Challenges facing global insurance brokers in 2019


May 23, 2019
 

Higher investment income, economic growth and increasing interest rates made 2018 a good year for global insurance. Market growth is predicted to continue into 2019 carried by strong growth in emerging markets like China and Latin America.

report by Technavio estimates compound annual growth will be in the region of 5% for the period 2018-2022, which is good news for global insurance brokers. However, 2019 is also likely to present some challenges through a combination of political, economic and environmental unknowns which may impact the industry:

Political instability is likely to present a particular challenge this year. Known political difficulties like ongoing uncertainty around Britain leaving the EU can be monitored by the industry. More challenging are the unknowns like unexpected terrorist attacks and political unrest.
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?
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 2019 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.

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

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.

As your business grows, sourcing talent with the skills you need to meet the pace of change may become difficult. This is particularly true when it comes to filling technical roles as unemployment rates decrease globally.

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.  

It is important to remember every challenge in 2019 also presents opportunity for global insurance brokers. Those who insure expatriates are particularly likely to benefit. Market research shows 90% of businesses with expatriate assignees are likely to maintain or increase numbers in the next 3 years. As political unrest and natural disasters become less predictable, multinationals may look for increased protection for employees while they are abroad.

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.

If you have questions about international health insurance or want to partner with an expat health insurance provider get in touch.