Internet Investor: Direct route for your insurance

Buying instant

insurance over

the Internet

offers clear


There are fewer

forms to fill in

and the details

are accurate

since e-commerce

means there is

no rekeying

of the data

FIRST DIRECT believes there will be an explosion in our use of computers to manage our money over the next decade. According to Mori research conducted for the bank, within 10 years more than a third of all current account holders in the UK, nearly 12 million people, expect to use the Internet or similar technology to arrange their finances.

To put that forecast in perspective, fewer than one per cent do so at the moment. The survey also showed that 13 per cent of current account holders already have access to the Internet, up from 5 per cent in 1996. First Direct's own PC Banking service does not operate over the Internet but instead uses its own private network.

Separately, Eagle Star Direct reckons that sales of "cyber insurance" - insurance cover bought over the Internet - will increase by 260 per cent over the next 18 months. This sounds far too exact a forecast to be taken seriously. However, it has to be said that, with the number of Internet connections steadily rising, Eagle Star Direct is surely correct in assuming some significant increase in such business.

It is on this basis that the company has extended the range of insurance it offers on the World Wide Web to include home and contents cover, adding to its existing motor and travel insurance websites. In fact, Eagle Star Direct's motor insurance site has received more than 100,000 request for quotations in its first 10 months.

As with the other sites, you may purchase home and contents cover directly and immediately, 24 hours a day, through payment by credit or debit card, completing the online application form. The site is interactive, allowing you to select your own preferred level of cover.

Demonstrating why Eagle Star Direct expects more business on the Internet, the company is offering anybody purchasing their home and contents insurance from the site a 10 per cent reduction in its standard premiums. A further discount of up to 10 per cent is on offer if your home passes certain security criteria. Full details of these are available on the site.

However, Eagle Star Direct was not the first to offer household insurance over the Internet. Earlier this year, Woolwich Insurance Services unveiled an online market search, select and buying system. The service provides real-time comparative household insurance quotations, as well as allowing you to buy a suitable policy on the spot.

Woolwich Insurance Services claims that its online service allows you select the best policy for your particular requirements, rather than simply providing a price-based comparison. In fact, the service is exactly the same as that on offer in certain Woolwich branches.

Providing you are satisfied with their Internet quotation, the policy can be arranged by paying for the initial premium through an online credit card transaction. If, however, you need personal assistance before you make your choice, there is an option to be connected to a trained advisor to assist you during the course of the search and transaction process.

Buying insurance direct over the Internet offers clear benefits to you as a consumer. Fewer forms need to be filled out by the customer and in turn, the e-commerce nature of the system ensures accuracy as well as speed, since information will no longer need to be filled in by hand and rekeyed by data entry staff.

There is, of course, a concomitant downside to this. If there is a mistake in your policy details, you cannot blame anyone else!

Eagle Star Direct:

Woolwich Insurance Services: Direct PC Banking Demo: