The Evolution of Short-Term Insurance
The practice of insuring goods is almost as old as civilisation itself. Early records exist of the first Babylonian shipping merchants making provision for the transport and potential loss of goods. Insurance has come a long way since its early maritime roots but in essence it’s still a transactional arrangement by which one party provides guarantee or compensation for another party’s loss or damages.
From its early beginnings to where we find ourselves today, short-term insurance has evolved into a multi-dimensional service sector with an array of offerings. The three biggest factors influencing the short-term insurance industry are; technology, social-economic factors and the environment. How we adapt and evolve despite the challenges that these factors pose, is essential for long-term success and effectiveness.
Evolving with Technology:
Due to the rapid pace at which technology is advancing, insurance companies have had to continually evolve their processes and policies to stay both relevant and effective. Insurance companies across the board need to embrace both the challenges and opportunities that technology presents. Technology has enabled the insurance industry to become more efficient and accurate in administering claims and calculating premiums. The automisation of data capturing and claims processing has the potential to make short-term insurance more accessible, affordable and accurate. Insurance companies are faced with the challenge of embracing new technology without losing their identity to a systems-driven approach.
Evolving with the environment:
Climate change has had a global impact on the nature of short-term insurance. It has changed both the natural and socio-economic context within which short-term insurers operate. The change in weather patterns is already affecting South Africa and recent droughts and floods have had a negative impact on our agriculture and infrastructure. Climate change globally and particularly in South Africa has necessitated the evolution of short-term insurance policies and offerings. Practicing effective hindsight and foresight can help short-term insurers to adapt to these unique challenges. Also see this article on the effect different seasons have on insurance claims.
Evolving with socio-economic structures:
Globalisation and socio-economic shifts continually impact industries from all spheres and the insurance industry is by no means exempt from the challenges that these shifts present. In South Africa, one of the key challenges that short-term insurance companies face, is to cater for clients from very diverse cultural and economic spheres. Lack of education and poverty excludes many of the most vulnerable groups from the benefits that short-term insurance can hold. Affordability also plays a role and the challenge in South Africa is to present insurance solutions that are accessible to South Africans from various socio-economic backgrounds. Short-term insurers are faced with a challenge to present accessible solutions without increasing their own liability or that of the party involved.
BellRyck Financial Group
At Bellryck we believe in promoting long-term relationships with our clients. We are continually evolving our offerings to offer a diverse range of financial advisory services that are current and on par with the latest trends in short-term insurance. We view the unique challenges that technology, the environment and our socio-economic landscape pose, as opportunities to grow and evolve our offerings.
Contact us today to learn more.