Scores of banks and securities brokers are chasing customers in cyberspace. Now, insurance companies are finally joining the race. You can go online to shop for and, some-times buy term life policies and auto cov-erage. Matthew Morningstar, an analystwith market researcher Datamonitor, estimates that 60% of U. S. insurerswill he selling over the Web by 2001. Fewer than 5% are now. "We know thereare people out there who want to do this all online," says Alan Hauer,Internet process leader for Progressive Corp., which is selling auto insurancein four states through its Web site (table).
Besides marketing policies through banks, such as Chase Manhattan, and brokers, including Charles Schwab, insurers are expanding their Web presence through a variety of quotation services.
QuickQuote and Quotesmith now provide the same information online that some companies supply via toll-free phone numbers. They will search through vast databases of life insurers for the least expensive term policies that meet your requirements. ln-surers pay a commission forsales generated at these sites. Insurance malls, such as Ins-Web and Intuit'sInsure-market, also give comparative prices but only feature insurers thatpay to be listed. That limits the number of carriers they quote: just sevenlife insurers at Insuremarket, nine auto insurers at InsWeb.
If you're shopping for insurance online, here's what youcan expect to find: LIFE INSURANCE: Term insurance, which pays your beneficiaries a set sum if you die, continues to be the dominant offering on the Net. It pays to check several sites to find the best deal. If yousearch for a policy through Insuremarket, say, you must first an
Answer 22 questions that include your age, weight, and familyhistory of illness. The number of quotes you get will vary, depending on your answers and home state. A healthy, nonsmoking 45-year-old woman living in Illinois looking for $500,000 of term coverage for 20 years would receivesix guaranteed level-premium quotes ranging from $605 a year from JohnHan-cock to $980 from Prudential. The site also provides links to credit rating agencies that gauge insurers' financial strength. The prices you'll find online aren't any cheaper than if youwent to a carrier directly. But the shopping is more convenient. Once youfind an acceptable price, it takes about five minutes to apply for coverage.Of course, some things you can't do over the Net: You'll need to book amedical exam, either online or over the phone. Once the test results arein, you should hear back within two weeks on whether you were approved.AUTO INSURANCE: Online options for this $110 billion market are limited,Sites like auto-insurance. com and insure one.com assemble prices frominformation filed with state insurance commissioners. But since their initialquestionnaires aren't very detailed, carriers don't always honor the quotes.By contrast, InsWeb asks 91 questions at its site, and "if you get a quote,the insurance company will honor it," says InsWeb spokesman Greg Berardi.
Corporate Web sites generally ask for your E-mail addressto send back a quote. Many will just give an 800 number or names of agentsyou can contact. Progressive, however, will give you its quote along with comparative prices from competitors. But it is licensed to sell policiesonline only to motorists in California, Virginia, Minnesota. and Ohio.If you want to get your new Lexus on the road now, Bauer says the companycan verity your information and put the policy in force by 12:01 a.m. theday after you supply your credit-card number. The company (www.progressive.com)wants to roll out online transactions in the 43 other states in which itoperates as quickly as possible.
If all your surfing leads you to deals with auto insurers you've never heard of, keep in mind that state insurance commissions rate companies by how well they service damage claims. You can get access to state-by-state results from the Web pages of the National Association ofInsurance Commissioners (www.naic.org).
Although auto and term life coverage are making theirway online, you still won't find much on the Web regarding health coverage and life insurance that builds up a cash value, save for details about products and an invitation to receive more information by mail or phone.Expect that to change. As insurers get the hang of marketing simpler policiesonline, more complicated products will surely follow.