Shopping around for the best insurance rates will take no more than a few minutes, if Ireland's insurance sector follows its US counterparts.
At the moment, Irish consumers looking for a deal must ring all the insurers to get the best quote and product to suit their needs or pay a broker to do it for them. This involves substantial time on the phone - often being kept on hold or hoping to get through - and then a wait for the brochure or final quote to arrive by post.
Several US-based websites include real-time quotes from multiple insurers. A consumer simply provides basic information like age, residence, level of cover required and any past illnesses into a secure database. In seconds, several premiums appear next to the name of the insurer. This allows quick price comparisons and bypasses sales pitches.
Insweb.com and quotesmith.com are the two main sites allowing consumers a hassle-free way to make price comparisons between insurance products. This service has proven extremely popular with consumers and lucrative for owners.
Insweb.com, one of the best real-time providers had an initial public offering (IPO) on the Nasdaq stock exchange in July. The offering price for Insweb was $17 (€16.02) per share but it shot to $44 on the first trading day. As of last week it had settled down to $32 per share.
Sites like this have made such an impact on consumers that even the big boys are looking for a way to get in on the act. HewlettPackard and Delphi Information systems recently announced that they have formed a partnership to build the world's first insurance industry portal ebix.mall. The site will carry information on life, health, home and auto insurance and will operate on a "reverse auction" format.
This is where customers set a price for the products and insurance carriers and agents bid for their business. The site is intended to allow customers to obtain policies solely over the Internet, with no need to call an insurance carrier or agent. It is available free to consumers, but insurance carriers pay 50 cents per bid and amounts varying between $10 to $20 if it leads to the completion of a policy.
"Most European insurance companies that provide online quotes only use an e-mail service and given the poor record of companies responding to e-mail queries promptly, the phone is still the best online option," says Mr Michael Hennigan of FinFacts, an Irish business website and gateway.
Following a survey of global insurance Web services earlier this year, Mr Hennigan says only Zurich Financial Services (Eagle Star) and Norwich Union have credible Web services.
Irish insurance sites are closer to European standards than to their US equivalents. Assurelink.ie is the Irish service that comes nearest to providing a price comparison service to consumers here. However, real-time quotes are not available and brokers must send an e-mail to receive quote information from nine life companies.
When insurance quote information is easily accessible there is no doubt it will change the way brokers do business. An article on Assurelink's site says of changes in the American market: "In this world, consumers, not brokers, obtain and compare insurance quotes online. InsWeb, the American leader in this field, doesn't sell insurance, rather it's a website that matches consumers to insurance policies. So far, InsWeb is doing well but what does that mean for brokers?" Some people believe insurance is too sensitive and complicated to be sold online, says the site. Certainly, ensuring that customers know exactly what they're buying is an important issue. However, providing real-time quotes may move consumers towards an affordable insurer who will then provide them with relevant information.
The Irish Brokers' Association (IBA) believes it is only a matter of time before real-time insurance quotes are available in Ireland and regards this as a positive development.
"I'm happy with the type of competition the Web will bring and it will mean brokers can develop stronger relationships with their clients," says IBA President Mr Billy Redmond. "Brokers have to bring added value to the equation for them to have a viable future."
Household and motor insurance is straightforward but there's still a myriad of different product types on the market, says Mr Redmond. "There's still a place for someone like me to advise on the choices and get you a product that is well priced, but that is also the right product for you and your circumstances."
It is essential that consumers have one site to meet their price comparison needs. A situation may develop where every insurer and broker has their own site, which would mean consumers would have to go to each site to find a comparative price.
"It's far more advantageous to the consumer to go to one site to look at insurance," says Mr Redmond. The IBA is hoping to launch its own site, which will act as a brokers' directory, in the next few months.
There is no denying that a full service insurance website will develop in Ireland in line with the increasing demand for products on the Web. According to the report of the Advisory Committee on Telecommunications, the global electronic commerce market (business carried out over the Internet), was worth £22 billion in 1998 and is projected to increase to more than £350 billion by 2002.
The fourth annual Irish Internet Association survey found that of 2,500 respondents, 48 per cent purchased goods and services over the Internet in the past year. The overwhelming majority, 81 per cent, were happy with the overall experience.
The Irish Insurance Federation (IIF) believes that e-commerce is the future in relation to expanding sales of financial services product to the consumer.
"As shopping over the Internet becomes commonplace for consumer durables, so too will it become popular for purchasing financial products, including insurance products," says an IIF spokesman. "Insurance companies can use the Internet as another method of marketing their products and the IIF welcomes such pro-activity in this regard."
It believes that specifically in relation to insurance products, some consumers will always prefer, for personal and professional reasons, to do business face-to face. "The IIF supports this consumer right while welcoming any e-commerce initiative that proves to be a legitimate instrument in expanding consumer choice of financial services and products," he said.
The IIF is also setting up a website that will link consumers to IIF member-company sites and enable browsers to inform themselves of the choices available from a variety of sites.
