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For an industry based on evaluating and mitigating perceived risks, the insurance industry is undergoing a particularly volatile era. Inflation, on a global level, remains high but steadily decreasing, while there is uncertainty about interest rates. Globally and locally here in Central Oregon, consumer confidence remains shaky, due to a mix of factors. Increased threat of natural disaster, such as forest fires, causes problems for insurance, while global factors like geopolitical instability and trade patterns that suggest an increase in protectionist policy, also keep confidence shaky.
However, many in the industry remain optimistic, and point to a shifting landscape as one that doesn’t inspire fear or doubt but instead offers new paths and opportunities for growth.
On a personal level, there are a number of challenges facing the industry. The coverage gap between mature and emerging economies widened, and most growth in developed markets was obtained through rate increases, indicating a lack of expansion into new risks. The question of whether or not people can even afford insurance, emerged as a significant topic in some markets including many in the U.S. This is likely due to rising underlying asset prices, the cost of repairs and frequency of damage (especially in areas exposed to physical risk), and rising reinsurance costs.
Amid these challenges, there are still opportunities to pivot, grow and serve the community. An aging population and evolving customer purchasing patterns present opportunities for carriers to rethink their capabilities and offerings. With the continued rise of physical risk, carriers will need to invest in new capabilities to help manage, mitigate and transfer the risk related to natural disasters. Evolving technology, particularly AI and generative AI, will enable carriers to rethink and innovate the way they do business.
On a commercial level, global lines have seen consistently strong growth. Over the last five years, commercial premiums have increased by an average of eight percent annually. Almost all growth within the commercial sector has been driven by higher premiums, and insurers must now focus on how they capture consistent, profitable growth amid the shifting market landscape.
According to the McKinsey & Company 2025 Global Insurance Report, “Although where insurers operate is important, the majority of their financial performance is driven by how they operate. This dynamic applies across both soft- and hard-cycle years and applies generally, although factors such as regional differences may lead to exceptions. While effective portfolio strategy should not be disregarded, execution matters even more, and insurers should double down on their capabilities in their core lines of business to achieve profitable growth.”
On the side of life and retirement policies, the year has been full of mixed signals. Certain macroeconomic conditions like global GDP growing, inflation steadily decreasing and equity markets turning positive, most of these benefits were relegated to specific geographic markets; not all markets saw these conditions.
A key opportunity in the life and retirement market lies in an aging population. This market is constantly being shaped and influenced by the “Silver” population of people aged 65 or older. Additionally, as generations age on, this market is being heavily influenced by the concentration of wealth among Generation X and retirees.
While many markets shift away from traditional family structures due to a multitude of reasons, these changes present an opportunity to offer flexible policies that cater to nontraditional family structures. Some primary reasons or factors include fewer marriages, lower fertility rates and a rise of dual-income households.
Speaking on local trends, Patrick O’Keefe is a benefits team lead at Inszone Insurance Services, joining Inszone in May 2024 after the merger with Cascade Insurance Center. His journey in the insurance industry began in Bend in 1992 when he founded his own insurance business. In 2007, he merged his business with Cascade Insurance Center, LLC, specializing in health insurance and employee benefits. “One of the biggest trends in recent years is the merger and acquisitions of independent insurance agencies by larger national firms,” said O’Keefe. “My agency, Cascade Insurance Center, is a good example and I think reflective of what has been happening both locally and nationally.”
O’Keefe spent the last few years with Cascade Insurance Center weighing some big decisions, most notably the long-term sustainability of his business. “With a dozen employees, including my daughter who was my COO as well as heading up my commercial lines department, there was a lot to consider,” he said. “Even though we were financially strong and growing, would we be able to keep up with the technological advances that larger firms have access to? Larger firms also receive more favorable contracts and may have access to insurance carriers that smaller firms like ours might not.”
Weighing his options and having some family meetings, O’Keefe decided that merging his firm with a larger one would be the best long-term option for his employees, including his daughter. “I could write a whole story about choosing the right firm, but suffice it to say that in the end I chose one that was aligned with our core values, the type of business we were used to doing, and the type of clients that we represent. After a year I couldn’t be more pleased. Inszone Insurance Services was the perfect fit for us and our clients.”
On the flip side, Monica Elsom has owned Insure Pacific Inc./Prineville Insurance Agency, since 2008 and Insure Brookings, LLC/Gerald Ross Agency, Inc., since 2013. As the owner of a small, locally run insurance agency with about 90 years of local history, Elsom says her position as a locally-owned agency sets her up to have a personal touch, “Being independent, we are not beholden to any corporate directives or numbers,” she said. “We are entirely focused on our clients, their overall experience and doing what is right for them. With the same carriers as larger agencies, we offer commercial and personal coverage with a local touch.”
In her world, Elsom said the biggest challenge lies in property. Specifically, all carriers are tightening up what they cover, and people are having a harder time getting insured. To alleviate this issue locally, Elsom and her team are part of a new program that aims to offer increased coverage in areas affected by wildfires. Specifically, there is a push to invest in properties to make them more insurable. Locally, homeowners can upgrade sprinkler systems, renovate parts of their house to become more fire resistant and keep up with maintenance to decrease their fire risk, and increase their ability to be covered.
While Elsom and O’Keefe operate in different parts of the insurance world, they face an identical challenge; getting young people into the workforce. They say insurance doesn’t seem as exciting as many other industries, but it is primed for growth, job security and very livable wages. Elsom says the job is perfect for people who enjoy making connections, working in a people-forward business and helping those people achieve and keep their dreams alive.
Another issue facing both the insurance and financial industries is the decreasing number of young people entering into the workforces. While both offer secure livelihoods with the opportunity for advancement, they are not very romantic and difficult to compete with things like the tech industry. This is creating a vacuum in both the carrier and agency levels that needs to be filled. My daughter is already seeing the results of this as her position within Inszone has already progressed. She has a bright future ahead of her, most likely beyond what she may have had if I had remained an independent agency.
While the industry is constantly shifting, there does seem to be rising opportunities in the world of insurance, for those who are willing to adapt to our modern economic and social landscape.
