While you can’t predict how the economy will perform, it’s safe to assume there will be strong times and weak times. How do economic downturns impact the insurance industry?
During downturns, demand drops in just about every area. Hiring slows or stops, cooking at home takes the place of eating in restaurants and used cars get some extra miles while their new counterparts sit on the lots.
Demand slows for insurance, too. That means the market will be more competitive. But insurance coverage is a need, not a want. Individuals and businesses shouldn’t go without insurance coverage altogether.
What’s Happened to the Insurance Industry in Past Downturns?
During the 2020 pandemic recession, McKinsey reports that premium growth in the insurance industry dropped to 1.2%, from an average of 4% per year in the previous 10 years. And 2020 profits dropped 15% compared to 2019. Premiums and profits bounced back in 2021.
In a recession, people may be less likely to buy homes, so demand for homeowners policies may drop.
Recessions have triggered increased auto insurance rates, which can push drivers to shop around for the best prices, especially when their budgets are tight.
What Makes Farm Bureau a Good Choice?
While there’s no way to guarantee what the future will hold in an economic downturn, working as a Farm Bureau agent could be a smart option. At Farm Bureau, you’re not locked into one or two service lines.
You have the opportunity to sell:
Those options give you more stability, since it’s unlikely that a downturn will hit all sectors of the economy equally. In tougher economic periods, you may want to spend extra time reviewing coverage with your clients to make sure they’re protected. Maybe you’ll find opportunities to upsell them on coverages they haven’t considered but they need, like umbrella policies or disability insurance.
Or you could focus on adding value by building strong relationships that keep your clients loyal to you over the years. That way, you’re taking steps to protect your business not just in this downturn, but in those that follow.
At Farm Bureau, all of our agents earn commissions. Simply put, when you put in the work, you earn more. You can rely on yourself in good economic times and bad. And Farm Bureau has been operating successfully for over 85 years, so we know what it takes to survive a recession and support our agents during difficult times.
Is a Future With Farm Bureau Right for You?
Are you asking yourself, “Should I be an insurance agent?” If so, learn what makes Farm Bureau a strong opportunity in any economy and why insurance can be a solid field during a downturn. Reach out today to find out what we offer and see whether a change to the insurance industry is right for you.