Insurance is available for almost everything these days and the web has helped fashion a highly transparent and competitive market place for domestic and global insurers. Some insurance is required by law such as car insurance or medical insurance in certain jurisdictions. Other insurance not required by law is viewed by most customers as a ‘must have’ such as home insurance or insurance for a person’s business interests or property belonging to their business. There is then another type of product aimed mainly at consumers which is more specialised such as pet policies, wedding insurance or insurance for extreme sports such as skiing. Either in the high street or on the internet, businesses tender different excesses and policy prices depending on various factors. There also exists a secondary market for the services of insurance brokers who trawl the market for products at the behest of their corporate or consumer clients. Another service offered primarily through agents is underwriting.
This is where the risks of any given insurance venture are calculated and the underwriter determines the correct pricing arrangement for the insurance services or whether or not insurance should be offered at all. To take the example of car insurance, the underwriter would take a detailed look at a drivers accident record. In medical insurance, another example might be where the patients sickness record is examined. The introduction of the internet greatly helps the sector remain competitive and transparent but some customers are still finding themselves without cover when it really matters. A good example of this is winter sports insurance. The industry believes that over half of travelers to ski resorts travel without insurance and although the other half do, less than a quarter of them are actually insured for skiing and snowboarding which are classified by most insurers as ‘extreme sports’ and not included in their basic cover. Most travelers to Europe also think that their E111 is adequate to get them treatment but this is not true in most resorts. Another recent example of The way the insurance market is adapting is the hot pricing competition between opposing auto insurance brokers that has been mainly facilitated by the mass uptake and use of price comparison sites. We have to buy car insurance as a matter of law so everyone must purchase it. This causes pricing to be the chief competitive factor.
A recent example of a failure in the insurance sector was when payment protection insurance policies (PPI’s) were discovered by the FSA to be negligent drafted or having been missold to many customers. This has generated a storm of legal claims against insurers or certain banks and firms being created for the single purpose of acting as legal assistants so that customers can claim back any PPI that might have been missold to them. Compare insurance online for the best deal. A further dubious insurance product is identity theft 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 in almost all instances liable for such acts.
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