Insurance trend

The advent of the Internet has caused earth-moving alterations in the way we communicate, acquire, transfer and share data. Cyberspace, where the Internet revolves around, has, on its own, created a virtual marketplace that triggered the start of the Electronic Business or Electronic Commerce Revolution. This new method of doing business has been an evolution to our ways and means.

Companies in every industry partook of this break to sell their products and services because of its cost-effectiveness. One of the major industries in the Philippines that saw this as a business opportunity is insurance.

Data showed that the much-needed insurance products in the Philippines are fire and motorcar. These are among the highly purchased line of insurance products by both retail and corporate consumers, contributing approximately 70 percent of the total business generated by the industry. Agents and brokers, generally known as intermediaries, are still the main link between insurers and the insured. Traditional sales and servicing methods are still the main fashion for business transactions, although technology has already been utilized with the use of e-mails or text messaging to disseminate information. It is evident that the end-users have also embraced the changes.

So can this new method of e-Insurance really provide better service to the end-users?

Simpler insurance products. To date, not every insurance product is being sold online. Several protection products that are less transaction-intensive have been designed to specifically cater to over-the-counter or online purchasing. This is one of the first steps undertaken to create public awareness.

Customers can now have a simpler and better understanding of what they are purchasing. Often in the past, too much industry and legal jargon had been used, intimidating end-users into purchasing – or not. As we simplify our products, it becomes easier for customers to appreciate the benefits of their insurance.

With industry competition intensifying, providing new and simpler insurance packages has also been a great way to beat out competitors while providing the public with better and more comprehensive services.

More efficient insurance processing. An obvious example of what benefits one can gain with the use of the Internet is the amount of time spent to procure an ordinary insurance policy. Instead of sending a car registration to the insurer to get a quote on motorcar policy, customers can get instant quotes, choose specific coverage, and even read full definitions and descriptions of unfamiliar terms all in real time. An online transaction speeds up the processes to send and receive replies.

In addition, the oftentimes tedious procedure of claims can also be filed and tracked online, making it more convenient for the insured. The thrust of the service providers is to automate the claim processing activities to offer 24x7 communication access for customers. But ease of use and accessibility are only icing on the cake. The main goal is to increase accuracy and efficiency to provide swift and just settlement, which everybody knows, is the showcase window of an essential insurance service.

The key result is the enabling of the direct processing of information to the back office without redundancy, thus promoting smooth, uninterrupted flow of work.

Cheaper insurance. But for the best part, premium rates tend to drop because of the lower administrative cost necessary in acquiring and servicing to close the sale. While resources used – including manpower and materials – are greatly lessened due to efficiencies, there is marked improvement in customer service.

Although still in the infancy stage, time will come when e-Insurance will become an accepted business norm as the Internet continues to become more prevalent in the local community. Online transaction was designed mainly to provide a better choice for consumers – keeping in mind that our customers deserve only the best.

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Sherman Yap is CEO of Yapster e-Insurance Brokers Inc (www.2InsureAll.com), a member of Yapster e-Conglomerate Inc. You may contact him at [email protected].