Insurance Through The Internet

By Author: Norris Rios
Total Articles: 572
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When the world was young and everyone dreamed of being able to own a Model T Ford, all insurance was sold by local agents. Think of the cost of the labor. Thousands of people walking the streets in search of business, knocking on doors, and making friends with potential and actual customers. A fair chunk of the premiums we paid kept all these people employed and, remarkably, insurance was highly profitable for the stockholders. Now turn the clock forward one hundred years to a time when people dream of owning a US car not built or designed by the Japanese. We find the latest trend is to move as much as possible of the business of insurance online. You may wonder at this when you see Allstate Corp has just paid out about $1 billion for Ensurance and Answer Financial. How come it can be adding value to spend so much to consolidate the online presence. The answer is easy. This is automation to replace as many human beings as possible.

The real problem about employing people is they are expensive. Worse, even though you can pay them high salaries, they still fall ill and fail to come into work. So it's far better to rely ...
... on computers that never fall ill and can work round the clock every day, every week, every month, every year. So Allstate is buying not only brands names associated with direct selling, but also all the technology of computer support for the sale and administration of insurance. In effect, the $1 billion is buying major cost savings and the ability to market directly through the internet. It may seem quite a big price to pay, but Allstate is expected to be running into profit on the deal in less than two years.

So will this also benefit us? Here we get into a very grey area because we have to decide what outcomes we might think are benefits. It's possible that premium rates might fall or, at least, stay flat for the next few years. If you cut your labor bill, this generates savings that might be passed on to the customers. But if you reduce the number of human beings, this can serious affect the quality of the relationship between the company and its customers. So, we might think everything was wonderful so long as the premium rates in the auto insurance quotes stay low and we have no questions about the policy. Even if we have questions and find it very difficult to get past FAQs online and call centers that play mindless music to you while you wait, we might tolerate the poor service with a smile. But come a claim and we might find the lack of human beings a real problem.

Even with claims departments maintaining reasonably full employment, the problem is the general lack of a service ethos. If everyone is prepared to interact constructively with customers and help them through the process, there will be few complaints. But the unfortunate reality is a reluctance to make generous settlements. There's a tendency to delay the handling of claims and then offer the lowest possible numbers. So after the auto insurance quotes arrive, the customer experience can damage the brand. Let's see how Allstate handles this problem.