The insurance sector Is looking strong coming out of the recessionFebruary 15
These days, you can get insured for almost anything and the world wide web has in part produced a highly transparent and competitive market place for insurer services. The law requires that customers purchase certain types of insurance such as car insurance or medical insurance in many countries. Other insurance not required by law is seen by most as a ‘must have’ such as home insurance or insurance for corporate property and business assets. There is then another type of product focused mainly on the consumer market that is highly specialised such as pet insurance, wedding insurance or Insurance for adventure holidays or extreme sports. Either in the high street or on the internet, businesses tender different excesses and policy prices dependent on many different things. There is also a secondary market for the services of insurance brokers who act as agents buying products at the behest of their corporate or consumer clients. Another service offered primarily through agents is underwriting.
This is where the insurance venture’s risks are calculated and the underwriter decides what the insurer should charge for their services or whether to insure at all. To take the example of car insurance, the underwriter would take a detailed look at a driver’s accident record. Another example might be medical insurance where the patient’s health is taken into account. The mass take-up of the internet definitely helps the insurance marke remain competitive and transparent but many customers are even now finding themselves without cover in times of emergency. Extreme winter sports insurance demonstrates this well. It is reported that more than half of holidaymakers to winter skiing destinations have no insurance and although the other half do, less than a quarter of them are actually covered for skiing and snowboarding which are classed by most insurers as ‘extreme sports’ and excluded from their plans. Many European travelers also think that their E111 will cover them for treatment but this is not the case in most resorts. Another interesting example of The adaptation of the insurance sector is the relentless price war between opposing travel insurance firms that has been largely facilitated by the mass uptake and use of price comparison sites. Car insurance is required by law so It simply must be bought by every individual with a car. This makes price the primary competitive factor.
An example of negative activity in the insurance market was when payment protection insurance policies (PPI’s) were discovered by the FSA to be either useless or having been fraudulently sold to customers. This has caused a storm of litigation from customers and firms being created for the single purpose of acting as legal assistants so that customers can claim back any PPI that is covered by the FSA’s investigations. Compare travel insurance online to give the best deal. Another questionable product is internet security insurance that claims to refund the subject for losses on account of cyber fraud or identity theft. However many people are unaware that the bank is more than likely liable for such acts.
15 Feb 2012 | 4:51 pm | Uncategorized
