Many insurers have sites on which they provide general information about their companies and sometimes also their policies, but quotes can normally only be obtained by phone. These sites are essentially just advertising mediums.
Three organisations offer quotes while on-line. InterSure and The Insurance Club allow viewers to complete transactions on-line by filling in proposal forms and providing credit card details. With DataMatters, on the other hand, this is only possible for travel insurance. Deals for its other products, which will shortly also include life assurance, must be finalised via a freephone number.
Dealing via the Net can offer greater speed and flexibility than operating through a broker or directly with many insurers. The facility is available 24 hours a day and viewers can obtain unlimited quotes in their own time. A policy can be effected immediately, without having to wait for forms to arrive in the post. Only a handful of insurers can match this. Some of the terms on offer are also highly competitive, because insurers are not having to pay staff to answer the phone and issue quotes.
Some of the best deals are aimed at computer users. InterSure's computer insurance, an extended warranty providing a maintenance agreement and accidental damage cover, will provide a PC costing pounds 1,200 with three years of cover for pounds 235. Someone taking out similar cover at a high street electrical chain is likely to pay at least 25 per cent more.
The Insurance Club's Cyberhome, a household policy designed to cover the computer user at home, is also attractively priced, around 10 per cent less on average than if bought through normal broking channels.
On travel insurance rates, a 25-year-old woman on a two-week holiday in Europe would pay pounds 32.95 for cover via Thomas Cook. She would pay pounds 21.10 and pounds 13.85 via DataMatters and InterSure respectively, although some telephone insurers come close.
Rates for household insurance should not be ignored, either. A 35-year- old man in Bristol could obtain pounds 100,000 buildings and pounds 20,000 contents cover from InterSure for pounds 195.42. Brokers and direct insurers will quote between pounds 220 and pounds 260.
With other products, dealing on-line is not always the most cost-effective route. Also, there are many factors other than price to be considered when choosing insurance. The selection of policies on sale on the Net are not representative of the numerous special issues and add-ons available in the marketplace as a whole. However, Mark Bates, managing director of InterSure, forecasts: "Systems that start to offer a broad cross-section of the market could appear by the end of this year, and economics of scale will see rates become lower still. Within 12 months, the Net will offer a complete choice at rates cheaper than those of any other distribution channel."
Price comparisons must be made bearing in mind the costs of using the Net in the first place. Users normally pay about pounds 10 per month, plus the cost of phone calls. Buying a computer can add thousands to the cost, although nobody will shell out solely to obtain cheap insurance.
Most Internet customers are between 21 and 40, and show an above-average tendency to renew existing policies and to take out other, different forms of insurance via the same route. They are, on the other hand, highly reluctant to join in the first place. InterSure issued 10,000 motor quotes during the first half of 1996, but a mere 0.5 per cent of these resulted in policies.
Lack of familiarity makes people more reluctant to give out their credit card numbers over the Net than over the phone or to a waiter in a restaurant, although the sophisticated encrypting techniques employed should ensure that it is safer. David Newton, for The Insurance Club, says: "It would take a government and a bank of multi-million pound computers and geniuses to crack it. If such an organisation exists, surely it would be better deployed in more profitable avenues"
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Type of insurance
Motor, household, wedding, travel, pet, computer
Motor, travel, householdReuse content