Insurance is a safety net, and the rising need for protection should expand demand for insurance distribution. Consequently, the revenue opportunity for insurance brokers, agents, and other distribution firms should grow faster than historical levels of 2% to 4% over the next several years. This combination of rising inflationary factors, the need for solutions, and an array of increasingly complex risks will likely drive the market growth rate to the mid- to high single digits. Insurance brokers have a track record of delivering above-average returns to investors.
William Blair’s Adam Klauber, CFA, partner, group head of the financial services and technology sector, highlights a robust long-term secular growth opportunity for the insurance distribution industry in this report. Specifically, the analysis indicates similar or enhanced potential over the next five-plus years.
The macro environment for insurance is becoming increasingly volatile, raising long-term secular demand for insurance distribution services. The total available market for insurance distribution revenue is forecast to grow roughly 36% from 2024 to 2029. This compares to an increase of 28% in the last five years. The key inflationary factors of rising weather volatility and escalating litigation should, at a minimum, result in higher growth in property-and-casualty (P&C) insurance premiums. Correspondingly, commercial and personal insurance clients have a greater need for assistance/capabilities related to risk mitigation, policy structuring, and management of insurance capacity. Insurance brokers and agents are well-positioned to respond to this increasingly dynamic environment.
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