Ineas benefits from e-commerce opportunities, 03/12/99

Ineas is one of the first insurance companies to fully rely on the Internet as their main distribution channel. They are already online in The Netherlands, soon to be followed by the German and Belgian market. 

According to Niek Ligtelijn, founder and director of Ineas Insurance Company, this company makes optimally use of the opportunities offered by the Internet. "Contrary to other companies with online insurance facilities, Ineas was set up solely for the Internet, so our internal organisation is totally designed for E‑commerce."

The "first fully interactive European insurance company" was launched on the web last month. Starting with policies for personal liability and home, Ineas will eventually offer a wide variety of insurance products, at first in The Netherlands, with other European countries like Germany and Belgium going online shortly afterwards.

Goal however was not to be the first, but to be the best online insurer on the market.

"The concept of our site is based on three core values, "reliability", "personal control'' and "transparency", in order to offer the possibility of arranging insurance efficiently, at any time and directly", according to Niek Ligtelijn. The launch was carefully planned and the site was thoroughly tested by web engineers and a test panel of consumers and experts. Userfriendliness, accessibility, speed and clear organisation of the site were particularly appreciated. But the final and decisive judgement will be made by the customers of Ineas.

330 Billion dollar
Ineas has already come a long way. To start an organisation that totally relies on the Internet is very adventurous in the somewhat conservative insurance world. Founder Niek Ligtelijn explains why he prefers this interactive channel to the traditional distribution:
"Marketing a product in the financial sector today is a complete different story than it was some years ago. The time to market was shortened considerably, shopping on impulse has become more important than ever and the logistics should be completely logical. On the other hand we see that many financial products like insurance policies have become convenience goods. Consumers are no longer satisfied with traditional distribution patterns. This gap is filled by the Internet and E‑commerce". Not only the use of the world wide web is growing tremendously with approximately 18 million users every month across the world but also the amount of money spent online. The estimated Internet turnover in Europe for next year is 1,970 million dollar, world wide estimates even reach 330 billion dollar. Surveys in the United States and European countries show that the opportunities for the insurance sector are particularly promising.
Doing business on the Internet demands a radical new customer approach. Main difference is the shift from push to pull marketing. Ineas has turned their distribution channel completely upside down, putting the customer in control of the process.
Ligtelijn: "Being a direct writer on the Internet doesn't mean that our goal is to be the cheapest on the market, offering low levels of service. Our prices are competitive but we don't have the ambition to have the lowest. Service is very important to us, and the Internet offers great opportunities. Via the Internet it is possible to have a direct, interactive relation with customers. Still many people undeservedly refer to the world wide web as a cold and impersonal medium. With our PRIMES facility on our website we advise visitors on risk management, tailored to their personal situation, and within seconds. This can be achieved by offering him tools that help him analyse his risk, decide how to prevent or limit these. Only in final instance will he decide whether or not to insure the residual risk. Prospects get a personal quotation instead of the usual price list. For customers we have a conventional helpdesk to assist them. We want to give each customer personal attention, the feeling that he or she is very special to us," Ligtelijn says. 

Visual vs. virtual
Of course direct distribution is not a new phenomenon on the insurance market. In the UK for instance, already 50% of all car insurance is sold by telephone, in The Netherlands 30%. Although direct insurance is still less popular in countries like Germany and Belgium, growth of this segment of the market was already expected in 1995, eventually leading to a share of around 10‑12% in these countries. The growing number of Internet‑users will increase these percentages significantly. Customers use it to request quotations and compare prices. They benefit the most, because the market is much more transparent for them. The disadvantage for insurance companies is that customer loyalty will be more difficult to obtain. In addition, contracts with shorter terms (approximately one year) that we see nowadays in the insurance business, enable customers to switch more easily.
An important issue in marketing the Ineas‑brand is the difference between visual and virtual. The Internet is often referred to as digital, virtual, not real. In order to build trust, which is essential in the insurance branch, you are to make clear that your company is real, visual.
This is also one part of the added benefit of distributing insurance via the internet. Basically, you take an abstract, conceptual insurance product and make it visible to the client.
The client is in control when he applies for the insurance policy and able to double check the data he provides. He can administer his complete insurance portfolio via internet having an overview of his policies, premiums, coverage even those that are not of Ineas. The crucial point in insurance is claims and claims settlement. Here again the customer can control that his claim is being handled promptly and thoroughly as he can follow online progress of the settlement and all contacts with the various parties involved in the claim whether it a straightforward one or intricate one. In addition various tools and advice is provided to support the decision making process of the customer. Again it is a matter of visualising what risks clients run.