4 key trends shaping the future of life insurance for the millennials and Gen Z (2024)

FAQs

What are the trends that are shaping the future of the insurance industry? ›

AI and machine learning are helping insurers make more precise risk assessments and provide hyper-personalized insurance offerings. Such forecasts may help explain why the global AI in insurance market, estimated at USD $4.59 billion in 2022, is expected to reach USD $79.86 billion by 2032.

Of millennials who have life insurance, the majority got it to help with end-of-life costs such as funeral and burial expenses. The other main reason for investing in life insurance was to support family living expenses, provide money for children, and alleviate debt.

Insurers are raising rates to cover their costs.

To preserve profits, insurers increased full coverage premiums by an average of 26% in 2024, according to Bankrate. That's the biggest hike in about 48 years.

Gen X (ages 44-59) and Baby Boomer (ages 60-78) claim the highest percentage of ownership at 55 percent and 57 percent, respectfully. Millennial and Gen X generations are significantly more likely to own term life insurance when compared to younger and older generations.

We expect robust growth in life business (premiums up 6.7% in 2024‒28), supported by rising demand for term life cover by the middle-class and the country's young population, and also increasing industry adoption of Insurtech.

Shifting the younger generation's mindset about insurance will be key to attracting the next generation of brokers, underwriters, risk managers, and claims adjusters. But the industry needs to reinforce the benefits of working in insurance and steer the conversation to better address Millennials' career goals.

Less than half of millennials have life insurance, according to a survey conducted by insurance-comparison website Insuranks. Of 1,000 respondents born between 1981 and 1996, only 47% said they had a policy.

Life insurance can provide more than just a cash payout to surviving family members. When used strategically, it can also be a powerful legacy planning tool. The right policy can offer a financial safety net for your family—and a way to grow your wealth during your lifetime.

The result is that the industry in 2024 is a more balanced market, where reinsurers' capital has been replenished, while demand for reinsurance is increasing, despite price increases. “In prior cycles you would see as the reassurance price goes up insurance companies retaining more risk.

What is the outlook for personal insurance in 2024? ›

The insurance industry seems to agree on one thing for 2024: Massive rate increases are behind us. While clients who have experienced major premium hikes in the last several years should welcome this news, they will not see rate decreases anytime soon.

Life Insurance Industry Statistics

Quarterly data from LIMRA shows that year-over-year from 2022, the sale of life insurance policies has increased by 4%. Year-over-year, the total new annualized premium for individual life insurance rose by 5%, reaching $3.7 billion.

Young drivers ages 16 to 24 tend to have the most expensive car insurance. Drivers in this age group are often inexperienced and are more likely to get into car accidents and file insurance claims. As a result, car insurance companies often charge higher premiums to young drivers.

Many life insurance companies sell new policies to applicants up to age 85 or 90. Your need for life insurance may be less if you don't have any debt or dependents who rely on your income. In that case, a simple final expense policy may suffice to cover funeral or cremation costs.

Life insurance is no longer needed for many people once they reach their 60s or 70s. At this point they retire, their kids have grown up, and they've paid off their mortgage and other debts. However, others prefer to keep life insurance later in life to leave an inheritance and to pay off final expenses.

New Models, Personalized Products

Digital models will make intermediaries in the insurance value chain - marked by their excessive dependence on human effort - obsolete. Flexible coverage options, micro insurance and peer-to-peer insurance will become viable options in the long run.

A trend factor is used in the loss forecasting process that accounts for increases over time in the dollar amount of losses sustained by an organization.

The business of insurance, which once was stable and predictable, isn't that way anymore. Growth without sacrificing profitability is challenging, climate change is irrevocably impacting certain risk profiles, distribution needs have become truly omnichannel and customers expect products tailored just for them.