Deloitte forecasts US P&C insurers' fee-based revenue will grow at 12.6% CAGR to 2030

By Mia MacGregor

June 9 - (The Insurer) - Fee-based revenue for U.S. property and casualty insurers is expected to rise from $21.6 billion in 2023 to $49.5 billion by 2030, with a compound annual growth rate of 12.55%, according to Deloitte.

As the potential for alternative services grows and customers demand predictive and preventive offerings, fee-based services are anticipated to account for a larger share of insurer revenue, Deloitte said.

Customers are becoming more aware of the financial benefits of risk management for their assets, prompting insurers to consider changes to business models that traditionally focus on retrospective risk analysis, Deloitte added.

The company noted that this could lead to the emergence of significant new revenue streams.

Currently, P&C insurers generate the majority of their revenue from insurance premiums and investment returns. Even among those who monetize additional services, Deloitte noted that many do not exceed 3% of their total revenue.

Deloitte highlighted that any substantial increase in service revenues could represent a “drastic shift” for the industry.

“If insurers can provide services based on their expertise and extensive breadth of data, they will likely find more impactful and sustainable long-term growth,” the company stated.

Deloitte emphasized that in light of new technological advancements and the increasingly complex and costly risks faced by customers, the greatest value will likely come from developing more sophisticated predictive and preventive services.