SELLING INSURANCE ON THE INTERNET

Mon, 26 Feb 2018 09:50:10 +0000

By Chungu Katotobwe

LITERATURE contains different definitions for insurance products online marketing. In some cases, the impact of the internet on insurance cover marketing has been underestimated, or was simply understood as a substitute for ordinary or classical marketing. From today’s reality, this view can no longer be upheld.

The major task of insurance online or internet marketing is to draw attention to one’s own web presence and to monitor visitor behaviour through various insurance products. A company should therefore, define its online marketing strategy in clear terms and set measurable goals.

Goals can include amongst others, increased awareness of insurance products or higher profits or revenues. Unlike traditional marketing, internet marketing can often be much more precise, cost effective and more effectively controlled. As a rule, a balanced online marketing mix, and classical marketing should be considered.

The development of information and communication technology is progressing rapidly.  The rapid increase in internet usage will definitely continue, given increasingly powerful mobile phones and devices, and the availability of web access.

Many insurance companies are taking advantage of this development. Business investment in online marketing is growing by double digits every year. This growth shows a concentration of advertising spending on online insurance marketing.

This growth patterns in internet marketing is, naturally, of great significance to the insurance industry. The internet is already being heavily used to meet the high needs for information surrounding the insurance industry and such use can only be expected to increase.

Every insurance company worth its sort, has a website, and offers a variety of online information, even allowing customers to manage their policies and take out new ones online.

Amongst other challenges of online insurance transactions is the issue of electronic signatures. There are two primary forms of electronic signatures namely digital signatures and stylus signatures.

Digital signatures are based on public key cryptography. Through this, the signer uses a private key that transforms the data into unintelligible form and the recipient uses a public key to decipher and verify the data. Digital signatures protect the security and privacy of on line transactions.

On other hand, stylus signatures work in the following manner: the signer moves the stylus or pen across a computer screen, which displays an image that traces the movement of the stylus.  The signer sees his or her signature as it is being captured by the computer, just as a signer sees his/her signature on paper.

It is unique to the person using it. It is capable of verification. It is under the sole control of the person using it. It is linked to data in such a manner that if the data are changed, the digital signature is invalidated and it conforms to existing regulations.

One may ask; is digital signature technology secure? Can it be altered by other individuals, such as an agent or an underwriter? Is the transmission confidential?

Generally, digital signatures provide at least two levels of security integrity that is validation that the signature was transmitted in an unaltered state and authenticity, and validation that the signature is true and correct.

These two levels of security are obtained in large measure by the use of unique keys which are entered into the computer program: one by the party generating the electronic document, the other by the signing party.

Changes to the underlying electronic application will render the electronic signatures invalid. Thus, the integrity of an electronic document is protected by these safeguards.

Stylus signatures offer similar safeguards, that is, there are several encryption steps. The process uses secret keys and, to a certain extent, the process is highly resistant to alteration or unauthorised access and use.

Perhaps most important for insurers, the information set forth on the application is locked along with the signature of the applicant and probably agent.

The fact that the application itself is more secure may reduce the possibility that information on that application will be altered.

Other considerations for the insurance industry due to demands on commerce are moving forward to draft and enact legislation on electronic commerce and electronic signatures.

Further, banks and other financial institutions have been developing business systems to fully leverage the capabilities of electronic commerce.

These and other events may cause the insurance industry to be left on the sidelines, watching as other industries and regulatory agencies take the initiative to create new law on electronic commerce.

Given these circumstances, insurance regulators need to examine these new technologies and their application to the business of insurance now.

Some of the advantages and disadvantages of insurance sales and service over the internet are that consumers already have the ability to search the internet for life and motor vehicle insurance quotes on the internet via numerous home pages and other worldwide web sites provided by or on behalf of insurers and agents.Some internet sites are interactive and permit the consumer to provide certain information and allow the agent or insurer to determine eligibility for coverage.

In addition to obtaining quotes, consumers currently have the ability, from at least one motor vehicle insurer, to complete the entire transaction online.

Another motor vehicle insurer provides consumers the opportunity to complete the application online and then forwards the application to an agent located near the consumer to complete the transaction.

Consumers may also browse the internet to locate agents and insurers in their area. This provides consumers the ability to narrow their search for a particular agent, insurance company or specific type of insurance coverage. In many cases, agents advertise the names of insurers they represent and the types of coverage they most commonly provide.

A particular advantage to consumers appears to be accessibility. Often times, consumers may not have the time nor the opportunity to shop for insurance during normal work hours.

The internet increases the opportunities for these consumers to shop after hours and in most cases, a quote can be received within minutes or the next day. The quote arrives electronically, which eliminates the need to personally interact with an agent, which some consumers prefer. Consumers using the internet for the purchase of insurance have the ability to contact their agent or insurer 24 hours a day. Depending on the internet site’s capabilities and response time, this is likely to substantially enhance consumer service by eliminating the delays in obtaining policy information and service. While some insurers already provide 24 hour service via telephone, the internet has the potential to increase this practice.

Consumers already have the ability from at least one company to review their account status to determine when and how much they need to pay for their existing policy.

After checking how much is due, they can make a payment to the company online. This service eliminates the two step process of calling the company to find out how much is owed and then mailing a payment.

Online payment could potentially prevent cancellations as this can be done at any hour of the day without the delay of the postal service.

Many major insurers have indicated they will be able to deliver insurance products and services via the internet in a more cost effective environment.

This may result in lower overall cost of premiums to all consumers if a substantial number are willing to purchase coverage and interact with an agent or insurer electronically. Look out for part VI.