E-Commerce and Insurance Industry

sunandaC

Sunanda K. Chavan
E-Commerce and Insurance Industry

Web based commerce involves conducting and managing business on the net. It embraces all stages in trading cycle from information exchange on policies, relationship building to sales. The general observation in the insurance industry is that the insurance are beginning to embrace the internet but as compared to other industries such as the retailing industry insurance players have been slow to get on e-commerce in a big way.

• Auto sector leads the way: Currently the most common use of the Internet technology is for the distribution of personal insurance. Some sites also allow for multiple quotes thereby reducing the shopping time.
• Commercial lines and e commerce: If Internet applications in personal lines are still limited in commercial lines they are yet to take off. Insurance products for the large corporate buyers have to be customized.
• Sale of life insurance over the net: It is estimated that less than five percent of total individual life and individual annuity sale occurs on direct basis with a insignificant percentage sold over the net. The biggest barrier is the complexity of products and the necessity to raise consumer awareness. It is clear that the insurers view the Internet as a tool to improve the productivity of existing distribution and increase the level of customer satisfaction rather than as a direct source of sales.
• Health care organizations are gradually beginning to offer and realize services over the net. It is believed that over time as more people are bale to access the internet health plans will see greater participation in open online enrollment services, driving costs lower as the plans avoid printing and mailing paper forms.
 Key Issues
The insurance industry has to address the following concerns over the next five years.
• Security: Consumer attitude towards security must improve before they start transacting online.
• Regulatory issues: As a regulated business insurers maybe limited in their inability to fully transact insurance business online and unwilling to market aggressively online.
• Technology improvement: The ability to bind policies will improve with speed of data transmission.
• Building of Brand Name: E-commerce initiatives will most likely be geared towards retail customers making brand name an important attribute, which in turn will increase customer confidence and quality of service
 
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