Insurance is available for almost everything these days and the web has in part produced a highly transparent and competitive market place for insurer services. The law requires that customers purchase certain types of insurance such as car insurance or medical insurance in certain jurisdictions. Other insurance not required by law is viewed by most customers as a ‘must have’ such as home contents insurance or insurance for a person’s business interests or property belonging to their business.
There is then another type of product aimed mainly at consumers that is highly specialised such as pet insurance, wedding insurance or certain types of extreme sports insurance. Either in the high street or on the internet, companies offer varying rates and excesses dependant on many different things. There also exists a secondary market for customers to buy the services of insurance borkers who trawl the market for products at the behest of their consumer or corporate clients. Underwriters are another group of agents operating in the insurance industry.
This is where the insurance venture’s risks are calculated and the underwriter decides what the insurer should charge for their services or whether to insure at all. An example from car insurance would be to take a detailed look at a drivers accident record. In medical insurance, another example might be where the patients health is taken into account. The internet is certainly helping helps the insurance marke remain competitive and transparent but some customers are still finding themselves without cover in times of emergency. A good example of this is winter sports insurance.
It is reported that over 50% of holidaymakers to winter skiing destinations are uninsured and although the other half do, only a quarter of them are in fact insured for skiing and snowboarding which are classified by most insurers as ‘extreme sports’ and excluded from their plans. Most travelers to Europe also think that their E111 Is good enough for treatment but this is not the case at most resorts. Another interesting example of The adaptation of the insurance sector is the relentless price war between rival providers of auto insurance that has been mainly facilitated by the introduction of price comparison sites.
We have to buy car insurance as a matter of law so It simply must be bought by every individual with a car. This causes pricing to be the chief competitive factor. A recent negative example in the insurance sector was when payment protection insurance policies (PPI’s) were discovered by the FSA to be completely worthless or having been fraudulently sold to customers. This has lead to a huge amount of litigation through claim back credit card charges companies and firms actually being set up for the single purpose of acting as legal assistants so that customers can claim back any PPI that is covered by the FSA’s investigations. A further dubious insurance product is internet security insurance that promises to refund the subject for losses on account of cyber fraud or identity theft. However most customers do not realise that the bank is in most sets of circumstances liable for such acts.
