NEW YORK, Nov. 7, 2016 /PRNewswire/ -- The Risk Management, Insurance Advisory and Consulting industry has continued to strengthen since the recession, as demand for industry services has risen. As a result, industry revenue is expected to grow at an annualized rate of 7.0% to $32.8 billion over the five years to 2016.
For the full report, visit IBISWorld's Risk Management, Insurance Advisory, and Consulting in the US industry report page. The Risk Management, Insurance Advisory and Consulting industry is composed of operators providing insurance services on a contract or fee basis to insurance companies and other clients engaged in underwriting or reinsuring policies. Over the past five years, the industry has posted strong revenue growth as the economy has continued to strengthen since the recession. According to IBISWorld Industry Analyst Evan Hoffman, "A consistent increase in corporate profit and an increase in downstream insurance activity, especially with the passage of the Affordable Care Act, has sustained revenue growth over the five years to 2016." Typically, insurance markets move through eight-to-10 year cycles in which insurance premiums rise or fall in price. However, the onset of the recession prevented prices from increasing and insurance funds kept prices low to attract new business through heightened price competition. Therefore, profitability fell as demand for insurance products was slow to rise and low prices prevented insurance funds from recording strong profit growth. However, more recently, insurance premiums have been trending upward, causing industry profit margins to balloon. Consequently, demand for risk management, insurance advisory and consulting services has risen, leading to strong profit growth for industry operators. Industry revenue is expected to grow an annualized 7.0% to $32.8 billion over the five years to 2016, with expected growth of 3.2% in 2016 alone. Over the next five years, conditions are expected to continue to be favorable for industry operators. "Insurance premiums will likely rise, boosting their spending power and increasing demand for industry services," says Hoffman. Furthermore, stronger construction activity and new regulation (i.e. the Patient Protection and Affordable Care Act) will boost demand for services. Overall, industry revenue is forecast to continue growing during the five years to 2021.