In 2021, the United States Census Bureau identified the South and West regions of the U.S as the fastest growing regions in the country, with cities like Dallas experiencing explosive growth. In fact, eight of the top 15 fastest-growing cities between July 1, 2020, and July 1, 2021, were located in Texas or Arizona according to the Census Bureau, further cementing the growing economic power of the Southwest region. This rapid growth presents an opportunity for insurance agents and brokers, as businesses from hospitality to healthcare to transportation grow to meet the needs of an expanding population.
The Southwest has lured young, tech-savvy individuals from across the country with affordable, available land, and a relatively low cost of living. This has, in turn, led to an increased customer base across industries as the new population fuels business growth through their work and leisure activities.
Energy, for example, is a rapidly growing sector in the region, with massive wind and solar energy projects and natural gas pipelines helping to fuel a sustained boom. Advanced manufacturing is also thriving, as is healthcare – one of the driving forces behind business growth in the Desert Southwest, which includes parts of Arizona, California, Nevada, New Mexico, and Texas, as the area's second-largest employer (723,263 workers according to another Census Bureau report).
Geographically speaking, Austin, Texas, has emerged as a tech and entertainment hub, while Houston has become a leader in the life sciences sector, highlighting how different areas produce different opportunities – including opportunities for insurance agents and brokers, as there is opportunity to grow alongside these budding businesses.
With existing insurance expertise, plus local and industry knowledge, agents and brokers can serve as invaluable partners for new entrants into the market. Those looking to capitalize on this expansion should consider which regions and industries are seeing growth – after all, not all areas in the Southwest are seeing equal development, so knowing where to best allocate resources is fundamental for agents and brokers looking to capitalize on this phenomenon. Effectively identifying these growth areas can create excellent opportunities for agents and brokers to drum up new business or to expand existing accounts as the need for insurance coverage in the region grows alongside the population.
Ultimately, this demographic shift is creating new opportunities for insurance agents and brokers, and they should seek to align with carriers proficient in these industries, established in these regions, and capable of delivering the breadth of programs and services that growing markets and businesses demand.
Tim Rau, CPCU, is Senior Vice President, Southwest Regional Executive Officer at Chubb.
The opinions and positions expressed are the authors’ own and not those of Chubb. The information and/ or data provided herein is for informational purposes only and is not a substitute for professional advice. Insurance coverage is subject to the language of the policies as issued.