Insurance covers almost everything these days and the internet has created a highly transparent and competitive market place for insurer services. Some insurance is required by law such as car insurance or medical insurance in some countries. Other insurance not required by law is viewed by most people as a ‘must have’ such as home insurance or insurance for a person’s business interests or property belonging to their business. Then there is a third class of insurance aimed mainly at consumers that is highly specialised such as pet policies, wedding insurance or certain types of extreme sports insurance. On the high street or online, businesses tender different excesses and policy prices depending on various factors. There is also a secondary market for the services of insurance brokers who shop around for products at the behest of their consumer or corporate 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 premium and cost of the insurance or whether the agreement is viable at all. To take the example of car insurance, the underwriter would assess in detail the driving history of the customer. Another example might be medical insurance where the patients sickness record is examined. The introduction of the internet greatly helps the insurance sector remain competitive and transparent but some customers are even now finding themselves without cover when they most need it. A good example of this is winter sports insurance. The industry believes that over 50% of holidaymakers to winter skiing destinations have no insurance and although the other half do, only a quarter of them are in fact covered for skiing and snowboarding which are classed 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 interesting example of The way the insurance market is adapting is the hot pricing competition between opposing auto insurance firms that has been in the main 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 makes price the primary competitive factor.

A recent negative example in the sector was when payment protection insurance policies (PPI’s) were discovered by the FSA to be either useless or having been fraudulently sold to customers. This has caused a storm of litigation from customers and firms actually being set up 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 greatest bargain. Another questionable product is internet security insurance that claims to refund the subject for any loss as a result of cyber fraud or identity theft. However many people are unaware that the bank is more than likely liable for such acts.