Insurance is a social device for reducing or eradicating risk of loss of property or life. It is a way of sharing the financial losses and converts uncertainties to conviction. Social development and growth in economy in present scenario is due to rapid change in the economic planning and industrial policy. Many MNC’s are now entering to the insurance sector and has become a thriving sector. Some emerging trends in insurance industry are as following:
- Costing Incentives:
Life insurance as well as health insurance companies offer concession for employees who contribute in wellness programs and persons who commit to track through technologies such as Fitbit. In auto insurance, there is growth in discounts for low mileage, safe driving and others. This means, insurance companies will carry on executing diverse technologies for providing more flexible pricing.
- Extended tenure care insurance:
Price for in-force policies have grown and will surely face future increases and older policies still have lower cost than what an existing policy would cost. This is due to various factors which includes the ratio lower than the expected lapse ratio, ratio higher than the expected claim ratios, protracted low interest rate environment and extremely poor initial product designs. These are the noticeable rate increases. If anyone has a care insurance on long term basis with a mutual insurance company then he may not have been informed of lowered divisions means a hidden rate increase.
- Number of unpredicted life insurance policy lapses and premium boosts:
Life insurance companies provide the impact of factor on cash value life insurance policies such as indexed variable, whole life, variable life etc. and this information is hidden.
- Increased in complexity:
Insurance policies will carry on to become more difficult and will continue their movement away from being merely risk protection or influence products to being intricate financial products with a huge number of variables. This happens with the combination products on long term care insurance along with the life insurance.
- Loyalty tax:
Supervisors are looking at banning the practice of homeowners insurance and auto companies increasing premiums for the consumers who maintain coverage with them for long time period. It is suggested that in any condition, you should always evaluate your coverage for ensuring that it is competitive and meet your needs efficiently.
- Increased insurance education:
Through proposals such as the insurance consumer bill of rights and increased resources, patrons and agents are able to know their rights when it comes to insurance and to manage their insurance portfolio in a good manner.
- Death master settlements:
Death Master File database gives insurers the names of dead people with social security numbers and various life insurance companies have achieved settlements on this subject. It is a very helpful tool for the insurers for identifying policyholders whose consumers have not files claims because they were not aware that the dead person had the policy naming them recipient.
- Unsure financial and regulatory conditions:
Insurance companies are operated in an environment burdened with potential changes such as proposed tax code revisions, interest rates, international regulators are moving forward with further development of solvency II and IFRS.