Insuring surfers

Still haven't bought your holiday insurance? Why not surf the web? You also might just find a better policy for your car.

Companies are at last beginning to offer online policies. One of the latest scoops is Ineas, an insurance company offering a pure Internet product (www.ineas.be). Ineas entered Belgium in February, after conquering the Dutch market, and plans to carve out 1 to 2 per cent of Europe's insurance market. This Dutch start-up is offering two insurance policies on line: family liability and home insurance, to be joined shortly by cover for cars. To reach its objective, Ineas is relying on the Internet - no mailings, no call centres. Former Fortis international executive Niek Ligtelijn put the idea together three years ago. He then persuaded Crédit Suisse and Swiss Rea, as well as Century Capital (US), to come on board to the tune of five million euros start-up capital.

Ineas remains the exception on Belgium's insurance scene. The very nature and complexity of insurance products mean that the sector has not yet been seriously shaken by the Internet wave. Even so, the potential is there and it is big. Forrester Research predicts that more than 4.30 billion euros worth of insurance will be sold online in Europe within three years. A major feature of online insurance purchases, aside from speed, is cost reduction. Again, according to a Forrester Research study, the Internet distribution channel can produce savings of 20 per cent. Seizing this opportunity, Smap has created a site (www.smap.be) where price offers have been available online since June 1999. Would-be clients can take out policies if they like the conditions. "Cover is effective once the customer has subscribed on Internet. But the contract has to be sent by mail and signed, as Internet signatures are not yet legally valid," says Smap general secretary Marc Bolland. Smap's first Internet steps date back to the spring of 1998. Then surfers could consult the site for prices on the full range of the company's insuranceproducts. Daniel Verjus, director for retail non-life products, reels off a list ofproducts to which customers can now subscribe online: "Smap assistance, personal liability insurance, teachers' insurance, drivers' insurance and home insurance, with car insurance to follow shortly." Other companies have followed suit.

One of them is Corona (www.corona.be), which used this year's car fair to launch its online car insurance (following funeral insurance, which went online in November 1999). Forrester Research believes that car insurance could attract the greatest number of online subscriptions, counting for two-thirds of the 3.5 billion euros of Internet insurance sales in three years' time. The explanation is simple: car insurance is one of the first policies that young people take out. And most young people are web-literate. KBC (www.kbc.be) is also offering online indicative prices for home insurance, but this is currently no more than a cost projection. The contract must still be drawn up and signed in a bank branch. As at Ineas, the advantage of the method lies in the immediate response. Proposals from other companies arrive by mail or by e-mail within 48 hours. It can, in fact, take longer. Customer enthusiasm for online quotes has taken certain companies by surprise, and their sites have been overwhelmed with cost projections. CB Direct (www.cbdirect.be) has solved this problem by displaying its call centre phone number when its site is full. It is still hard to put figures on the results of these net initiatives. "We have no specific objectives," Verjus (Smap) admits. "Some 100 to 150 contracts have been subscribed on the net. Which does not make it a priority channel. On the other hand, the number of site visits has shot up, from around 2,730 in January 1999 to more than 12,600 in January 2000."

Alongside the traditional insurance players, two new companies have entered the market with a precise goal: to create a site where surfers can compare insurance companies' products and prices. Assurweb.be and Eccent.be (see Trends International April 2000) have both taken their inspiration from the US site, Insweb. Over two million visitors to Insweb have entered their data, compared offers and opted for a particular insurer. "We are not brokers, because we do not sell insurance. We are an independent contact point between the client and the insurance companies. We define ourselves as info-brokers," says Danny Lein, who with partner, Paul Janssens, presides over Assurweb. For both teams, independence is crucial. This means there is no advertising. Where do they make their money? "The insurance companies pay us a certain amount for every offer routed to them through us," says Assurweb's Stefan Uytterhoeven. The business model is identical at Eccent. The Assurweb site has three parts. The first provides information and answers general insurance questions. Part two is insurer selection. The surfer enters personal details and selects suppliers, who are asked to submit proposals. The surfer can then compare those proposals and find the most suitable. Once a decision has been made, the potential client is directed to the site of the particular supplier, who will conclude the contract. Part three is for more specific questions: here the Assurweb team will be proposing a panel of experts to answer client's specific insurance questions. These will be sent to three persons, in many cases insurance brokers. Assurweb itself will screen the replies to ensure that they answer the questions and that they are not biased.

Direct insurers' reactions to Eccent's or Assurweb's proposals are relatively enthusiastic. "They boost our Internetpresence and complement our own site," says Verjus (SMAP). Eccent is in negotiations with six companies, while Assurweb has announced a partnership with four companies - Smap, Touring Assistance, Corona and Actel Direct. Assurweb islooking to increase this number to ten by year-end. Eccent's product received a very positive welcome from direct insurer Partners. "With Eccent's help, a new car insurance site will be set up this month," says Alfons Claes, who heads up Partners' sales production department. "On top of this, we are hoping to open our own site towards the end of August, offering car, fire, family and hospitalisation insurance." Assurweb, which is looking to expand to two other countries before the end of 2000, is now comparing two types of insurance on its site: car and life insurance. Eccent will also begin with life insurance.

Won't

all these comparisons cause insurance prices to tumble? Haerens (Corona) argues, "Customers already go price shopping. Whether by phone or by Internet, it makes no difference. And the price aspect is not the only element of the sale. The type of cover and the services provided also play an important role." Nor is it always possible to produce comparative tables, as proposals sent by e-mail reflect each company's own formats and presentation. Applications routed via Assurweb, and shortly also Eccent, also require good administrative follow-up. Corona nearly collapsed under the weight of 600 to 700 enquiries coming from Assurweb. Poor interfacing between Assurweb and Corona meant that the date encoded on the Assurweb site had to be manually re-encoded at Corona in order to produce the proposals. But glitches apart, the two new arrivals are worrying less Internet-minded insurers. To the delight ofsurfers.