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A Look Ahead: Commercial Insurance Outlook 2016

  • By:
  • Alliance Insurance Group
  • |
  • Feb. 29th, 2016

According to consulting firm Ernst and Young, 2016 insurance trends will mostly be driven by changes to technology and consumer expectations. As more and more commerce is conducted online, and the definition of personal vs. business property changes, it will be necessary for insurers to adapt to a changing economy. In their “2016 U.S. property-casualty insurance outlook”, Ernst and Young predicted these general trends:

New technologies raise questions about business vs. personal coverage. An example of this are emergent car and home sharing services (e.g. Uber and Airbnb). These services allow people to rent or use their personal property (like their home or car) for commercial purposes. This has raised questions about whether incidents that occur during use of this personal property, under a commercial premise, are covered by a personal insurance policy or whether a business insurance policy is required. In summary, both insurers and the insured are faced with questions about how these new ventures fit into traditional insurance models. Analysts forecast that there will be a push for innovation to accommodate these new services in 2016.

Changing consumer expectations. Today’s consumers seek a more personalized experience when buying insurance and interacting with their provider. Carriers and brokerages will need to mirror advances made in retail and banking to provide an educational, accessible, and personal online experience in 2016 in order to meet their consumers’ needs.

The power of analytics and telematics. Performing data analyses in real time will be a bigger push for insurers in 2016. With better sources of data, from technologies like telematics devices, better pricing models can be constructed, and new policy innovations can be discovered, which helps both consumers and insurers.

Increased need for cyber risk protection. 2015 saw some high profile data breeches that highlighted the vulnerabilities of even major corporations against hackers. The data breaches proved especially concerning for the healthcare and legal fields, as well as any other fields that handle and store sensitive client information. As more businesses awaken to the reality of cyber risk, and the expensive claims exposes them to, cyber insurance is becoming more widespread. In 2016, analysts predict that insurers will put a further emphasis on cyber insurance policies, as the public awareness of cyber insurance grows.

At Alliance Insurance Group, our goal is to stay ahead of the curve and provide innovative solutions in a changing world. Our insurance specialists are here to provide further insight on business insurance trends, and their impact on your business. Reach out to a member of our team with any questions you may have, or send us a message. Check back to our blog for more timely insurance topics.