2025 is going to be here before you know it! But that doesn’t mean you can take your foot off the gas for the rest of 2024. So, what do you need to know to finish out the year strong? We’ve got a few insights for you, straight from Zywave’s industry-leading content experts.
Here are the developments and trends you should be watching for in the second half of 2024.
Click to get complimentary copies of the 2024 Midyear Market Outlooks.
Artificial Intelligence
Generative artificial intelligence (AI) is boosting productivity across a multitude of industries. But that doesn’t mean it comes without concerns.
AI has opened a new route for cybercrime. In particular, criminals can utilize AI when distributing malware, cracking passwords, deploying social engineering scams, identifying software vulnerabilities and analyzing stolen data. Organizations need to ensure that they have advanced threat identification and data protection efforts in place to ensure that they don’t fall victim to AI-powered attacks.
The algorithms that power AI also come with their own risks, especially when it comes to employment decisions. Companies leveraging AI need to ensure that the tools they are using are fair and do not result in discriminatory employment decisions. To assist companies in this endeavor, the EEOC released guidance in 2023 to help companies ensure that they remain in compliance with fair employment laws. The EEOC will also be continuing to enforce antidiscrimination laws as the use of AI grows.
Rising Medical Costs
Health care costs have risen sharply over the past few years. The average cost of medical coverage per employee is no exception. In 2023, there was a 5.2% increase per employee, and experts are predicting a rise of 5.4% in 2024. This is due to a variety of factors, including inflation, health system consolidation, costly gene and cell therapies and the use of more expensive medications such as GLP-1s.
But beyond just the employee benefits, the workers’ compensation and general liability markets are also feeling the pinch of increased medical costs. The U.S. Bureau of Labor Statistics reported that the total value of medical care has jumped by over 115% since 2000. And while many states have fee schedules in place that help control medical cost categories, shifts in the type and volume of medical services provided, combined with increased injury and illness severity have impacted overall medical claim costs.
Natural Disasters
It’s no surprise that extreme weather events are becoming more frequent and more intense. In the first quarter of 2024 alone, global natural disasters were estimated to have cost $17 billion in insured losses. And this trend is expected to continue through the remainder of the year. The National Oceanic and Atmospheric Administration is predicting that unusually warm temperatures on land and at sea will keep spawning severe storms, leading to more tornados and above-normal hurricane activity along the Atlantic and Gulf coasts.
Social Inflation & Nuclear Verdicts
Jury verdicts exceeding $10 million, also known as nuclear verdicts, have been plaguing several industries including the commercial auto market. These nuclear verdicts often are seen as a result of social inflation, which refers to the rising cost of insurance claims influenced by societal trends. The cost of the average nuclear verdict has now reached $44 million, which is double what was seen in 2020. This is forcing more insurers to restrict coverage or even leave the market, leaving insureds more vulnerable.
Get the Full Market Outlooks
If you want to get even greater insights, click here to get your copy of the full results from all the market outlooks. We’ve broken down the midyear trends by market for:
- Commercial Auto
- Commercial Property
- Cyber
- General Liability
- Employee Benefits
- Workers’ Compensation
- EPL
- D&O
Get your copy now!
This article is based on a series of pieces originally published in Zywave’s Content Cloud.
