Better pricing, prudent underwriting, rising demand for insurance products and global expansion have been driving revenues of Zacks Insurance Brokerage industry players. The fast-paced consolidations in this traditional fragmented industry are expected to benefit Marsh & McLennan Companies MMC, Aon plc AON, Arthur J. Gallagher & Co. AJG, Willis Tower Watson plc WTW and Hanover Ruck HVRRY.
Increasing adoption of technology and higher spending on technology will help in the smooth functioning of the industry.
About the Industry
The Zacks Brokerage Insurance industry comprises companies that primarily offer insurance and reinsurance products and services. Insurance brokers act on behalf of their clients and offer advice, keeping in mind clients’ interests, against brokerage fees. Thus, their business is directly linked with clients’ level of business activity. Some of these companies are also involved in providing risk management, third-party administration, and managed health care services. Per a report by Allied Market Research, the global insurance brokerage market is projected to grow $395 billion by 2027 or at an eight-year (2020-2027) CAGR of 7.3%. Research Dive estimates industry players combined to generate $515.3 billion in revenues by 2028, rising at an eight-year (2021-2028) CAGR of 5.4%. Increased digitization has been helping in improving performance.
3 Trends Shaping the Future of the Insurance Brokerage Industry
Increased Demand for Products to Drive Revenues: Industry players are continually expanding globally, cross-selling products, increasing rates, tightening underwriting standards, and controlling expenses. Growth in the aging population is driving demand for retirement benefit products, while the rising population of baby boomers and millennials as well as increasing awareness, is boosting demand for medical insurance, life insurance, accidental insurance, and other forms of insurance. The operational results of the industry players are affected directly by clients’ level of business activity, which, in turn, depends on the extent of