Insurance Brokerage Market by Insurance Type (Life Insurance and Property & Casualty Insurance), Brokerage Type (Retail Brokerage and Wholesale Brokerage), and Regional Analysis (North America, Europe, Asia-Pacific, and LAMEA): Global Opportunity Analysis and Industry Forecast, 2021–2028

Global Insurance Brokerage Market Analysis

The global insurance brokerage market was valued at $317.9 billion in 2020 and is projected to reach $515.3 billion by 2028 registering a CAGR of 5.4%.                                                                                   

Market Synopsis

The rise in demand for insurance policies and several initiatives undertaken by the government in the area of insurance policies are driving the market growth.

However, if the insurance agent or insurance broker is not familiar about the technologies used (for instance, cloud computing and artificial intelligence), it might be difficult for him to assist the client. This might restrain the market growth during the forecast period.

According to the regional analysis of the market, the Asia-Pacific insurance brokerage market is anticipated to grow at a CAGR of 6.5% by generating a revenue of $52.4 billion during the review period.

Insurance Brokerage Market Overview

An insurance broker is a person who works with numerous insurers to sell, request, or negotiate insurance products on behalf of their clients. An insurance broker serves as a link between policyholders and insurers, and thus plays a crucial role in the development of the company’s economy. Insurance brokers provide their clients with technical and expert insurance advice. Health insurance, property and casualty insurance, and medical insurance are among the insurance products offered by brokers. Insurance brokers work closely with their clients to ensure that their coverage needs are met.

Impact Analysis of COVID-19 on the Global Insurance Brokerage Market

The COVID-19 outbreak has had a negative impact on the growth of the insurance brokerage market. This is due to governments in most nations imposing lockdowns and shutting down businesses, public and private organizations around the world to prevent the virus from spreading. Furthermore, due to the closure of various insurance brokerage firms across developing nations, and shareholders of publicly held insurance brokerage companies withdrawing their contributions from the company to raise funds to meet their daily and conventional needs, the consumer demand for insurance has decreased gradually. Moreover, the shareholders of public trading insurance brokerage companies are withdrawing their contributions in order to raise funds to meet their daily and routine demands. Furthermore, pioneering insurance companies are showing increased interest in insurance brokers in order to improve their business processes and provide immediate insurance services all over the world.

Increasing Technology in the Area of Insurance Brokerage is Anticipated to Drive the Market Growth

Insurance agents and brokers are investing in digital technologies in order to provide assistance online and increasing sales and margins. The process of converting information into digital formats is known as digitalization. This includes providing agents and brokers with knowledge and techniques in digital formats via insurance websites, digital distribution channels, and website interactions. These internet platforms and other mobile applications are intended to improve business processing efficiency and reduce costs. This implementation of technology into the existing services, is said to boost the market growth.

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Lack of Knowledge in Insurance Brokers About Technology Used May Restrict the Market Growth

Customers' direct purchases of insurance plans, as well as the availability of multiple platforms for obtaining insurance products, may limit market expansion. For instance, technologies like cloud computing and location analytics provide data about their customers. These technologies provide insurance brokerage firms with extensive data and insights about their clients, allowing them to provide timely, relevant coverage based on individual needs. Lack of knowledge about current technological trends may make it difficult for salespeople, insurance agents, or brokers to market their product to customers.

Government Initiatives in the Field of Insurance Policies is Expected to Increase the Opportunities in the Market

Several government bodies are launching major initiatives in the field of insurance policies, allowing people to access a wide variety of services. Governments are also informing potential customers about the multiple opportunities and risk coverages and assets that can be protected through an insurance scheme. Besides that, the government is putting in place a number of initiatives to support the insurance industry in providing insurance policies to individuals from different walks of life. As a result, these government developments are expected to provide profitable opportunities for the industry in the coming years.

To know more about global insurance brokerage market opportunities, get in touch with our analysts here.

