Online insurance: Cheaper but impersonal too

Online insurance has taken off in the last couple of years amid the economic crisis, thanks to its being more flexible and, above all, cheaper than conventional programs drawn up through insurance brokers.

Today, at least one in every 12 car insurance contracts is arranged directly through the Internet, but the rapid expansion observed in the sector means that in five years the share of online insurance could reach 50 percent, according to a report published earlier this week by the National Confederation of Greek Commerce (ESEE).

Most online insurance offers focus on auto insurance, which is the driving force behind the sector’s expansion for the simple reason that it is the only compulsory form of insurance. Major insurance companies have embarked on aggressive advertising campaigns to promote their online programs, which are far cheaper as they cut out the middleman. Policies agreed on the Internet can be up to 50 percent cheaper than conventional ones.

“Insurers are promoting online insurance programs for vehicles and property assets, helping it grow at a rapid pace,” says Elena Barzouka, a car insurance agent with Omega Insurance Brokers in Athens.

According to Google Search, there was a 37 percent increase in the number of times users in Greece looked up online insurance in the first eight months of the year compared with the same period in 2012.

Furthermore, Greek consumers are starting to view electronic commerce in a much more positive light, which means that, among other things, they are more inclined to purchase insurance over the Internet. The fact there are no known cases of online fraud concerning insurance policies has also helped the sector’s reputation.

Last summer there was even talk of Greece’s creditors forcing the government to introduce compulsory home insurance against earthquake damage. “If that does happen, although we have not heard anything about it since then, it could be another driver for online insurance. In fact insurers have already prepared forms for such a prospect so as to have them ready when and if it becomes compulsory,” says Nikos Sideris, an independent insurance broker.

Is everyone happy with their online contracts? “No, not at all. We have had several clients who chose to purchase car insurance on the Internet for six months but have now returned to us,” says Barzouka, who believes that the advent of online policies does not spell the demise of the insurance agent.

“Getting your car insured over the Internet means that you will not be dealing with an agent who knows your own needs. It becomes impersonal as you will only be dealing with a call center. The personal relationship between the broker and the client is lost,” Barzouka argues. And why would that relationship be so important? “Because most Greeks have no insurance conscience. They do not look out for the policy details in print contracts, let alone the online ones. They don’t even know what each policy covers and we have often been told they had picked something online that does not suit their needs.”

“The job of the broker is all about personal contact,” adds Sideris, noting that he has often been asked to broker policies with online insurance providers.

“If you are about to look for a contract on the Internet you’re going to have to search carefully and allocate plenty of time to that process in order to get what you want, otherwise you will just go to one company website, see what it offers and make no comparisons. After all, conventional car insurance is also getting cheaper anyway,” concludes Barzouka.

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