This article takes a look at the growth in light van insurance. It’s likely that demand has not peaked yet, as more shopping moves online. Alan Inskip, Tempcover founder and CEO, offers some insights;
The digitalisation of the UK economy continues unabated, with 2021 e-Commerce sales of non-food products up more than 14% when compared to the previous year. In 2019, the split between UK e-Commerce and physical retail was 22% and 78% respectively.
That gap is expected to close to 38% and 62%, ultimately pushing e-Commerce sales in the country up to a record £185bn. In fact, online shopping is so popular that over 4.1bn parcels were delivered in the UK in 2020-2021 period, up almost 50% from the previous year.
A correlated rise in demand for vans
The light commercial vehicle market is also enjoying a healthy growth spell – with 2021 registrations up more than one fifth (21%) on the previous year. This represents over 62,000 units more than 2020. A total of 355,380 new light commercial vehicles were registered in the year, ending with the best December for the sector since 2015 with a 7.8% increase.
The rise in e-Commerce purchases and subsequent increase in demand for home deliveries have undoubtedly played a central role in this trend.
In a time of immense economic uncertainty, this boom in demand for courier services has created essential employment opportunities and has helped new start-up businesses (and those forced to shut their doors or significantly reduce their footfall) to gain quicker access to a wider market. It has also created a more convenient experience for online shoppers.
More than half (55%) of UK consumers shop on the web, with the most popular online purchase being fashion and apparel. But a massive 82% of consumers are not prepared to wait more than five days for their product to be delivered after ordering it online, with one in nine (11%) saying that anything longer than two days is a deal breaker.
This places tremendous pressure on the entire value chain, but especially on the courier, who is expected to meet challenging delivery deadlines from both the seller and the consumer. With more products being delivered within increasingly strenuous timelines, there is always the risk of an accident, which can have a severe impact on the entire e-Commerce value chain.
The growing need for more flexible and adaptable courier insurance
Courier drivers are legally required to purchase courier insurance to cover the vehicle for business use. This provides cover for first party and third party damages while transporting goods. But traditional fixed-term courier insurance, much like other fixed-term commercial and personal insurance policies for that matter, can often prove to be frustratingly inflexible when it comes to policy duration.
In the digital age of business, flexibility and agility is an essential trait for any courier, and temporary courier insurance adds value by fitting entirely in line with the demands of the business during peak and quiet times.
Couriers do not need to commit to amending their annual policy for additional drivers and risk raising their premiums in uncertain trading conditions, while self-employed couriers who work on an ad-hoc basis can get fully-comprehensive cover for just the time required – anywhere between one hour and 28 days. And it takes just 90 seconds following a simple digital quote and buy process, thereby enabling them to scale up or down quickly without incurring long-term costs. An added benefit is there’s no risk to any existing no claims discount, as it’s a separate and standalone policy.
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