New Recession Proof Products & Services | Travelers Insurance (2024)

New Recession Proof Products & Services | Travelers Insurance (1)

By Travelers

3 minutes

Small Business Resources

New Recession Proof Products & Services | Travelers Insurance (2)

The U.S. economy officially entered a recession in February 2020. During challenging times, when money is less available, people’s spending habits change. To be successful, you may want to consider whether there are other products and services that make sense for your business to offer.

To give your business a better chance to succeed during an economic crisis, think about the products and services you can provide that people always use, regardless of the state of the economy. Then think about ways to offer them at a more affordable level. This may be necessary until things begin to stabilize and people feel more confident about spending money.

Here are some examples of products and services that have historically performed well during a slowing economy:

Consumer Staples

It doesn’t matter what the economy is doing when it comes to certain types of products. Individuals will always need “staple” items, even when times are tight. Selling these items at a fair price won’t necessarily make your business more money, but it can help ensure regular customer traffic and the possibility that people may be tempted to buy more expensive items, allowing you to potentially cross-sell more profitable items.

Food
Everyone needs to eat and offering some food items can be a great way to expand your product offerings during an economic downturn. Pre-packaged food items, like chips and cookies, offer shelf-stable options to help ensure your stock doesn’t go bad as you’re building consumer awareness of your expanded offerings.

Personal Care Items
Toothpaste, deodorant, shampoo, toilet paper, and other grooming and personal care items are always in demand. Offering these types of items can position your business as a vital resource for consumers during tough times.

Cosmetics and Related Services
People want to look good, even when times are tough. They may not be able to afford a new outfit or pair of shoes, but it’s usually possible to try a new nail color or get a makeover. Businesses that supply these types of products and services typically make it through recessions.

Pet Care Products and Services
Pets are members of the family, and they’re treated like it. People tend to continue spending money on their pets, including products, medical services and grooming, even during tough times.

Clothing
People still wear clothes during recessions. Clothing, underwear, socks and shoes wear out. If your business carries necessary clothing items, it will likely do OK in tough times.

Baby Items
People keep having kids, even during recessions, and children are priority No. 1 for parents. They’ll keep spending money on things like clothing, diapers, formula, pediatric care and child care services.

Services

Some service-focused businesses are always in demand, even when other sectors of the economy are struggling. While they may require some special knowledge or licensing, offering such services may make sense for your business.

Hair Care
People might get their hair cut or colored less often during recessions, but they typically don’t give up on it altogether. Personal grooming services are often deemed a necessity versus a luxury.

Automotive Parts and Services
When people are out of work or their pay gets cut, they may be hesitant to invest in expensive new vehicles. Instead, they may be more likely to spend money on keeping older cars in good repair. This is good news for mechanics and businesses that supply auto parts.

Recreation

People still need to find ways to relax, and lower-cost options for recreation are in big demand during difficult economic times.

Camping Gear
People may shy away from planning fancy vacations during times of economic hardship and turn to less expensive options, like camping, instead. During challenging times, the demand for things like tents, coolers, camping stoves, sleeping bags and fishing gear goes up.

Movies, TV and Video Games
Going out on the town can be expensive. An evening indoors typically is not, and may be the only option for recreation when pandemic restrictions are in place. People still need entertainment, and inexpensive options such as webcast performances, movies, TV, and video games experience an increase in demand.

Final Thoughts

One other thing that’s known about economic challenges: Less expensive products– or those that deliver significant value for the dollar– tend to outperform. Focusing on items that provide exceptional value can help you think about what you should consider adding to your business offerings.

An economic crisis can be very difficult for companies to get through, but countless businesses survive them. Finding the right combination of product and service offerings is a key part of making it through theeconomic challenges brought on by COVID-19.

New Recession Proof Products & Services | Travelers Insurance (2024)

FAQs

Is the insurance industry recession proof? ›

There is no one answer to this question as the insurance industry can be affected by a number of factors, including economic recession. In particular, it can be difficult for companies to find new customers and compete against larger companies when the market is off its normal path.

What is the most recession-proof industry? ›

Historically, the industries considered to be the most defensive and better placed to fare reasonably during recessions are utilities, health care, and consumer staples.

What product is in demand during recession? ›

Toothpaste, deodorant, shampoo, toilet paper, and other grooming and personal care items are always in demand. Offering these types of items can position your business as a vital resource for consumers during tough times. People want to look good, even when times are tough.

