Trending now Spring 2020

What's trending in insurance | Spring 2020

Rural America, automation, agriculture, and commoditization are affecting the insurance landscape.

 

Data and automation trends Agricultural trends Rural America trends Commoditization trends 

 

Data and automation

Carriers are responding to changing buying relationships with technology and data, hoping to increase customer loyalty. Automation and artificial intelligence (AI) continue to change the insurance industry, and are being used to identify new markets, products, and prospects and to forecast claims and settle them more quickly.

By the numbers

Customers want a payoff. Eighty percent of insurance consumers are willing to share their data, according to an Accenture report. But according to the report, insurance customers expect something in return, such as lower prices, quicker claims processing, or personalized offers and alerts.

Insurers rely on technology. Sixty percent of insurers use technology to build products or services that improve customer engagement, according to Accenture.

Implications

Internet-connected devices and sensors can provide insurers data to better price and underwrite risks in homes and on farms.

Devices and sensors can also make it possible to trigger a first notice of loss automatically, providing accurate data about the time, cause, and severity of the loss, leading to faster claims processing and resolution.

Back to top

 

Agriculture

The definition of “farm” is changing, and that can affect business. The united states department of agriculture’s economic research service tracks trends in farming and agriculture. Here are some notable data points from their most recent report.

By the numbers

The United States is losing farms. There are more than 2 million farms, down 7 percent from a decade earlier.

Large farms get larger. Large farms (2,000 acres or more) account for only 4 percent of all farms but manage 58 percent of farmland. Seventy percent of farms manage fewer than 180 acres, and combined they manage less than 10 percent of all U.S. farmland.

Farmers evolve and experiment. Some conventional crop farmers have invested in precision agriculture practices and autonomous farm equipment. Other farmers have pursued organic certification. The number of certified organic operations in the U.S. doubled from 2006 to 2016.

Implications

Farm consolidation may increase competition among insurance companies.

Increases in farm size may make insuring them a bigger risk.

Precision agricultural practices could generate data, which could help carriers better understand and price risks on the farms they insure.

Back to top

 

Rural America

Is rural America dying or thriving? It’s likely you can find stories in your community that confirm both of these simple narratives. The fact is, rural America is far more complex.

By the numbers

Rural America is large and lightly populated. According to the 2010 Census, 19 percent of Americans (59.5 million people) were rural. And more than 95 percent of land was classified as rural.

Some rural counties are contracting. In rural counties, immigration and births account for population growth — but since 2000, 1,024 rural counties have experienced negative population growth according to data from the Pew Research Center.

Rural counties are different. On average, according to Pew, 79 percent of the population of rural counties are non-Hispanic white, higher than urban (44 percent) and suburban counties (68 percent).

Implications

If the rural population continues to experience below-average growth, carriers and agents could have fewer opportunities to grow.

If U.S. population growth continues its current trajectory, by 2055 there will not be a majority racial or ethnic group in the U.S. Carriers and agents may need to adapt their business models and marketing efforts to reach a more diverse customer base.

Back to top

 

Commoditization

Insurance products are becoming commodities, and direct-to-consumer models are capitalizing on that trend. Direct-to-consumer purchases have been available for auto, home, and renters insurance buyers for years. Now, some companies now offer direct-to-consumer buying for businesses.

By the numbers

Millennials are underinsured. Less than two-thirds of Millennials (born between 1981 and 1996) have homeowners or renters insurance policies, according to Nielsen Scarborough.

Younger buyers don’t just shop online. About 27 percent of Millennials purchase insurance online, according to research by Gallup. But they want low prices, speedy transactions, and ease of use. Overall, 74 percent of insurance buyers purchased with an agent.

Implications

When customers view products as commodities, it changes what they value in their buying decisions. Companies will need to provide — and communicate — value around price, speed, and service to compete for business.

Successful carriers could grow by marketing homeowners and renters insurance products to Millennials, offering products in the way this demographic wants to consume them.

Back to top