Insurers venture online
(CHANG TIANLE)
01/18/2002
While banks and security firms have high expectations from online business, insurance companies are remaining conservative, despite the fact that most insurers have had a presence on the Internet since 1997, with some starting online sales and services. A recent survey of 1,000 people in Beijing, Tianjin, Shanghai, Guangzhou, Harbin and Wuhan, may well explain the embarrassment. According to the study, only 35 per cent of the respondents reported being aware of online insurance services, while 46 per cent claimed no knowledge of such services, and 19 per cent said their awareness was vague. When asked whether they would use online insurance services, a total of 47 per cent of the respondents said they were willing to try these services, while 20 per cent preferred conventional sales methods and 33 per cent liked the idea of combined online and conventional sales tools. The security of online payments was a concern for 66 per cent of the respondents. Of the respondents, 44 per cent said they would prefer to pay premiums in cash, 38 per cent preferred to use the bank debit system and 18 per cent said they would opt for credit cards. Underdeveloped system "The barriers are there," said Li Feng, an official with China Insurance Regulatory Commission Shanghai office. "Low computer and Internet penetration, less financial sophistication and an underdeveloped payment system all prevent insurers from expanding their online business." The most important factor, he stressed, was people's preference for face-to-face sales and services when dealing with insurers. "Most types of insurance, especially life insurance, may not become successful online products," he said. It may prove difficult for providers to get people to trust the idea of getting health insurance online, for example. "It's tricky," says Amy Qian, 24, after trying an insurer's online product. "You have to reveal a lot of personal information about various medical conditions when applying for a health insurance policy. It's hard to find a good deal when buying health insurance online because it's generally hard to find a good deal on health insurance anywhere." Customer friendly Insurance companies have realized this and have moved toward offering highly-simplified and standardized products online. American International Assurance recently launched its online service, which only includes three products. PA18.com, one of the most successful insurance websites run by Ping'an Insurance, is proud of its online cargo-insurance. It allows customs to buy cargo insurance, verify the policy and fill out and submit the application form online. Traditional transactions that once required several hours to complete now take roughly five minutes. The round-the-clock services offered by websites enable customers to buy insurance and submit claims at any time anywhere. "I think it's better for insurance companies to look to the Internet as a new channel rather than a sales one," said Li. Xu Zhengguang, general manager of AIA Shanghai Branch, echoed this view. "The new e-business platform is another custom service channel of AIA, which I hope, will enhance the mutual understanding and communications between our policy-holders and AIA. It is part of our efforts to better serve our clients, which I believe, is the key to sharpening our competitive edge in the post-WTO era." As to individual insurance buyers, finding the best price for an insurance policy may be getting a little easier, thanks to insurance marketplaces like eBao.com, which is open to both insurance companies, agents as well as individuals. By using eBao.com, individual insurance buyers can objectively assess their insurance needs, get product comparisons, purchase insurance products directly, and receive customer service through eBao's professionally designed individual risk assessment tools, product comparison tools, and insurance company and agent storefronts. It also allows agents to enhance their professional image, develop new customers, and manage customer information through their customized eBao storefronts, online management tools and professionally tailored industry information. "Ebao has a very successful business model," Li commented. "This is clearly an industry that has not seen a lot of direct price comparison in the past." According to Li, the Internet is making the insurance industry more efficient. It is allowing companies to save money internally - savings that consumers hope will be passed on to them.
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