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PURCHASING ONLINE IS MORE CONVENIENT, BUT NOT ALWAYS SUITABLE

Insurance invades cyberspace

WITH the internet now a fixture in many Slovak households, the public can purchase an insurance policy from the comfort of their own home.

Travel insurance is among the types that can easily be purcahsed online.(Source: SITA)

WITH the internet now a fixture in many Slovak households, the public can purchase an insurance policy from the comfort of their own home.

But while online registration may be faster and more convenient, experts warn that it's not always the best option.

The past couple of years have seen a surge in the number of Slovak insurers that operate online.

The offers are mostly for travel insurance, health insurance, mountain rescue insurance, third-party liability car insurance, and property insurance.

The advantages of registering online is that the transaction is cash-free and can be done 24 hours a day from anywhere in the country, according to insurers.

The Union insurance company has observed a marked interest in purchasing travel insurance online.

The number of people registering for online travel and mountain rescue insurance has increased by 92 percent compared with 2006, Nina Zelníková of the insurer Union told The Slovak Spectator.

Meanwhile Česká Poistovňa Slovensko's reported that third-party liability car insurance contracts are its most popular online product.

Ivana Čambalíková of Česká Poisťovňa Slovensko said that purchasing insurance over the phone was more popular than over the internet as recently as 2006, but that last year surveys showed an equal preference for online and telephone sales channels.

Česká Poisťovňa Slovensko attributes last year's growth in online purchases to increased internet penetration in Slovakia.

But online orders can't supply the personal contact that's needed when the client has special requirements.

This means more traditional methods are more suitable to those with very specific needs or insurance terms, Zelníkova said.

"A classic example is life insurance, when personal consulting is really an added benefit, since the advisor is able to adjust the amount of a policy, or add insurance, according to a client's needs," Zelníkova said.

Online purchasing is better suited to simpler types of insurance with simpler terms, Zelníkova said. These are usually short-term policies with lower premiums.

Shopping for life insurance online is more complicated because the client must fill in medical records and the risk of insurance scams is higher.

Of non-life insurance policies, comprehensive car insurance is also thorny because an inspection of the car is necessary, Čambalíková said.

As well as online and over-the-phone registration, clients have the option of enrolling via text message, but this only works for certain types of insurance, Zelníková added.

In some countries, retail chains sell insurance policies that a customer can literally put into their basket at the grocery store, but this is not available in Slovakia yet, Čambalíková said.

Topic: Finances and Advisory


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