The internet has revolutionised so many industries, and you could almost say it has revolutionised life in general. The insurance industry is no different. Here, we take a look at how the insurance industry has been changed by the internet.
Before the internet, finding insurance meant contacting individual firms for quotes, perhaps scheduling an appointment and gathering information. It was a huge hassle, and you usually (unless you were very, very keen to get a good deal and had lots of time on your hands) ended up going with the first or second firm you came across. You didn’t really have any idea whether there was a better deal out there.
Then, the internet happened.
Now, at the beginning, many companies weren’t sure about venturing online. However, as the internet became more and more accessible, more and more consumers were buying online, so they had to be on the internet, or they’d be losing out on customers.
So How Did the Internet Change the Insurance Industry?
For a start, insurance became much more competitive. With customers able to go from one site to another quickly and easily, they were able to compare prices almost instantly. Companies like Click4quote Ltd began forming, whose main focus is to provide easy access to getting a quote. Someone thought up comparison sites, making this process even quicker. This meant that insurance companies had to lower their prices to beat the competition, making it a much better market for the consumer.
This also meant that information about insurance was more freely available, yet another bonus for the consumer.
On the flip side, the internet gave the insurance industry the opportunity to gather data, and lots of it. From email addresses to location, consumers are giving away data every time they use the internet, which is of great benefit to insurance firms. It presents the opportunity for targeted marketing, that works much better than print adverts or hoping someone sees your billboard before your competitors’.
What does the future hold for insurance companies?
The world is changing quickly, so who knows what kind of insurance they’ll be offering next. In the States, they are considering the renewal of the act that requires insurers to provide terrorism insurance, which is unfortunately fast becoming part of our daily lives.
It’s not all doom and gloom, however, as all this data sharing means that the world is becoming a much savvier, connected place. “From an insurance perspective, what is new and different and critically important about this data is that it can provide a much more accurate picture of the exposures, hazards, and risks of what is being insured,” said Donald Light, director of Celent’s Americas Property/Casualty Practice, and author of The Internet of Things and Property/Casualty Insurance.
“These analytically driven findings create the second critically important consequence of the IoT: insurers can create feedback and control processes to command or request things to change their loss-related behaviour and performance,” he continued.