U.S. Insurance Brokerage for Employee Benefits Market Statistics: 2032
The U.S. insurance brokerage for employee benefits market size was valued at $34.74 billion in 2022, and is projected to reach $70.11 billion by 2032, growing at a CAGR of 7.5% from 2023 to 2032.
An employee benefits broker is a licensed insurance professional who specializes in employee benefits brokerage services. The broker knows what benefits programs available, which vendors are provide them, and how benefits are priced. An experienced benefits broker will take the time to understand the organization needs and develop a customized employee benefits plan to meet organizations workforce needs.
The U.S. insurance brokerage sector plays a pivotal role in facilitating the management and optimization of employee benefits programs. Employee benefits, ranging from health insurance to retirement plans and beyond, are instrumental in attracting and retaining top talent in the competitive job market. Insurance brokers act as intermediaries, connecting employers with insurance providers and navigating the complex landscape of regulations, market trends, and emerging opportunities.
The U.S. insurance brokerage for employee benefits is expected to witness significant growth during the forecast period, owing to the increase in complexity of employee benefits programs, including health insurance, retirement plans, and wellness initiatives and the need for competitive advantages in talent acquisition. However, the frequent changes in healthcare, tax, retirement regulations and massive availability of alternative platforms for purchasing insurance policy are the major factors limiting the market growth. On the contrary, the rising importance of employee well-being and mental health and implementation of technologies in existing products and service lines are expected to offer remunerative opportunities for the expansion of the U.S. insurance brokerage for employee benefits market.
Depending on the brokerage type, the retail segment dominated the U.S. insurance brokerage for employee benefits market share in 2022 and is expected to continue this trend during the forecast period, owing to rise in need for specialized insurance policies provided by retail brokerage among the end user. However, the wholesale segment is expected to witness the highest growth in the upcoming years, due to the rise in adoption of wholesale brokerage by various companies to offer unique and specialize products to their clients.
The report focuses on growth prospects, restraints, and analysis of the U.S. insurance brokerage for employee benefits trend. The study provides Porter’s five forces analysis to understand the impact of various factors, such as the bargaining power of suppliers, competitive intensity of competitors, the threat of new entrants, the threat of substitutes, and the bargaining power of buyers on the U.S. insurance brokerage for employee benefits share.
Segment Review
The U.S. insurance brokerage for employee benefits is segmented based on brokerage type, product type, and organization size. Depending on brokerage type, it is bifurcated into retail brokerage and wholesale brokerage. In terms of product type, it is fragmented into group health, group life, stop loss insurance, long term and short term disability, and others. By organization size, it is classified into large enterprises and small & medium-sized enterprises (SMEs).
The major players operating in the U.S. insurance brokerage for employee benefits market are Acrisure, LLC, Alliant Insurance Services, Inc., Aon Plc, Arthur J. Gallagher & Co., Assured Partners, Brown & Brown Insurance, Lockton Companies, Mercer LLC, USI Insurance Services, Willis Towers Watson, AmWins Group, HUB International Ltd., CRC Group/Truist Insurance Holding, RT Specialty (Ryan Specialty), Risk Strategies, Jencap, Accretive Insurance Solutions, Bridge Specialty Group, Brown&Riding, ARC Excess & Surplus, LLC, U.S. Risk Insurance Group, and Program Brokerage Corporation. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.
Top Impacting Factors
Growth in Digital Transformation
Technology has transformed the industry, allowing brokers to provide efficient services, real-time data analytics, and enhanced customer experiences. In addition, with integration of IT & analytic solutions, brokers are increasingly providing customer centric policies, by providing customized insurance policies & timely services. Moreover, brokers are identifying & targeting potential customers, analyzing behavioral patterns and common demographics of the customers. Furthermore, implementation of technology & analytical tools help brokers target segment while selling insurance policy. These factors subsequently fuels the growth of the U.S. insurance brokerage for employee benefits market.
Massive Availability of Alternative Platforms for Purchasing Insurance Policy
Increased availability of insurance intermediaries, online channels, and other third-party website, which do not require additional commission charges for insurance policy restrains the market growth. Moreover, these intermediaries offer tailor-made policy and accelerate products & services for growing consumer demands, with exclusive ideas & solutions for their coverages.
Furthermore, massive information provided on the internet regarding insurance policies, which is available free of cost, allow customers to take a proper decision regarding purchase of a new insurance policy by comparing premium prices. Therefore, the need for insurance brokers tends to fall due to availability of alternative platforms, which hampers the market growth.
Diversification of Services
The increasing emphasis on employee well-being, encompassing aspects such as mental health support, financial wellness, and maintaining a healthy work-life balance, offers openings for brokers to broaden their range of services. By doing so, brokers can meet the evolving needs and expectations of both employers and employees.
