2024globalinsuranceoutlook

DeloitteCenterforFinancialServices

Insurersevolvingtoaddresschanging

operatingenvironmentandprecipitateeven

greatersocietalimpact

Deloitte。

Tableofcontents

2024globalinsuranceoutlook

03...Insurersaretransformingtoachievecustomer-centricity

andelevatepurpose

05...Non-lifeinsurance:Evolvingtostrengthenrelationships

andprofitability

08...Lifeandannuity(L&A)insurers:Coresystem

modernizationandculturetransformationareunderway

butmoreshouldbedone

11...Groupinsurers:Doublingdownondigitalcapabilities,

connectivity,andancillaryofferings

12...Techtransformation:AIisopeningnewavenuesto

enhanceandpersonalizethecustomerexperience

15...Humancapital:Technologyandculturemodernization

activatefocusonworkforcetransformation

2

Tableofcontents

18...Sustainability,climate,andequity(SC&E):Insurersmay

looktoreformbrandperceptionthroughambassadorship

21...Finance:Accountingandtaxrulechangesshouldspur

wider-rangingoperationalinnovations

23...Mergerandacquisition(M&A)activityslowing,

butinsurersshouldprepareforapotentialuptick

25...Changingperceptionsisthepathtothefuture

26...Endnotes

3

2024globalinsuranceoutlook

Insurersaretransformingto

achievecustomer-centricityand

elevatepurpose

C

hangeisacceleratingallaroundus,possi-blyatafasterpacethaninanyperiodinhistory.Shiftsinclimate,technology,workforce,andcustomer/societalexpec-tationscombinedwithmacroeconomicandgeopoliticalvolatilityarecompelling

enterprisesacrosstheglobetotransformtheirtechinfra-structure,productsandservices,businessmodels,andorganizationalculturetoadaptnotjusttofuelprofit-abilitybuttoremainrelevantandsurvive.Theinsuranceindustryisnoexception.Infact,thesecollidingforcescouldpotentiallybethecatalystthatsparksreinventionbothinhowtheindustryconductsitsbusinessandinitsoverallpurposeandroleinsociety.

Insurershavethepotentialtoachieveevengreatersocialgoodlargelybecausetheyalreadyactassociety’s“finan-cialsafetynet,”providingabackstopagainstfinanciallossforinnumerablerisksworldwide.However,moreinsurersarerealizingtheyhaveabiggerroletoplayinhelpingpreventrisk,mitigatinglossseverity,andclosinglifeandnon-lifeprotectiongapsinglobalmarkets,espe-ciallyinthefaceofthegrowingnumberofwhatappeartobefinanciallyunsupportablerisks.

Existentialthreats,suchascatastrophicclimatechange,theexplosionincybercrime,andconcernovervastuninsuredandunderinsuredpopulations,aredriving

manyinsurerstoreimaginehowtoconfrontdisruptions

causedbythechangingenvironmentandhelpconsum-

ersacrossallsegmentspreventormitigaterisksbefore

theyoccur,ratherthanmerelypayingtorebuildand

recoverafterthefact.Evenwhilethemostextreme

eventsmayappearunavoidable,insurancecombined

withproactiveriskmanagementcanstillhelpminimize

thedegreeoftheirimpactonaffectedindividualsand

communities(figure1).

Toachievethisleveloftransformation,insurancecompa-

niesmayneedtoadoptnewtechnology,includinggener-

ativeAI,toharvestactionableinsightsfromanynew

dataattheindustry’sdisposal.Industryconvergence

foraccesstomoreinformationsources,products,and

services,aswellastalentwiththeskillsetsandknow-

howofemergingcapabilitiesarebecomingtablestakes.

Transformativechangewilllikelyhavetogobeyond

addingnewtechbellsandwhistles.Moreproactive

insurersarealsobeginningtoembraceenterprisewide

culturechangetoreducesilos,elevatetheirtalent,and

achieveamoreubiquitousfocusoncustomer-centricity.

Forglobalinsurers,thismayincluderethinkinghow

capabilitiesaresharedacrossgeographiesandbusiness

linestohelpdriveamoreconsistentandintegrated

customerexperience.

