The second installment in our series on Unique Risks For Evolving Industries addresses the risks of wellness industry entrepreneurship and the need for self-employed insurance in a post-pandemic landscape
Unique Risks For Evolving Industries is a six-part educational series crafted to help insurance agents navigate the unique risks of industries that have evolved in a post-pandemic world. Each month, Bold Penguin will explore one unique industry that was significantly impacted by the social and economic shifts of COVID-19. We’ll discuss how the industry has evolved, trends, associated risks, and actionable tips to ensure the entrepreneurs of today are protected. February’s focus addresses the risks of wellness and self-care industry entrepreneurship and self-employed insurance in a post-pandemic landscape. The complete Unique Risks For Evolving Industries 2025 Report will be available in July.
Contributed by Nicole Farley, SVP, Agency & Carrier Operations at Bold Penguin. As SVP of Agency and Carrier Operations, Farley works to streamline the small commercial quoting experience for agents and small business owners, working closely with several large enterprise partners and carriers to achieve mutual short and long-term goals and objectives.
Few industries have experienced such massive, recent growth as the wellness industry. Fueled by an unprecedented awareness of mental health, an increased interest in esthetics, and a boom in fitness training, global growth continues in the self-care and wellness industry with seemingly relentless momentum. That means increased interest in, need for, and growth of self-employed insurance in this vertical – but we’ll get to that later. First, let’s dig into the trend.
The Global Wellness Institute’s (GWI) Global Wellness Economy Monitor 2024 states, “The research finds that the wellness market grew from $4.6 trillion in 2020 to $5.8 trillion in 2022 and reached a record $6.3 trillion by the end of 2023 (9% annual growth). “
In their report, the Institute reaffirms the wellness industry trend, continuing, “Market sizes in nine of the 11 wellness sectors have well exceeded their 2019 levels. The sectors with the most powerful annual growth rates from 2019 to 2023 are: 1) wellness real estate (18.1%), 2) public health, prevention, and personalized medicine (15.2%), and 3) mental wellness (11.6%).”
This trend is not limited to these industries. Each wellness sector experienced this massive growth. Below, we’ll examine the factors spurring this boom in the wellness space and the huge opportunities it represents for entrepreneurs and the insurance agents that support them with self-employed insurance.
GWI’s report on the wellness sector shows that an aging population coupled with a renewed pandemic-era focus on health has driven this trend. COVID-19 brought about a material, lasting shift in priorities. People reprioritized, placing a higher degree of importance on community and personal well-being. GWI continued, “Numerous global surveys have found that wellness matters more to people each year post pandemic.”
A recent Future of Wellness survey by global consulting firm McKinsey reaffirms this, discovering that “Fifty-eight percent of U.S. respondents to our survey said they are prioritizing wellness more now than they did a year ago. [Furthermore consumers] are taking greater control over their health.” McKinsey additionally predicts in The Future of Wellness: Connected and Customized that “Consumers [will] intend to keep spending more on products that improve their health, fitness, nutrition, appearance, sleep, and mindfulness.”
This trend is still on the upswing five years after COVID. While many wellness trends in the past have proven to be fads, the focus on self-care and physical and mental wellness looks to be here to stay. The Institute’s press release states, “because the trends fueling the wellness economy —an aging population, chronic disease, widespread mental unwellness— will only accelerate, the GWI predicts that the industry will grow a rapid 7.3% annually from 2023 to 2028, when it will represent 6.8% of global GDP. The market will reach nearly $6.8 trillion in 2024 and nearly $9 trillion in 2028 (nearly double its 2019 size).”
Wellness matters to people more now than it ever has. Unprecedented growth in demand for services like personal training and therapy, skincare, and mental health is the result. The U.S. Bureau of Labor Statistics projects double-digit growth from 2023 to 2033 (much faster than the average for all occupations) for the following wellness occupations:
What has also become clear is that entrepreneurs and small business owners are perfectly positioned to address the demand for wellness goods and services – but they also must protect themselves. This entrepreneurial journey could have started as part of a personal self-care routine that became a “side hustle” or a sole source of income. It might have started online or in the home, in a rented space, or in a practice facility. Many of these pandemic-born entrepreneurs gravitated to the field because they were passionate about wellness, to earn extra income, or all of the above. Regardless of their path, wellness entrepreneurs’ investments need the protection of self-employed insurance. Insurance carriers and agents are working together to provide the proper coverage.
