The insurance sector is still booming following the recession

Last Updated on Thursday, 16 February 2012 06:16 Written by tateskate Thursday, 16 February 2012 06:16

Insurance covers almost everything these days and the web has created a highly transparent and competitive market place for insurance providers. Some insurance is required by law such as car insurance or medical insurance in some countries. Other insurance although optional in 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. There is then another type of product aimed mainly at consumers that is highly specialised such as pet insurance, wedding insurance or certain types of extreme sports insurance. Either in the high street or on the internet, companies offer varying rates and excesses dependent on many different things. A secondary market also exists for customers to buy the services of insurance brokers who shop around 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 premium and cost of the insurance or whether to insure at all. To take the example of car insurance, the underwriter would assess the drivers accident record. In medical insurance, another example might be where the patient’s sickness record is examined. The internet certainly helps the sector remain competitive and transparent but many customers are even now finding themselves uninsured in times of emergency. Extreme winter sports insurance demonstrates this well. The industry believes that over half of holidaymakers to winter skiing destinations have no insurance and although the other half do, less than a quarter of them are actually insured for skiing and snowboarding which are classed by most insurers as ‘extreme sports’ and excluded from their plans. Most travelers to Europe also think that their E111 will cover them for treatment but this is simply not the case for many resorts. A very recent example of The adaptation of the insurance sector is the relentless price war between rival travel insurance brokers 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 causes pricing to be the chief competitive factor.

A recent example of a failure in the insurance market was when payment protection insurance policies (PPI’s) were discovered by the FSA to be negligent drafted or having been fraudulently marketed. This has caused a storm of litigation from customers and firms being created for the single purpose of acting as agents by which customers can claim back any PPI that is covered by the FSA’s investigations. Compare travel insurance on the net for the best bargain. Another questionable product is identity theft insurance that promises 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 in most sets of circumstances liable for such acts.