4

Figure1

Insurersneedtoevolvetobe讓erserveindustry,society,andtheplanet

Improvethebotomlinebydecreasingthefrequencyandseverity

ofinsuredeventsandtherebylowerlossratios

Enhancebrandreputationbyenlighteningconsumersand

communitiesthatsupportisyear-round,ratherthanonlyat

thepointofsale,renewal,orwhenaclaimis?led

Upgradetheinsurancevaluepropositionbyplacing

standardrisk-transferpoliciesatthecenterofmuch

broader,moreholisticriskmitigationprograms

Createaccessandinclusionforallunderrepresentedandunprotectedsegments

Buildtrustandcon?denceofconsumersbybeingmoretransparent,responsible,andinvolvedinsocietaland

environmentalissues

Source:Deloiteanalysis.

Leadersshouldmakeanongoingcommitmenttoensurediversity,equity,andinclusion(DEI),bothintheirworkforceandthecustomerdemographicstheyserve.Demonstratingsuchcommitmentcouldhelpclosethetrustgapthathasoftenunderminedtheindustry’scredibilitywithkeystakeholders,includingregulators,legislators,andratingagencies,aswellassocietyatlarge,andeventheirownemployees.Thiscouldnotonlyprovetobeadifferentiatorinthemarket,butalsohelpresolvesocietalissuessuchastheinsuranceprotectiongap.

Earningrecognitionassoundethicalandfinancialstewardsofsocietalwelfarecouldultimatelyempowerinsurancecompaniesandtheirdistributionforcetoshiftawayfromatransactionalroletoadoptabroader,moreholistic,relationship-basedapproachtoconsumerinter-actions.Thistransformationshouldnotonlypromoteinsurers’growthprospectsbutcouldalsofundamentallyelevatetheperceptionoftheindustry’sroleinprotectingandenrichingtheever-evolvingworld.

5

2024globalinsuranceoutlook

Non-lifeinsurance:Evolvingto

strengthenrelationshipsand

profitability

F

orthethirdstraightyear,thenon-lifeinsur-ancesectorisboostingtop-linegrowthwithhigher-than-averagepriceincreasesacrossnearlyalllinesofbusiness—yetrisinglosscostsaremakingbottom-lineprofitabilityelusiveformanycarriersandtheindustryas

awhole.Theone-twopunchofelevatedinflationandcatastrophiceventscouldhelpfueltransformationinthewaythesectorinteractswithconsumers.

TheUS$26.9billionnetunderwritinglossforUSnon-lifeinsurersin2022wasthebiggestsince2011—over

sixtimeshigherthan2021’sfigure.1

The14.1%riseinincurredlossesandlossadjustmentexpensesover-came8.3%growthinearnedpremiumsbyasignifi-cantmargin,drivingnetincomedownbyone-thirdtoUS$41.2billionandpushingthecombinedratiointothe

redat102.7,upfrom99.6in2021.2

ResultsforQ12023weren’tanymoreencouraging.TheUSindustry’sUS$7.34billionconsolidatednetunder-writinglosswasthelargestin12years—aswellasthe

worstQ1figureonrecord.3

Asaconsequence,theUSnon-lifemarketis“facingthe

hardestmarketinageneration”4

asinsurersstruggletoraisepricesfastenoughtocoverrecordgrowthinexpenses.Thepriceofsingle-familyresidentialhomeconstructionmaterialssoared33.9%sincethestartofthepandemicwhilecontractorservicesareup27%

.5

Meanwhile,2022wastheeighthconsecutiveyearfeatur-ingatleast10UScatastrophes,causingoverUS$1billioninlosses,drivingupproperty-catastrophereinsurancecostsforprimarynon-lifecarriersby30.1%in2023,whichwasdoubletheprioryear’shikeof14.8%