From a risk perspective, entrepreneurs in self-care and wellness are very similar to other established commercial entities. Agents can do more than provide self-employed insurance –they can provide wellness entrepreneurs with much-needed support. Here’s how:
Awareness of what could go wrong is half the battle in risk prevention. Agents can share real-life examples of financial loss that could have been avoided if proper risk mitigation techniques were in place. For hands-on service providers like massage therapists or estheticians, that means more than just self-employed insurance. Brennen Grone, Executive Vice President of Sales with Rainbow, recommends that agents share tips, for example, “annual background checks, dedicated safety practices, proper sanitation practices, and client waivers,” as starting points for protecting the financial stability of the business.
As stated earlier, this growth trajectory will continue for the foreseeable future. Successful entrepreneurs entering the wellness field now will likely grow with the industry and add additional services as part of their growth plan. It’s important to take the time to find and recommend the right self-employed insurance coverage as they expand their services. This means that as their businesses grow, your business will grow as well. Grone continues, “Agents can help [business owners] navigate and understand exclusions [and] sub limits and help avoid a potentially uncovered or partially covered claim.” That kind of expertise will solidify your role as a trusted advisor and partner to their success.
It’s important for agents to stay abreast of regulatory and legislative changes as the wellness industry evolves. Also, educate yourself on changes in carrier appetite for self-employed insurance policies so you can be ahead of the curve when it comes time for renewals and remarketing. Share knowledge on market trends and scenarios that could threaten their investments. Take the time to address the misconception that “side hustles” don’t need insurance. Discuss the differences between personal and commercial policies for home-based businesses. Educated conversations like these will strengthen your relationship with the business owner and set them up for success.
Each business is unique, which means its risks are too. Most will require foundational coverage as part of a self-employed insurance policy, regardless of location or the size of the business. “Professional liability is a must-have for any operator in the [wellness] space. For example, whether being at risk of an allergic reaction or accidental injury [during fitness training], a properly classified professional liability endorsement can save a business owner or entrepreneur from a catastrophic financial loss to their business,” continued Grone. “It’s also important to understand the exact scope of services offered as well as where and how the business operates.” Click below for more tips on how to get to know wellness entrepreneurs like fitness trainers or those who sell consumable beauty products.
The wellness industry’s growth presents exciting opportunities for entrepreneurs, and with those opportunities comes risk. As an insurance agent, your role is about becoming a trusted partner in your clients’ long-term success. By understanding the specific risks they face, advising on risk mitigation, and anticipating their evolving insurance needs, you position yourself as a strategic advisor in this emerging space.
With the wellness industry projected to continue its upward trajectory, agents who stay informed, educate their clients, and provide tailored self-employed insurance solutions will help entrepreneurs safeguard their investments.
Wondering how to start? Click below to download a convenient list of questions to consider when discussing coverage with your prospective entrepreneurial wellness business clients.
The preceding article is part two of a six-part educational series crafted to help insurance agents navigate the unique risks of industries that have evolved in a post-pandemic world, with the purpose of keeping commercial insurance agents abreast of industry trends. The complete Unique Risks For Evolving Industries 2025 Report will be available in July.
Contact Bold Penguin with questions about this series or how we can work together.
The second installment in our series on Unique Risks For Evolving Industries addresses the risks of wellness industry entrepreneurship and the need for self-employed insurance in a post-pandemic landscape
Tips to avoid the pitfalls of tempting, but short-sighted, cheap insurance that could have potential negative consequences for the insured and the agent
EMPLOYERS workers’ compensation insurance joins growing list of specialty carriers available in the Bold Penguin Terminal