The Top 5 Trends in Insurance for 2021

COVID-19 and the resulting hard market have significantly impacted the insurance industry. As 2021 fast approaches, brokers and their policyholders will continue to face myriad new and lingering challenges that will continue in the new year. Here’s what you need to know: 

  • Cybersecurity risks will increase. With the vast majority of employees working remotely and more data and applications moving outside the traditional security perimeter, it is predicted that cyberattacks will keep rising. According to Bridewell Consulting and reported on TechHQ, cybersecurity in 2021 will be even more challenging, as the attack surface is now bigger, and most measures to implement and control security and data policies may lack the capabilities to protect a widening remote environment.

Take note! Now’s a great time to approach your clients with a cybersecurity insurance policy.

  • Hard market conditions will continue. Reports show that due to COVID-19, the industry experienced a nearly $80 billion loss. Next year, insurers and insureds should expect a carryover of hard market conditions into 2021 with even steeper rate increases, stricter underwriting, fewer markets and more limits imposed on coverage.

Take note! Review policies well in advance of renewals to give yourself plenty of time to shop the market and present the best coverages and rates to policyholders.

  • Professional liability claims will become more common. Due to COVID-19, company managers will face a growing list of challenges related to pandemic-induced litigation. Compounded by the second wave of shutdowns, issues include challenges regarding compliance with state and federal laws/regulations and employee layoffs and furloughs — to name just a few. As a result, “mega” claims have increased and will become more prevalent in the new year.

Take note! Take the time to discuss with business clients the critical financial and reputational protection that professional liability coverage such as directors and officers provides. 

  • The number of gig economy workers will grow. Many businesses are using independent contractors and freelancers instead of full-time employees. The pandemic has been a definite catalyst in growing the ever-expanding army of gig economy workers. But this shift in the nation’s workforce also means a shift in risk-mitigation efforts. For example, gig workers are generally not covered under the hiring company’s insurance (e.g., health, disability, liability). In addition, gig workers seeking coverage may not be aware that the type of risks they could be exposed to aren’t typically covered under a standard commercial or personal lines insurance policy, which could leave them unprotected. This presents specific market opportunities within your book of business for providing coverage for gig economy workers who may need liability, health, life, disability and other types of ancillary insurance.

Take note! State laws and regulations that define what classifies gig economy workers as independent contractors will differ from state to state – even if workers are not considered employees under federal law. Be sure to educate your clients on the importance of knowing the specific laws and regulations in their respective states.

  • Climate-related risks increase. According to the website Law360, climate change sits at the top of the insurance industry’s list of concerns for 2021. From wildfires to floods and everything in between, the industry will experience emerging changes in insurance regulatory initiatives and developments regarding climate change-related risks. In fact, the National Association of Insurance Commissioners has established a new Climate Change and Resiliency Task Force for 2021, along with a number of key initiatives that will consider policy and coverage recommendations for addressing pre-disaster mitigation, stress-testing scenarios and new insurance products — to name a few. 

Take note! According to Deloitte, finding a balance between ensuring affordability and availability and managing financial stability may get tougher in the new year as extreme weather conditions escalate. Be prepared to proactively work with your insureds to help them understand these shifts and to find the best coverage at an affordable price.

It’s time to put 2020 behind us and look forward to what’s ahead. By staying informed on industry trends, you can better run your insurance agency and better serve your clients.

Pressed to complete your insurance continuing education credits before the end of the year? Let FastrackCE help you get all the credits you need at a time that’s convenient for you. We offer online courses in most states, covering a broad range of topics, including most of the state-mandated courses such as ethics, flood, long-term care and annuity training. For more information, call 800-544-3605 or visit us at

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