.6

Reinsurancerateswilllikelyremainelevatedasreinsur-

ers’retainedearningshavebeeninsufficienttobeartheir

costofcapital,letalonebuildstrongerbalancesheetsto

catertoanincreasingrisklandscape.7

USdemandfor

catastrophereinsurancealoneisexpectedtogrowas

muchas15%by2024,puttingfurtherupwardpressure

onprices.8

Risinginsurancerateshavereverberatedthroughout

thegeneraleconomy.Commercialpropertypremiums

rosebyanaverageof20.4%—thefirsttimethatrates

rosegreaterthan20%since2001.9

Whileinflationhas

beeneasingsomewhatin2023,commercialinsurance

rateshavecontinuedtoincrease,althoughatmoderating

levelsexceptfor“outliers”suchaspropertycoverage.10

Averagepriceincreasesforcyberinsurance,forexam-

ple,weredownto13.3%11—asmallimprovementfor

buyersoverthe15%riseinQ42022,andover20%in

Q12022.12

Risingexpensesarealsoimpactingpersonallinesinsur-

ers.Autocarrierssawmotorvehiclerepaircostsgoup

by20.2%inApril2023comparedtothesameperiodthe

yearbefore,versusa15.5%increaseinpremiums.13

Part

oftheproblemisthatwhiletheassisteddrivingtechnolo-

giesinnewvehiclesshouldimprovesafetywhilelowering

thefrequencyandseverityofaccidentlossesinthelong

run,theaddedcomplexityofthesesystemsandcalibra-

tionoftheirsensorscoupledwiththeimpactofinflation

canraiserepaircostsconsiderably.14

Thesametrendis

evidentwiththeriseinsalesofelectricvehicles,whichare

alsomoreexpensivetorepairthantheirgas-drivencoun-

terparts.15

Meanwhile,claimsforthetheftofcatalytic

converters—whichneutralizeenvironmentallyharmful

gasesinengineexhaustbutalsoattractthievesseeking

6

theirvaluablemetalliccomponents—explodedfrom

16,600in2020to64,701in2022.16

Risinginsurancecostsareaffectingconsumersentimentandbehavior,with45%ofthosesurveyedbetweenages18and34sayingthey’vethoughtaboutgoingwithoutautoinsuranceasaresult—including17%ofrespon-

dentswhosaytheyarealreadydrivinguninsured.17

Ataminimum,autoinsuranceshoppingandswitchingrates

havereachednewhighs,18

raisingacquisitionandreten-

tioncosts.19

Homeowners’insurersarealsohandingdowndouble-digitpremiumhikestocoversimilarrepairandreplace-mentcostchallenges,aswellasincreasingfrequencyandseverityofweather-relateddisasterlosses,suchasthose

causedbywildfires,windstorms,andfloods.20

Anumberofinsurersareeitherscalingbackfromormovingout

ofcatastrophe-pronestates.21

Lookingahead,whilefurthermaterialrateincreasesinmostjurisdictionsshouldsupportstrongpremiumgrowthin2023,uncertaintyrelatedtocatastropheexpe-rienceandclaimsseveritypatternsmayinhibitanear-

termreturntoanunderwritingprofit.22

UShomeowners’insurersareexpectedtopostastatutoryunderwritinglossthisyear,withacombinedratioof105,whichwouldbetheline’ssixthunprofitable100-plusratiointhepast

sevenyears.23

Onaglobalbasis,non-lifepremiumsincreased0.5%inrealtermsyearoveryearin2022,farbelowthe10-year

averageof3.6%.24

However,premiumsareforecasttoimproveinboth2023and2024to1.4%and1.8%yearoveryear,respectively,mostlyduetoratehardeningin

personalandsomecommerciallines(figure2).25

Non-lifeinsurerprofitabilityisexpectedtoimprovethrough2024ashigherinterestratesstrengtheninvestmentreturns,premiumratehardeningcontinues,andexpectationsfor

slowinginflationlowersclaimsseverity.26

Figure2

The2023–24forecastfornon-lifeinsurancepredictshighergrowthinemergingmarketscomparedtoadvancedmarkets

Globalnon-lifeinsurancepremiumgrowthratesinrealterms

2023F

2024F

World

1.4%

1.8%

NorthAmerica

0.7%

0.8%

AdvancedEurope,MiddleEast,andAfrica

0.9%

2.1%

AdvancedAsia

1.5%

2.4%

EmergingAsia(excludingChina)

5.8%

6.7%

China

6.8%

5.8%

Source:SwissReInstitute,“Sigma:Worldinsurance:Stirred,andnotshaken,”July10,2023.