Source: Research Dive Analysis

The property & casualty insurance sub-segment is predicted to have a dominating market share in the global market and register a revenue of $279.3 billion during the forecast period. The increasing occurrence of major natural disasters necessitates accurate risk assessment. With the changing risk landscape, changing customer expectations, and the entry of new players, the property and casualty insurance landscape is rapidly evolving.

The life insurance sub-segment is anticipated to have the fastest market growth, and it is predicted that the market shall generate a revenue of $236.0 billion by 2028, growing from $125.8 million in 2020. The primary factor influencing a policyholder's life insurance premiums is his or her age. According to the insurer, a young person has a better chance of keeping the life insurance policy for many years. He or she is also less likely to die prematurely from an age-related disease.

Source: Research Dive Analysis

The retail brokerage sub-segment of the global insurance brokerage market is projected to have the fastest growth and surpass $367.5 billion by 2028, with an increase from $215.4 billion in 2020. Due to the penetration of internet, and 5G & 4G services, online retailing brokerage has become crucial. Mobile-first sites, dedicated apps, emerging payment methods, and other tools are making retail brokerage on smartphones much easier. These technological factors are driving the sub-segments’ growth.

Source: Research Dive Analysis

The Market for Insurance Brokerage in North America to be the Most Dominant

The North America insurance brokerage market accounted $146.8 billion in 2020 and is projected to register a revenue of $227.8 billion by 2028. Because of increased awareness on the benefits of insurance coverage and government initiatives to cover all residents under insurance coverage, North America dominated the global insurance market with the highest market share. Furthermore, North America, particularly the United States, has a highly organized public healthcare infrastructure, making it the largest market in the North American health insurance market.

The Market for Insurance Brokerage in Asia-Pacific to be the Fastest Growing

The share of Asia-Pacific insurance brokerage market is anticipated to grow at a CAGR of 6.5% by registering a revenue of $52.4 billion by 2028. The Asia-Pacific region plays a vital role in the insurance industry's future. It is responsible for nearly one-third of the world's population, and it comprises of several of the quickest growing economies, and a number of countries with rapidly growing middle-class populations. Asia-Pacific is anticipated to witness the fastest growing market during the study period due to rapidly expanding insurance providers in the region, particularly in India and China, as well as growing awareness of insurance coverage in the region.

Competitive Scenario in the Global Insurance Brokerage Market

Product launches and mergers & acquisitions are common strategies followed by major market players.

Source: Research Dive Analysis

Some of the leading insurance brokerage market players are Acrisure LLC, Aon plc, Brown & Brown Inc, Gallagher, HUB International Limited, Lockton companies, Marsh & McLennan Companies Inc., Truist Insurance Holdings, USI Insurance Services L.L.C, and Willis Towers Watson.

Porter’s Five Forces Analysis for the Global Insurance Brokerage Market:

• Bargaining Power of Suppliers: The suppliers in the insurance brokerage market are high in number. If we assume that suppliers have few customers (e.g., a small/medium-sized firm), they are likely to give in to the demands of buyers. On the other hand, if we assume suppliers have several customers, they have more power over buyers. Since there are a significant number of suppliers in the industry, switching costs are low for buyers.
  Thus, the bargaining power of the suppliers is low.
• Bargaining Power of Buyers: Buyers have huge bargaining power; they demand best services at low prices. This increases the pressure on the insurance brokers to offer the best service in a cost-effective way. Thus, buyers can freely choose the convenient service that best fits their preference. 
  Thus, the bargaining power of the buyers is high.
• Threat of New Entrants: Due to high entry barriers and brand loyalty for customers and high government regulations it is difficult for a new entrant to enter the market.
  Thus, the threat of the new entrants is low.
• Threat of Substitutes: There are many alternative products available in the market. The cost of switching is high. 
  Thus, the threat of substitutes is low.
• Competitive Rivalry in the Market: The competitive rivalry among industry leaders is rather intense, especially between the global players including Acrisure LLC, Aon plc, and Brown & Brown Inc. Therefore, competitive rivalry in the market is high.