6th December 2023
Is short-term insurance a fad, or a sound long-term investment for the future? It is certainly gaining traction across the insurance industry providing many benefits for the customer, but is it here to stay and is it the right move for brokers?
Changing consumer behaviour
Short-term insurance has surged in popularity in recent years, reflecting the shifts in customer preferences and the evolving landscape of modern lifestyles. The traditional long-term insurance model built around annual policy commitments doesn’t allow for the increased flexibility that customers are looking for or the ability to quickly adapt their coverage to a changing situation.
An introduction to Short-Term Policies?
Instead of long-term annual plans, short-term insurance offers coverage from as little as 1-hour to a few days or even a few months. Data from Temp Cover shows that Short-Term Policies (STP) have grown over 300% since January 20201, with car insurance being the most popular. One in five drivers having applied for a short-term policy in the last two years, with 46% saying they wanted to drive someone else’s car as a reason for the application2.
What are the broker benefits?
Though still seen as a niche offer, with the demand for flexibility and tailored coverage increasing, STP is moving into the mainstream. Does it deliver benefits for brokers as well as consumers?
Attract New Customers
The introduction of short-term policies into a broker’s portfolio creates more choice and opens up flexible options for their customers. Short-term coverage can appeal to customer segments who do not usually purchase traditional insurance products, and by including it in their product offer, Brokers will be able to attract a wider range of clients with varying insurance needs. This will create more profitable revenue streams and ultimately drive growth for the business.
Customer Retention
Similarly having short-term policies available for a current customer can also have a positive effect on the broker. Brokers can showcase their flexibility in meeting the unique needs of their customers, building trust, and promoting loyalty. Customers who are impressed with the brokers’ flexible product offer and efficient service are more likely to return for any future insurance needs.
Brand Reputation
Furthermore, brokers who embrace short-term policies demonstrate their ability to stay ahead of and adapt to the changing trends within the insurance market. By staying ahead of the curve brokers can positively position themselves at the forefront of the market and be recognised as being responsive to the changing needs of their customers.
Efficiency
Once STP is established within the broker it can involve a more simplified underwriting process and fewer documentation requirements. This streamlined approach increases broker efficiency while also reducing the barriers to purchase for their customers. A simplified customer journey allows the broker to serve a wider client base without a reduction in the quality of service.
The emergence of short-term policy insurance represents a shift in the insurance industry, bringing benefits to both consumers and brokers. As consumers increasingly seek flexibility and customized coverage, short-term policies provide a solution that aligns with their dynamic lifestyles. For brokers, embracing short-term policies opens new avenues for growth, diversification, and enhanced customer relationships. In the ever-changing landscape of insurance, the adoption of short-term policies is not only here to stay but represents a strategic move toward meeting the evolving needs of today’s insurance market.
Get Short Term Policies with Mobius
Short-term insurance is the latest tech innovation available on Mobius.
An easy-to-use technology solution allows you to control STP in the palm of your hand. Take advantage of all the broker benefits available when you include short-term insurance within your product portfolio.
Find out more about how Mobius and short-term insurance can give you a springboard into profitable new markets.
Contact us now at respond@opengi.co.uk