7

2024globalinsuranceoutlook

Eveninthisenvironment,whererisksareincreasinglybecomingfinanciallyunsupportable,theremaybeoppor-tunitiesavailableforproactivenon-lifeinsurerstogener-atelong-termprofitablegrowth.Insurersshouldconsidergoingbeyondtheirtraditionalrisk-transfermodelsandinsteadbecomemoreofaprotectorofindividualpoli-cyholders,businesses,andsocietyatlarge.

Oneareawheretheindustrycouldfacesignificantdisruptionistheopportunityandpotentialthreatposedbythegrowthinembeddedinsurance.Theconceptisnotnew,butwhat’schangingrapidlyisthevolumeofinsurancepremiumsformajorlineslikelytobebuiltintoothertypesofthird-partytransactions,bypassingtraditionalsellers,suchasinsuranceagents,upendingdirect-to-consumersalesfrominsurers,orevenexcluding

legacycarriersaltogether.27

Grosspremiumsarefore-casttogrowbyasmuchassixtimes,toUS$722billionby2030,withChinaandNorthAmericaexpectedto

accountforaroundtwo-thirdsoftheglobalmarket.28

Autoinsurersarelikelytoconfrontthebiggestchallengewiththemovetoembeddedcoverage.Thesecarriersshould,therefore,consideractivelyseekingalliancesbeforetheyfindthemselveswithoutanembeddedpartner,orfigureouthowtheyaregoingtocompeteagainstthose

whodojoinforceswithaproductorserviceprovider.29

Thisconvergencecannotonlybenefitconsumersbywayofbuilt-inloss-avoidanceanddetectioncapabilities,butcanalsohelpcarriersplayacentralroleincreatingstrongerclientrelationships.

Theuseofparametricinsuranceisalsoexpanding,whereclaimtriggersandautomaticpaymentsarebasedonan

indexorspecificwidespreadeventratherthanaparticu-

larloss.30

Inadditiontomorecoveragebeingofferedfor

naturaldisasterlosses,newareascoveredbyparametric

policiesincludecyberexposuresandoperationaldown-

timesduetocloudoutages.31

Underservedcommunities

mightalsobenefitfromparametriccatastrophecoverage

purchasedonagroupbasisforaparticularneighbor-

hoodratherthanbyindividualconsumers.32

Forexam-

ple,inearly2023,AcoupleofFiji-basedinsurerspaid

outUS$50kto559smallholderfarmers,fishermen,and

marketvendorsinresponsetocyclones.33

Theever-expandinguseofAI—notjustbyinsurersbutalsobytheircustomers—presentsitsownemerg-ingcoveragechallengesandopportunities.MunichRe,forexample,haslaunchedapolicytocoverthoseimplementingself-developedAIprogramsintheirowncompanies,mitigatingpotentialfinanciallossesfromAI

underperformance.34

InsurerscanalsoconsiderusingAItohelpclientsreduceormitigaterisks.

Moreinsurersarealsoexpandingtheirpolicyportfolio

tocoverrenewableenergyprojects,35

includingHiscox,whichplanstolaunchanESG-focusedsyndicateatLloyd’stohelpcapitalizeonincreasinginterestandinvestmentingreentechnologies.

36

Suchsustainabil-ity-focusedeffortscouldgoalongwayinhelpingtoenhancetheindustry’sbrand.

Apersistenthardcycle,InsurTechinnovationthatimprovesunderwritingdataandcapabilities,andrisingfrequencyandseverityofcatastrophesarejustafewofthefactorscontributingtogrowthinthespecialtyinsurancemarket—withprojectedmarket-sizeincreasesfromUS$81.5billionin2022toanestimatedUS$130.1

billionin202737

atacompoundannualgrowthrateofmorethan9.6%.Europewasthelargestregioninthe

specialtyinsurancemarketin2022.38

Onewayortheother,innovationinbothoperationsandproducts,aswellasembracingstrategiestodrivemorefrequentclienttouchpointsandgoodwillcouldbeimportantcomponentsdrivingnon-lifeinsurergrowthandprofitability.

