Nowadays the opportunities provided by the Internet are widely used by the participants of financial services market. A number of services financial institutions provide through the web is constantly growing. Insurance companies also try to stay in touch with the latest achievements of the technological progress offering a service of online insurance.
Online insurance is a modern tool aimed at promotion of insurance products. Insurance companies as well as intermediaries in the USA quickly picked up the trend and now demonstrate brilliant results in this segment. The success is easy to explain since online insurance solves a lot of problems both for the insurers and the insured.
Perhaps, the most important advantage is a convenient and flexible way to purchase an insurance and save more time. A person looking for insurance has a fine opportunity to choose the policy and calculate its cost independently without a noisy consultant nearby. The client is not limited with one company, since it is possible to compare alternative offers from different insurers that are available via Internet too. There are multiple ways to perform payment: bank card, electronic money or cash. The option of personal delivery is at the client’s disposal too. Moreover, there is no need to communicate directly with the insurance company employees who frequently provoke clients to choose an insurance product that is more profitable to the insurer and not the consumer.
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Insurance companies consider online insurance patterns a way to reduce costs that may lead to the insurance rates liberalization. Operating in a real office the insurer must pay rent, salaries, commissions and cover many other costs that are included into the policy price. Instead, virtual office requires minimal expenses represented mostly by the commission for an intermediary that sells policies. Finally, the ultimate policy price may be reduced by 5-20%. That’s why cutting costs the insurer receives more resources for investment into other areas of its activity.
However, online selling has some drawbacks. The main of them is the problem of concluding an agreement and performing the payment. The delivery is made either by courier or by mail.
The courier brings the client two copies of the agreement to sign. One copy is for the client and another one is returned to the insurer by the carrier. The purchase is paid in cash to the courier.
According to the second option the client receives two copies of the contract with insurer’s signature and stamp by mail. One is for the client and the other is sent back. The payment is made via, say, bank transfer. But in case the letter is lost it will be difficult for you to prove the fact of shipment.
However, the right solution does exist. Many companies provide a policy certified with an electronic signature via Internet. The payment is made by means of electronic payment systems or by plastic cards like Eurocard/Mastercard, VISA, etc.
As a consequence, online insurance provides the client with an opportunity to design an insurance policy independently, taking his own needs and financial capabilities into consideration. Additionally, the customer receives a complete toolkit for making the most careful decision when buying the insurance, while the insurance company benefits from the inflow of clients, premium growth, cost reduction thus occupying more solid market positions.