Personal Finance: Internet Investor

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The Independent Online
MORE THAN one million UK households have access to the Internet, and 10,000 more are signing up for the first time every week. These numbers might strike you as more of those statistics bandied around by nerds to impress those of us in the real world. No doubt they are. However, they are also true. In fact, if anything, it would appear that they are something of an understatement of the case.

Dixons, which launched its free Internet service in September, is claiming 475,000 customers for Freeserve in eight weeks. Even assuming a substantial proportion of these customers are switching from other Internet service providers, this is phenomenal growth.

Whether it is the kind of growth which justifies the insane stockmarket ratings of internet stocks in the USA is another matter. For the record, launched on the NASDAQ market this month and saw its shares rise sevenfold on the first day of trading, rocketing from $9, and hitting a peak of $97 before closing at $63.50.

Only a handful of Internet businesses are making any money at the moment. While rewards may well be substantial in years to come, there is no way they will be substantial enough to justify this kind of share price behaviour. If you want to make money out of the Internet right now, your best bet would be to float a website business in the USA and cash in your shares straight away. It is highly unlikely that anybody who paid top dollar for an Internet investment is going to get rich any time soon.

Nevertheless, the level of web access in the UK has begun to reach critical mass, and a lot of serious money is being invested by companies looking to do business with us.

Among the major high street banks, Lloyds has at last established its online service and, uniquely among UK-targeted online banking services, it is available to those of us who use Apple computers. I will be reviewing this service in detail another time.

It has also been a week of anniversaries. Both Screentrade, the UK's first comparative internet insurance service, and Legal & General's Interplan, launched as an online mortgage account, celebrated their first birthdays and did so by extending their services.

Screentrade's new addition is travel insurance, displaying the best quotes available from three major UK travel insurers with all the key information contained on a single page. You may compare prices and features, select the one that best suits you, and then go on to buy the policy online. The insurers currently offering travel policies through Screentrade are Bishopsgate, Norman and Folgate, with AXA to follow shortly.

Its motor insurance service offers a range of 16 products from a panel of seven insurers: Norwich Union, Royal & Sun Alliance, Zurich, Bishopsgate, Folgate, GAN, and ITT London & Edinburgh. Home insurance is provided by: Independent, Zurich, Eagle Star, and AXA, with Commercial Union and Folgate joining in the near future.

If you have any queries regarding Screentrade's policies which are not answered on-screen, there is a helpline (0345 573 686) which is available between 8am and 8pm, Monday to Friday, and until 6pm on Saturday. When you enter the site, you are given a personal reference number which allows you to access any quotes you have generated again any time in the next 30 days.

Legal & General's Interplan service now allows customers to get on-line valuations of their unit trust and PEP investments, based on the unit price at the close of trading on the previous day. Interplan was originally established to allow L&G's Flexible Reserve mortgage customers to take direct control of their mortgage accounts. More than a fifth of Flexible Reserve mortgage customers now use Interplan.

Legal & General is also raising the level of security for Interplan, offering an enhanced level of encryption, using a 128 bit secret key, which, according to Netscape, is 309,485,009,821,345,068,724,781,056 (309 quadrillion) times more powerful than the previous level of encryption. It all sounds very impressive, but you will need to using Netscape Communicator 4 or later, and Microsoft Internet Explorer 3.02 or later, as a browser to be able to take advantage of the increased security.



Robin can be reached at

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