8

Lifeandannuity(L&A)insurers:Coresystemmodernization

andculturetransformationare

underwaybutmoreshouldbedone

D

uetostronggrowthinQ12022,USlifeinsurancepremiumstotaledUS$15.3billionfortheyear,aboutequaltotherecord-highpremiumsin2021

.39

Despitemorethan100millionUSadultslivingwithacoveragegap,salesslowedinthe

secondhalfoftheyearduetoconsumerconcernsoverinflationandtheeconomy,evenasworriesoverCOVID-

19declined.40

Globally,theL&Asector’s2023–2024premiumgrowthdriversareprojectedtofueladivergencebetween

advancedandemergingmarkets(figure3).41

TheimpactofinflationondiscretionaryconsumerspendingwilllikelypressureindividuallifeinsurancesalesintheUnitedStatesandEurope,whileregulatoryheadwindsmayweighonadvancedAsia.

42

Conversely,thegrowingmiddleclasswithrisingaggregatenominalincomescouldpowerthesavingsandprotectionbusinessinemerging

markets.43

Acrossmostregions,lifeinsurancegrowthisexpectedtobeledbyrisingdemandforprotectionproductsbyyounger,digital-savvyconsumerswhoappeartobeincreasinglyawareofthebenefitsofterm

lifeproducts.44

Ontheannuityfront,USsaleshitarecordhighinQ12023yearoveryear,despitea30%declineinvariableannuity(VA)transactions,asfixedratedeferredandfixed-indexedannuitiesincreased47%and42%,respec-tively,primarilyduetohigherinterestrates.

45

Moreover,second-quarterindividualannuitysalesincreased12%yearoveryear,surpassinglastyear’srecorddespitean

18%dropinVAsales.46

WeakenedfinancialmarketsandeconomicindicatorsareexpectedtokeeppressuringVAsbutwilllikelycontinuetobenefitsalesofannuitiesthatprovidemorepredictableoutcomes.

47

Tobetteraddressthebusinessinstabilityoftendrivenbyeconomic,environmental,andsocietaltransitions,manyL&Acarriersareproactivelyrepositioningformoresustainedandpredictablegrowth.Indeed,2024ispoisedtobeatippingpointforthesectorastheworldbecomesincreasinglydigitizedandcustomerandagentexpecta-tionsformorerelevantandholisticproductofferingsandeaseofdoingbusinesscontinuetoescalate.Carriersarenowconsideringwhatshouldbetransformedtomeetthesedemandsaswellasprovidegreatercushionfromexternalmarketpressures.

Thisshiftmaybechallenging,asmanycarrierscontinuetostrugglewithnetworksoflegacysystemsandsiloedlinesofbusiness,products,processes,andculture.However,theseobstaclesarenotexpectedtobeinsurmountable.

Likenon-lifecarriers,cutting-edgetechnology,includingdigitaltoolsandadvancedanalytics,couldhelpempowerlifeinsurersandtheiragentstoshiftawayfromatransac-tionalroletobroaderrelationship-basedconsumerinter-actions.Modernizingsystemscanpotentiallyfacilitate

theuseofalternativedatasourcesforfasterapplicationunderwritingandprocessing,moreseamlesscross-sellingandcustomerpersonalizationandeaseofengagement,aswellasrapidnew-productlaunches.

