Personal Lines Opportunities New and Old

A Conning report on changing personal line dynamics notes some interesting opportunities for insurers and distributors.

Projections show for a rapid increase in the number of people in the 65-plus group over the next 10 years. This aging U.S. population is opening doors for specialized products and services – ala Hartford and its longstanding AARP endorsement.

Conning estimates the size of this market this market for auto at $51 billion as of 2015, and it is expected that the emerging group of seniors will be working longer, which means they will be driving more, the report states.

Yet, a downside could be more claims, according to the report.

Opportunities also lie in the youth segment, defined as those between age 18 and 25. While growing more slowly, they represents an estimated population of 36 million.

“Premiums for this age group can be volatile and range from 150 percent to 250 percent of market average premiums,” the report states. “Our assessment of the current market size of the personal auto portion of this segment is $28 billion.”

More people in this group rent rather than own. The report estimates a roughly $475 million market potential for this group compared with a total homeowners market of $80 billion in 2015.

“This is the highest-risk segment for auto insurers – posing greater risk of accident frequency than the senior segment,” the report states.

It’s not all bad.

This market, currently geared toward rentals, may eventually put upward pressure on the demand for houses as it ages into higher-paying jobs and the new “peak baby” years of 25-34, according to the report.

The report states that many insurers are poised to take advantage by getting more into contents coverage, and agents who wish to build long-lasting relationships right now should consider it too.