The Benefits Of Direct Insurance

Immediate access, functionality and communication demanded by consumers in today's fast moving world, has given the direct insurers an ever increasing share of the short-term insurance market. Although South Africans are slightly behind their overseas counterparts, shopping on-line is rapidly growing in popularity in South Africa. People plan their entire vacation, shop for groceries and even find their soul mates online, so it is not really surprising that direct insurance online is gaining a significant market share.

In a recent survey on "Emerging Trends and Strategic Issues in South African Insurance" is was reported that insurance brokers and underwriting management agencies had lost ground in distribution coverage to direct insurers. This stands to reason as direct insurers offer both immediate access and premium discounts and research indicates that consumers generally select an insurer based on convenience and accessibility, rather than price.

Direct insurance offers benefits to all income groups - perhaps appreciated even more by the lower-income market as most direct insurers offer a call back option. This offers the applicant the opportunity to speak to an insurance consultant, at no cost to the potential client, by simply filling in his details online. Most of the policies sold by direct insurers are accompanied by brochures or booklets in plain easy-to-understand business writing explaining the policy wording of their products.

The growing popularity of direct insurers can also be attributed to the tailor-made business insurance policies now being marketed by the leading direct insurers. These business policies are specifically designed for Small and Medium Enterprises (SME's). Almost half of South Africa's economic output is generated by SME's and small business owners are becoming more open to alternative purchasing options. Buying insurance online allows these busy people the ability to do business after normal office hours.

Leading direct short-term insurers offer clients value added products, such as buy back bonuses, which also assists in making them the insurers of choice.

It remains to be seen if direct insurers will overtake brokers when it comes to market share. If current trends continue then brokers may find that they will need to re-assess their way of doing business.