End-User Adoption
The growing adoption of insurance services among all sizes of organizations, including small and mid-sized businesses (SMBs) is accelerating end-user adoption. The end users in this market may vary based on the specific services provided by the insurance brokers and the brokerage type it manages. Further, there insurance brokerage for employee benefit services find a wider application in large enterprises, as they manage administrative tasks related to insurance policies at a wider scale. In addition, to boost the adoption of insurance brokerage services for employee benefits, policy providers must provide comprehensive training to both employees and clients, as well as utilize tools, such as mobile apps, online portals, and AI-driven chatbots, to make the process of finding, purchasing, and managing insurance policies more convenient for their clients. Hence, such remarkable benefits of insurance brokerage service in the employee benefit segment are expected to contribute to its high demand, and eventually result in numerous opportunities for market growth.
Government Regulation
The U.S. government has imposed a number of regulations and standards to support the growth of the insurance brokerage for employee benefits market in the country. Some of these regulations include affordable care act (ACA) regulations, consumer protection laws, and more. The U.S. government has further enforced several state regulation and ethical standards to oversees the insurance industry within its jurisdiction. Insurance brokers must comply with state regulations and ethical standards to obtain and maintain their licenses while conducting their business.
In addition, the government has implemented several acts and regulatory norms to support the interest of insurance brokers. These includes:
The Insurance Information and Privacy Protection Model Act
This act was developed by the National Association of Insurance Commissioners (NAIC) to provide guidelines for insurance agencies and brokerages on the collection, use, and disclosure of customer information.
By Brokerage Type
Retail segment accounted for the highest market share in 2022.
The Gramm-Leach-Bliley Act (GLBA)
While not specific to insurance brokerage, the GLBA includes provisions for the protection of consumer financial information. Insurance brokerages may be subject to the GLBA if they engage in certain financial activities.
By Product Type
Group Health segment accounted for the highest market share in 2022.
Anti-Money Laundering Regulations
Insurance brokerages may be subject to various anti-money laundering regulations and requirements to prevent money laundering and the financing of terrorism. These regulations are primarily enforced by the Financial Crimes Enforcement Network (FinCEN).
These regulatory practices are expected to create growth opportunities for the market during the forecast period.
By Organization Size
Large Enterprises segment accounted for the highest market share in 2022.
Key Benefits for Stakeholders
- The study provides an in-depth analysis of the U.S. insurance brokerage for employee benefits forecast along with current & future trends to explain the imminent investment pockets.
- Information about key drivers, restraints, & opportunities and their impact analysis on U.S. insurance brokerage for employee benefits market trends is provided in the report.
- Porter’s five forces analysis illustrates the potency of the buyers and suppliers operating in the industry.
- The quantitative analysis of the market from 2018 to 2032 is provided to determine the market potential.
U.S. Insurance Brokerage for Employee Benefits Market, by Brokerage Type Report Highlights
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Analyst Review
In accordance with several interviews that were conducted of the top level CXOs, the growing complexity of employee benefits programs, driven by ever-shifting regulations and evolving workforce expectations, stands out as a prominent driver. To meet above mentioned challenges effectively, organizations must cultivate deep expertise within their teams. Continuous investment in education and training ensures that brokers remain well-informed about regulatory changes and emerging trends.
The promotion of adaptability within organizational culture to enable swift responses to regulatory and technological shifts is equally vital. Moreover, diversification of service offerings is a fundamental strategy for staying competitive and addressing evolving client needs. Beyond traditional health insurance and retirement plans, the market presents opportunities for innovation, such as mental health support, financial wellness programs, and solutions tailored to remote workforces. The ability to innovate and provide holistic well-being solutions positions organizations as market leaders.
The U.S. insurance brokerage for employee benefits market is poised for both, growth and innovation. Growth of this market depends on commitment to expertise, diversification, technology adoption, strategic regulatory navigation, client-centricity, and adaptability. By embracing technology-based strategic imperatives, organizations position themselves at the forefront of the industry, delivering value to clients and stakeholders while securing a prosperous future. For instance, in February 2022, Everbridge and Brown & Brown collaborated to launch technology-enabled risk management solutions for P&C insurance policies.
Some of the key players profiled in the report include Acrisure, LLC, Alliant Insurance Services, Inc., Aon Plc, Arthur J. Gallagher & Co., Assured Partners, Brown & Brown Insurance, Lockton Companies, Mercer LLC, USI Insurance Services, Willis Towers Watson, AmWins Group, HUB (PBC), CRC Group / Truist Insurance Holding, RT Specialty (Ryan Specialty), Risk Strategies, Jencap, Accretive Insurance Solutions, Bridge Specialty Group, Brown&Riding, ARC Excess & Surplus, LLC, U.S. Risk Insurance Group, Program Brokerage Corporation, an Marsh & McLennan. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.
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