What are the three things that are recession proof? ›

  • 5 Recession Resistant Industries.
  • Consumer Staples.
  • Grocery Stores/Discount Retail.
  • Alcoholic Beverages.
  • Cosmetics.
  • Death and Funeral Services.
  • The Bottom Line.

Is insurance adjusting recession proof? ›

Recession Proof.

While no profession is 100 percent guaranteed recession-proof, being an insurance adjuster definitely comes with high job security. People and businesses always need insurance, and many times it's required by law.

What is going on with the insurance industry? ›

The business of insurance, which once was stable and predictable, isn't that way anymore. Growth without sacrificing profitability is challenging, climate change is irrevocably impacting certain risk profiles, distribution needs have become truly omnichannel and customers expect products tailored just for them.

What sectors thrive in a recession? ›

There are also fundamental services that consumers can't do without, even in hard times.
  • Accountants. ...
  • Healthcare Providers. ...
  • Financial Advisors and Economists. ...
  • Auto Repair and Maintenance. ...
  • Home Maintenance Stores. ...
  • Home Staging Experts. ...
  • Rental Agents and Property Management Companies. ...
  • Grocery Stores.

What is profitable during a recession? ›

Recession-proof businesses typically have at least one of the following characteristics: Sells essential or mandatory goods, like food, diapers, or hardware supplies. Offers necessary public services, like shipping or toll-road servicing. Provides crucial repairs, like plumbing or electrical repairs.

What jobs get cut first in a recession? ›

Who loses jobs in a recession? Recessions cause people to lose jobs in lots of different industries. During the Great Recession, the unemployment rate hit 10%. Construction and manufacturing often have to cut back on jobs more than other industries, but tech companies can also get hit by layoffs.

What gets cheaper in a recession? ›

Because a decline in disposable income affects prices, the prices of essentials, such as food and utilities, often stay the same. In contrast, things considered to be wants instead of needs, such as travel and entertainment, may be more likely to get cheaper.

What businesses do not do well in a recession? ›

Starting a small business is always a risky proposition. And during a recession, the risk is even greater. But certain businesses are more recession-proof than others. Five businesses to avoid starting during a recession include luxury retail, hospitality, manufacturing, construction, and home services.

Who makes money during a recession? ›

Financial advisors and accountants are recession proof businesses because they offer essential services that individuals and businesses need, regardless of the economic conditions. For example, during a recession, people and businesses may face financial challenges such as budgeting, debt management, and tax planning.

What is the best asset to hold during a recession? ›

Still, here are seven types of investments that could position your portfolio for resilience if recession is on your mind:
  • Defensive sector stocks and funds.
  • Dividend-paying large-cap stocks.
  • Government bonds and top-rated corporate bonds.
  • Treasury bonds.
  • Gold.
  • Real estate.
  • Cash and cash equivalents.
Nov 30, 2023

What good comes out of a recession? ›

A recession may provide for a real cash savings on real estate, for personal or business benefit. Businesses that lease may find that landlords are willing to negotiate on terms and provisions during this time period, as they grow concerned about a protracted downturn and increased vacancies.

How to make money recession-proof? ›

Recessions can also push you to reexamine your finances, develop passive income streams, and consult financial advisers to make sure your assets are safe.
  1. Cut living expenses. ...
  2. Build an emergency fund. ...
  3. Develop new skills. ...
  4. Speak with a financial adviser. ...
  5. Create passive income sources. ...
  6. Start a business. ...
  7. Consumer staples. ...
  8. Bonds.
Jan 5, 2024

How do insurance stocks do in a recession? ›

Insurance companies tend to do well during a recession because they offer something that people need whether the economy is good or bad. Case in point, Markel saw earned premiums increase 17% year-over-year in the first quarter to $1.7 billion.

Why are insurance companies struggling? ›

“There are several factors, but all of them come down to the high loss ratio companies are experiencing. Since the end of the [COVID-19] lockdown, supply chain issues and backed-up shops have caused the costs of all claims, including minor claims, to skyrocket.”

Who is recession proof? ›

Financial advisors and accountants are recession proof businesses because they offer essential services that individuals and businesses need, regardless of the economic conditions. For example, during a recession, people and businesses may face financial challenges such as budgeting, debt management, and tax planning.

What are common criticisms of the insurance industry? ›

Top 10 Criticisms of Insurance Companies
  • Failure to pay claims properly in accordance with policy provisions.
  • Failure to use compliant policy forms and/or compliant plans.
  • Failure to properly acknowledge, pay, investigate, or deny claims within specified time frames.
  • Improper documentation of underwriting files.
Sep 27, 2012

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