The insurance industry has developed tremendously over the past decade, and the biggest drivers of change are the advent of new technology and a corresponding growth in insurance company size. Many companies are now reporting that they are experiencing a loss of business because of the changing economic environment. The industry continues to grow and expand, but there is a shift happening in how the industry is organized. At the same time, insurance companies are also consolidating, which means they are making some of their business activities more centralized.
There are many types of changes taking place within the industry, but perhaps the most profound ones are the moves from standalone brokers to full service insurance companies and agents. In fact, many insurance companies actually provide brokers and entire agencies. This is because these organizations have realized that an agent is much better at connecting with potential customers and providing them with information about policies and the like. Insurance agents, on the other hand, have traditionally been sales people who sell insurance policies to people who need them. This division has led to a lot of friction between the two groups of professionals.
One issue that has been a sore spot between insurance agents and policyholders is the cost of the premium. Premium costs have increased at an alarming rate in recent years as the industry has continued to grow, but insurance companies have been quick to point out that they cannot increase premiums because of market conditions. To that end, insurers have been offering discounts to policyholders who purchase coverage from them directly, via agents, or via other means. These discounts are designed to lure people into buying policies from these companies.
Another significant change taking place within the industry is the reduction in the role of independent brokers. Most states now require that all agents working with insurance companies to be licensed by the state's Department of Financial Services. This requirement is intended to strengthen the integrity of the industry, as it is now suspected that broker-related referrals could be influencing policy decisions. In addition, many state insurance agencies are now prohibiting brokers from referring new customers to the insurer.
In addition to the growing restrictions put on insurance agents and the creation of state insurance agencies, there is also a growing concern over the role of employers in relation to workers' compensation claims. Increasingly, employers are shielding themselves from liability lawsuits by limiting workers' compensation benefits to injuries that occur “at work.” In recent years, however, there has been an increasing number of worker killed or injured at work. While most people understand the concept of work-related injuries, not everyone is familiar with how employee self-remedies can go wrong. Injuries at work may include slip and fall injuries, car accidents, and traumatic brain injuries caused by a hazardous work environment. According to legal experts, employers must take action against their own employees if they are consistently exposing their employees to unnecessary risk.
As the economy continues to recover, more states are enacting new regulations to protect injured workers. In addition to protecting injured workers, these laws are impacting business and insurance companies as well. Insurance companies are increasingly limited in their ability to collect premiums from injured workers. Many states have also passed laws that require employers to provide workers' compensation benefits even if the injury occurred while away from work. As business and insurance companies look to limit their exposure to liability, more injured workers are turning to their lawyers to help them gain fair compensation. As these cases grow in popularity, more states will likely see a rise in lawsuits related to negligence and other industries within the state.
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