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In light of the country’s challenging economic conditions, the short-term insurance industry will be under pressure this year to continue its double digit growth that the sector has experienced over the last couple of years. The arrival of various new players in this industry will continue to make the sector increasingly competitive as more options are introduced and are now available to consumers – especially when it comes to direct insurance.
Over the past five years alone, the short-term insurance industry has seen various changes take place. These changes can be attributed to a number of different factors that have impacted the insurance industry in recent times including: changing weather patterns, a rise in the use of social media and advancements in technology. In order to adequately provide for clients’ needs, insurance providers and brokers alike need to ensure that they keep up with this continually evolving market.
While robo-advice and direct insurance remain big competitors to insurance providers, the broker model is certainly not dead when it comes to short-term insurance. In many instances a personal approach to insurance can be the biggest competitive advantage providers have to offer. Many people do not want to spend their time online, comparing quotes and dealing with call-centres to get their short-term policies in place. We believe that PPS target market still enjoys the personal touch a broker brings to the table to handle insurance queries and claims on their behalf. The middle-man is still king in our industry.
There is still a vast majority of consumers in the market who prefer to build a relationship with a broker who understands their needs, have regular face-to-face meetings and provide the client with sound advice and flexible policies to fit their individual needs. These clients are usually the ones who want to feel empowered and in charge of their financial position and value the advice they get from their broker.
However, many consumers do still underestimate the benefits of using the services of an insurance broker. People view insurance as a grudge purchase until an incident occurs and they realise the real benefit of the purchase and why they should rather have used the services of a broker. Many people also believe they can follow a one-size-fits-all approach when buying insurance in the hopes that a basic policy will cover them sufficiently, however this can be a huge mistake when it comes time to claim and the policyholder finds out they did not have sufficient cover in place.
In today’s environment, client retention is key to a successful business. In cases where the client has gone through a broker, we find that the client is much more likely to stay with the provider their broker selected as the best for many years.
The short-term insurance industry is in a very volatile situation at the moment and PPS Short-Term Insurance decided to take the risk this year to transform its business model to become a short-term insurer. The company invested vast amounts of time and conducted proper research before taking this risk. Following the successful growth of the business, paired with a better understanding of the specific risks of the graduate professional market, the business has entered the next phase of its strategic roadmap.