The worldwide insurance sector was one of the few to go against the grain and maintain an uptrend during the pandemic. It is expected to maintain robust growth in the coming years, despite a considerable displacement of funds occasioned by the digital transformation.
According to the research data analyzed and published by ComprarAcciones.com, the global insurance industry was worth $6.1 trillion in 2020. It is projected to grow at a 3.5% compound annual growth rate (CAGR) to $7.5 trillion by 2025. However, due to the ongoing digital transformation, up to $280 billion could shift from traditional to tech-enabled and digital insurers.
Convergence of Health, Wealth and Life Insurance to Generate $120 Billion in New Revenue
The acceleration to digital channels is expected to permanently alter the future revenue landscape for insurers. About $140 billion in current insurance revenue could shift to technology-enabled products and services. A further $140 billion is forecast to move to insurers offering digital distribution services. Therefore, to harness industry growth, insurers are expected to embrace the digital shift.
A convergence of the health and wealth industry with life insurance is forecast to generate an additional $120 billion. This will come from smart health products ($60 billion), products for the aging population ($30 billion) and direct life and wealth management products ($30 billion).
An additional $50 billion will come from climate change-related risks. Cybersecurity threat mitigation services will also generate an additional $25 billion.
In order to keep up with the digital transformation, insurance agents and brokers are increasingly investing in digital technologies. A recent insurance digital transformation survey reveals that 39% of agents offer online portals. Around 78% of agents are using Facebook to acquire new clients, while 68% are using LinkedIn. The global insurance agent and broker market will grow at a 3.5% CAGR in 2021, going from $350.4 billion in 2020 to $362.54 billion.
