Insurance covers almost everything these days and the world wide web has created a highly transparent and competitive market place for insurance providers. You are required by law to have certain insurance such as car insurance or medical insurance in certain jurisdictions. Other insurance although not legally required is seen by most as a ‘must have’ such as travel insurance or insurance for corporate property and business assets. There is then another type of product aimed with the needs of consumers in mind that is highly specialised such as pet policies, wedding insurance or Insurance for adventure holidays or extreme sports. On the high street or online, companies set their policy prices and excesses at varying rates dependant on many different things. There is also a secondary market for customers to buy the services of insurance brokers who trawl the market for products at the request of their consumer or corporate clients. Another service offered primarily through agents is underwriting.

This is where the insurance venture’s risks are calculated and the underwriter determines the correct pricing arrangement for the insurance services or whether to insure at all. To take the example of car insurance, the underwriter would assess in detail the driving history of the customer. In medical insurance, another example might be where the patients health is taken into account. The mass take-up of the internet definitely helps the insurance sector remain competitive and transparent but some customers are even now finding themselves uninsured when they most need it. Winter sports insurance is an excellent example of this. It is reported that more than 50% of holidaymakers to winter skiing destinations are uninsured and although the other half do, only a quarter of them are in fact insured for skiing and snowboarding which are categorised by almost all insurance firms as ‘extreme sports’ and not included in their basic cover. Most travelers to Europe also think that their E111 will cover them for treatment but this is not true for many resorts. Another recent example of how the market is changing is the relentless price war between opposing auto insurance firms that has been largely facilitated by the introduction 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 insurance sector was when payment protection insurance policies (PPI’s) were uncovered by the FSA to be either useless or having been missold to many customers. This has generated a storm of legal claims against insurers or certain banks and firms actually being set up for the single purpose of acting as legal assistants so that customers can claim back any PPI that is covered by the FSA’s investigations. Compare travel insurance on the net for the best deal. 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 in almost all instances liable for such acts.