demanding better quality healthcare
  • Aging and growing populations that require healthcare services more frequently
  • Higher prevalence of chronic conditions like heart disease, cancer and arthritis
  • Advancements in medical technology impacting the cost of provision
  1. Ultimately these additional costs are going to impact the levels of premiums. However, they also make consumers less likely to risk working abroad without expat health insurance.
  3. 6.       Talent acquisition
  4. Global skills shortages are likely to impact global insurance brokers as businesses around the world battle for the best talent in 2022. This is particularly true when it comes to filling technical roles as unemployment rates decrease globally.
  6. The automation of manual tasks is also impacting roles within global insurance brokerage firms. Tasks that were once resource heavy can now be completed by a piece of software more efficiently. This may leave firms with employees who do not have the skill sets required in the industry. 
  8. It is important to remember every challenge in 2022 also presents opportunity for global insurance brokers. Those who insure expatriates are particularly likely to benefit. As political unrest and natural disasters become less predictable, multinationals may look for increased protection for employees while they are abroad.

  9. Intermediaries can play a critical role in educating consumers about their vulnerability while working abroad. You can also provide consumers with simplified information on complex insurance products like expat health insurance.
  11. If you have questions about international health insurance or want to partner with an expat health insurance provider get in touch today.