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Online Insurance Market Set For Growth

online insuranceInsurance can be sold through a variety of mediums: face to face, over the phone and online. Europe’s online insurance market is currently growing and is set to reach an approximate value of £21,149,575,000 by 2016. This is excellent news for all performance marketers who are involved in the finance vertical. A recent report from a large consultancy firm studied 78 insurers across Europe and it revealed that £10,151,796,000 worth of property, casualty and life insurance policies were sold online in 2012. In 2013, only 11% of ‘total annual new business premium volume’ came from online markets – this figure is estimated to increase to 18% by 2016.

The insurance market is not the only sector that is witnessing a boost in digital sales – it’s happening all over. For example, sites such as Amazon and eBay are driving online sales of a whole range of items, from clothes to electronics. The convenience is too easy for most consumers. Why go out and buy a t-shirt if you know what size you are when you can just get it delivered through your post box in a matter of days? Piercarlo Gera, global managing director at Accenture said: “Consumers are becoming increasingly unwilling to buy a product or service that does not provide the same levels of convenience, simplicity and speed to which they have become accustomed from many other services they use every day.”

The insurance market’s growth is not just happening all by itself. The insurers themselves are helping drive the surge via their own investments, with 78% of insurance companies starting to increase their technology budgets over the next 5 years. On average, insurers will be spending £22,841,541 as part of this digital overhaul. Over half of the insurers in the survey are prioritising investment into big data management companies with only 38% deciding to factor mobile technology into their budget.

89% of the surveyed insurers felt that the online market will become tougher over the next 3 years. A fair few insurers have commented on the saturation of the market, putting it down to ‘outsider’ companies such as Amazon and Google, who are making their own movements in the insurance market. Accenture’s managing director Jean-Francois Gasc commented on the situation: “The threat posed by emerging competitors such as internet giants is real because user-experience improvement is part of these companies’ DNA, and this is a strategic weapon in gaining market share in the insurance distribution business. To maximise value from digital markets, insurers will need to move from a product-centric culture to a customer-oriented mentality.”

James Savery, 21 October 2013

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