The Brightest Prospects for 2023
Happy New Year! 2022 is in the books and proved to be more successful and less of a restructuring and rebuilding year for the specialty insurance markets than we anticipated. Nevertheless, financial markets have suffered most in the previous 12 months with crypto tanking, blue chips underperforming and real estate on a roller coaster. Meanwhile, the Fed is trying to stifle soaring inflation by rapidly increasing interest rates. Volatile times. But let’s get back to insurance and take a moment to look ahead to what we can hope for and perhaps expect from the disability and specialty lines markets over the next 12 months.
The previously intense hardening of the Lloyd’s market has showed signs of halting. Rate increases have plateaued, and underwriting syndicates have once again begun to cautiously loosen more-conservative underwriting methodologies that came about during the COVID era. Although there are no signs of a truly soft market in the near future, it is comforting to see more specific boundaries being set by the risk takers, allowing us to better anticipate underwriter expectations and marketplace reactions.
This year we foresee a continued evolution of the famed Lloyd’s GSI disability space with a focus on long-term product viability. Group guaranteed-issue excess disability insurance has been a huge premium builder for the market over the last decade and has stolen some of the spotlight from the personal accident market’s bread and butter – fully-underwritten personal disability insurance.
2023 will see renewed interest in individual personal DI underwriting. Market expansion is certainly expected from the top on down. By all accounts, the typical and historically successful physician, attorney, executive and accountant demographics will continue to shine as prospective clientele, but this year we will see more out of high finance, especially the private equity space, as well as some fringe industries like cannabis and digital entertainment sectors, including the likes of internet and social media celebrities.
We also anticipate to see more risk diversity this year with further expansion into the middle markets, targeting excess and impaired-risk disability benefits for gray collar employees not covered by governmental benefits.
Aside from disability insurance, we expect another growth spurt out of the highly successful Failure to Survive product line which provides key person death benefits for businesses as well as buy/sell and business loan situations. Impaired-risk retention and quick simplified policy issuance are the key selling points, making FTS the fastest growing financial protection product in the specialty insurance markets today.
Despite the ever-present national and global concerns for inflation, potential recession and speculative financial and real estate market tumbles, the specialty disability and life markets remain active arenas for consumers seeking much needed, required and important insurances.