As we close out the year, we’re looking ahead to 2023. Read on to learn how we think the economy, inflation, and supply chain issues will impact on small businesses in the new year, and what trends are top of mind for 2023 small business insurance.
Economy
Despite consistent threats of a looming recession and continued growth at a slower pace, the economy has persisted. The Federal Reserve recently indicated that it would look to stall increasing interest rates in the new year. This is great news for small businesses as the costs of borrowing money and making investments are expected to decrease. For small businesses that have had to cut costs and sometimes employees to maintain market parity, they can now look for some leveling out in the new year.
In tough economic times, many small businesses seek to cut expenses like insurance. However, saving monthly premium costs in the short term can have outsized negative implications in the long term. Insurance protects against unforeseen losses and is a key part of a smart financial strategy for small business owners.
2023 in small business insurance trends
Economic uncertainty in the last year has made it difficult for some small business insurers to predict what pipeline products and services will be most essential for customers in the new year. Customers can expect changes in the delivery of insurance by initiatives to embed insurance into the user experience of goods and services; therefore, eliminating disruption and creating more seamless insurance buying experiences. Beyond the expansion of embedded insurance, there are several other trends we see on the horizon.
Automation
Automation will be a key trend in the insurance industry in 2023. Automation will help insurers streamline their operations, reduce costs and increase efficiency. The use of AI and machine learning technologies will allow insurers to better identify risks, generate accurate pricing and better serve customers.
Digitalization
Digitalization will continue to be a major trend in 2023 as insurers shift away from traditional paper-based processes and embrace digital solutions. Digitalization will provide customers with a better experience, as well as enabling insurers to collect and analyze data more effectively to better understand customer needs.
Data-driven decision making
Data-driven decision-making will be a key trend in 2023 as insurers look to make more informed decisions. Insurers will need to collect and analyze data to better understand customer needs, identify risks and price products accurately. The use of analytics and predictive models will help insurers make better decisions.
Small business customers can also look to better understand their insurance risks as more insurers look to partner with service providers to give best practice advice throughout the lifecycle of the policy. Better, more responsible, use of technology and data are also on the horizon as more insurers are looking to diversify and demystify data source information and improve the technology behind the scenes.
2023
Overall, with the changes in the economy, inflation and supply changes expected next year, insurers are focusing on meeting the insurance needs of small businesses as they evolve. Stay up-do-date with Coterie Insurance to learn more about 2023 small business insurance trends.
