Hold on to your short-term insurance – here’s how

Assets do need cover against risks, even in a slow economy when desperate consumers feel the urge to cut expenses wherever they can.

Currently, doing any form of business is extremely challenging as economic pressure continues and the macro and regulatory environments continue to change. The impact of these challenges is reducing consumers’ disposable income and consequently, some are cancelling their insurance policies during a time where it is most valuable.

Families’ disposable income is reducing significantly. Some consumers question the necessity of maintaining premiums for short-term insurance. Thus, insurers see an increase in lapsed policies which not only negatively impact the industry, but also increases the number of the uninsured population, with the potential of causing significant socio-economic issues.

Negotiating a fair monthly premium

Disclosing all your risk information can have a big impact on your premium. Name the security measures you have in place. Your previous insurance history can also count in your favour, as insurance companies will reduce your premium if you are a good risk and do not claim unnecessarily. Indicate which vehicle you drive the most – in this way you can have a reduced premium on that vehicle which is used less.

Keep your building maintenance records as proof that you are avoiding risks. For example, maintaining your roof will reduce or prevent water damage when it rains. Also, take some time once a year to make sure that you review your policy schedule and that you don’t have any unnecessary items on your policy which you have already sold. This will save you some dollars. Update the serial numbers of your all risk items to make sure you cover all your items most in use.

If you want to pay less, you need to manage your risks so that you may pay a fair premium and avoid any unnecessary increases.

Insurers try their best, too

Insurers have a limited amount of influence on the macro conditions and will need to focus internally on what they can control - managing the cost of doing business to assist in improving margins. This can be achieved through the effective use of data, and improved decision-making concerning risk selection, workforce, and system optimisation.

Good quality data and technology can also assist the insured to get the premium they deserve. Insurers can reduce management expenses through faster onboarding processes, better risk selection and pricing, improving the clients’ experience by eliminating errors on documentation and spending less time buying insurance. Also of importance is improvements in operational efficiencies through process automation as well as improving the reputation of the industry. When fewer claims are rejected due to incorrect data, customers are happier.