Itcouldalsoenablebetterconnectivityandcollaborationwithindustryandnonindustrypartnersacrossthevaluechain,bothtoenhancecustomerexperienceanddrivemoresourcesofprofitablegrowth.Suchcollaborationscouldincludeservicesforleadgeneration,aswellasancillaryproductstoprovideholisticcoverage(wellness,wealth,health,etc.)capabilities.Forexample,inAsia-Pacific,insurersareinvestingintechnologyplatforms

9

2024globalinsuranceoutlook

andecosystempartnerstoimprovethecustomerexpe-

rienceforhealthandbenefitsofferings.AIAlaunchedanintegratedhealthstrategyacrossAsia,tosimplifycustomerjourneyspoweredbytechnologysolutions,analytics,andacohesiveecosystemofpayers,providers

andpartners.48

InSingapore,Manulifeworkedwitha

largeSingaporeanbanktoprovidelow-cost,customiz-

ableprotectionproductsacrosslife,health,andwealth

toyoungSingaporeans.49

However,modernizingsystemsisnotwithoutitschal-

lenges.Althoughmostrespondentstoarecent

Deloitte

survey

of100USL&Achiefinformationofficersor

theirequivalentssaidtheyhavebeguntheircoresystemmodernizationjourney,fewerthanone-thirdhave

completedsome(20%)orall(12%)oftheirinitiatives.50

Justovertwo-thirdshaveprojectscurrentlyunderway

orintheplanningstage.51

Figure3

The2023–24growthforecastforlifeinsuranceisdiferentforadvancedand

emergingmarkets

Globallifeinsurancepremiumgrowthratesinrealterms

2023F

2024F

World

0.7%

1.5%

NorthAmerica

-0.2%

-1.3%

AdvancedEurope,MiddleEast,andAfrica

-0.8%

1.2%

AdvancedAsia

-0.1%

1.6%

EmergingAsia(excludingChina)

6.9%

6.7%

China

4.0%

4.7%

Source:SwissReInstitute,“Sigma:Worldinsurance:Stirred,andnotshaken,”July10,2023.

10

Moreover,inthelastfiveyears,thepercentageofL&Acarriersintendingtoupgradeorenhanceratherthanreplacetheirexistinglegacycoresystemshasdoubled

from36%52

in2017to73%in2022.53

Whilethereseemstobeagreementthateliminatinglegacysystemsmaybetooonerousandcostlytoundertake,carrierscanexploreavarietyofalternativecore-systemenhancementstrat-egiestoachievetheirgoals.

Forexample,mostofthosesurveyed(89%)intendtoemployInsurTechsasaprimarysolutionforoneormore

pointsintheL&Avaluechain.54

LincolnFinancialGroupworkedwithModernLifetomeetanincreaseddemandformoredigitizationintheinsurancebuyingexperi-ence.

55

MunichRe

workedwithPaperlessSolutionsGroup(PSG)toofferacombinedriskassessmentande-applicationproductthatallowslifeinsurancecarrierstounderwritenewpoliciesfasterandmoreaccurately

.56

Mostrespondentsalsosaytheywillusecloudcapabil-

itiesfornewsolutionsrelatedtocoremodernization.Thissolutioncanenablebusinesscontinuityandpoten-

tiallyofferseasierscalability,greateragility,lowerIToperatingcosts,andincreasedsecurity.Socotraisoneexampleofacloud-nativecoreplatformthatenables

insurerstomorerapidlydevelopanddeploynewlife

insuranceproducts.57

Addingtechnologycapabilitiescanalsopotentiallyleadtoincreasedopportunitiestoconnectmoreeffectivelyandefficientlywithenormousunderpenetratedgloballifeinsurancemarkets.TheSRImortalityresilienceindexindicatesthatmorethan50%oftheworld’sfinancialneedsremainunprotectedintheeventofthedeathofthe

financialheadofthehousehold58

andemergingecono-

miesaccountformostofthatgap.59

Onekeystrategyto

increasingpenetrationinunderservedmarketsmaybeadoptingdigitalcapabilitiestomoreeffectivelyenablepartnerships.CatalystFund’sportfoliocompanyTuraco

wasabletoreachover70,000gig-economywork-

ersinKenyaandUgandabyofferinglifeandhealth

insurancecoveragethroughpartnershipswithdigital

ride-hailingplatforms.60

WhileDeloitte’ssurveyfoundsystemsenhancementsarealreadyunderwayorintheplanningstageformany

