In a more connected world, insurers also have an opportunity to minimize risk while generating new sources of revenue. Photo: SomYuZu/Adobe Stock;
Today's insurers are dealing with one of our decade's most challenging economic climates. For the first time in a long time, multiple factors are causing grueling operating environments. Inflation rates and interest rates continue to rise and remain high. This has driven material and operational costs and expenses to increase substantially. A report from Deloitte noted that as of May 2022, average replacement costs were up 16.3%, nearly twice the Consumer Price Index rise.
Skill shortages also continue to plague the industry. According to a recent U.S. Chamber of Commerce report, less than 25% of the insurance industry is under 35 years old, and over the next 15 years, 50% of the current insurance workforce will retire. This is also compounded by new levels of competition for legacy insurance businesses, which with new revenue sources are now competing with an unprecedented number of insurtechs. These insurtechs are fiercely bringing innovation and speed to market.
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