The Maltese insurance industry : a study of online marketing and sales

Abstract

Due to technological advancements distribution channels for insurance have developed from visiting the insurance company itself to using brokers and agents to calling the insurer and lately online, that is via the internet. The latter is a very straightforward process where it had a significant impact on the insurance industry. Such process entails advantages and disadvantages to both the insurer and the insured. An insurance company can reduce heavily its costs while it finds it difficult to retain its customers due to the high competition. On the other hand the insured is provided with a lot of variety hence saving a lot of time and money. However proposers must be careful and consider other factors apart from the premium. This study shall be about the process of buying and selling insurance online with respect to the Maltese insurance industry. Such a tool has only been recently introduced in Malta and it appears that when compared to other countries the internet is not being used as much as a distribution channel where for example there are some classes of insurance which are not sold online by some insurance companies. Moreover aggregators are completely disregarded in Malta, while in other countries they seem to be popular as they provide different quotes from different insurance companies on a single page which saves more time and makes it easier for the consumer to compare. The objective of this research is to gain an understanding of how the introduction of the process of buying and selling insurance online has affected local insurance companies, brokers and customers to date, the reasons why it is not being used to its fullest in Malta, the preference of insurance companies and customers between traditional and online tools, and finally what is the intention of insurers for the future regarding such a tool. In order to be able to gather such information which will be analysed and interpreted, I intend to conduct interviews with local insurance companies and also distribute questionnaires to customers. Thus both the insured and the insurer’s perspectives are evaluated and in doing so the relationship between them can improve. This is because with technology continuously advancing it is important both for insurance companies and customers to adapt to the ongoing changes. If either the company or the client refrains from doing so the result will be that of a market failure.