L&Acarriers,61

theresultsmaybeunderwhelmingorunsuccessfulwithoutcorrespondingculturetransfor-mation.Forexample,76%ofcarrierssurveyedwantto

enablebetterintegrationbetweenITandbusinessunits.62

Tohelpachievemorecohesion,theyshouldconsiderdevelopingavalue-streamorientationthatcouldmoreseamlesslyenableend-to-enddeliveryofbusinessinitia-tives.Thisoperatingmodelcouldrequireashifttodecentralization—creatingcross-functionalteamstohelpminimizefrictionpointsbetweenbusinessunitsandfunctionslookingtoachieveaspecificbusinessgoal.Suchaparadigmcanhelpalignbusinesscapabilities,relevantsystems,andinformationflowtopotentiallyalterlong-standingcompanyculturebybreakingdownthebarriersposedbysiloedthinkingandfosteringmorecustomer-orientedfocus.

FromanM&Alens,privateequity(PE)firmswilllikelycontinuetolooktotheL&Asectordespitetherecentdeclineinactivity—largelyduetofewerentitiestotargetasinterestratessurge.Privatecapitalisplayinganincreas-ingroleintheinsurancemarketasPEfirmsseekaccesstoinsurers’hugeassetpools,andinsurerstapintoPEassetmanagementskillstohelpboostreturns.

63

11

2024globalinsuranceoutlook

Groupinsurers:Doublingdownon

digitalcapabilities,connectivity,andancillaryofferings

USemployeebenefitbuyinghabitscontinuetobeimpactedbythepandemic,particularlyregardingenrollmentdecisionsforproductssuchaslifeinsur-

anceandsupplementalhealthproducts.64

Infact,in2022,newpremiumsforcoverageforaccident,criti-calillness,cancercare,andhospitalindemnityjumped

12%toUS$2.9billionyearoveryear.65

Newworkplace

lifeinsurancepremiumsfell1%from2021toUS$3.9billion—althoughthisislikelybecauseitwascompared

tothe14%increasein2021,whichwasoneofthelarg-

estgainsin30years.66

Asthepandemic’simpactbeginstofade,Deloitteexpectsthattheanticipatedoverallmarketgrowthrateforgroupinsurersoverthenextfewyearswilllikelytrendmostlyinlinewiththedirectionoftheeconomy,employment,andwages.

Providersthatwanttogrowinexcessoftheoverallmarketmaybechallengedtoexpandproductportfolios,includingvoluntaryofferingsthatcanpotentiallyaddpremiumandgeneratehighermargins.Forty-fivepercentofemployeessurveyedagreetheyareextremelylikelyorlikelytoparticipateinmorevoluntarybenefitsofferedthroughtheiremployer(e.g.,criticalillness,accident,disability,hospitalindemnity,supplementallife,etc.)in

2023,upfrom38%inNovember2021.67

Moreover,asawarenessoflong-termcarecostsgrow,consumersarelookingtotheiremployeebenefitsfor

coverage.68

Theadditionalawarenessoflong-termcare

hasinpartbeendrivenbytheWashingtonCaresFund,whichmandateslong-termcareinsuranceforallemploy-eesinthestateofWashingtonasofJuly2026,supported

byemployee-paidpremiums.69

Thiscoverageprovides

accesstoatotalbalanceofuptoUS$36,500(adjusted

annuallyforinflation)foreligibleconsumers.70

Similar

initiativeshavebeenadvancedinaboutadozenstates.71

Agrowingnumberofemployersarealsoofferingtheir

workershybridsolutionsthatbundlelifeinsurancewith

long-termcareasavoluntaryoremployee-paidbenefit,

andmorethanahandfulofcarriersareactiveinthe

segment,includingAllstateandChubb.72

Groupinsurersarealsoseekingavenuestoincreaseclientengagementandaddvaluetodifferentiatetheirbrand.Onetrend—likelyexacerbatedbythepandemicandthe“greatresignation”—isincreasedconsumerdemandforemployeebenefitsfocusedonfinancialhealthandwell-being.Providersandbrokerscancons