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Tuesday
- August 29, 2000
Online Insurance Shopping
to be Next Area of Internet Expansion
IDC released its market forecast
for online sales of personal property and casualty (P&C)
insurance today, predicting the Internet will influence
37% of all premiums
purchased in 2004. These findings indicate that despite
the low volumes of insurance being purchased directly online
today, the Internet is already significantly influencing
how consumers shop and buy insurance.
"The recent passage of
the electronic signatures bill is expected to stimulate
demand for instant coverage as an increasing number of
insurance Web sites enable consumers to apply and be approved
for insurance coverage instantly over the Internet," said
Jennifer Blackmore, senior research analyst for IDC's eInsurance
program. "The reason consumers like to shop on the
Internet is because it offers a more robust shopping experience
than that offered offline. Consumers can educate themselves
on different policies at their convenience, and when ready
to explore a purchase, can receive multiple quotes upon
completing one application."
Access to online insurance has
significant implications for traditional insurance carriers.
Carriers need to address how online technologies can work
with their traditional agent sales forces; carriers must
also consider how to co-exist, and leverage, online insurance
intermediaries. How carriers address these challenges will
help determine whether they will fully participate in online
insurance opportunities, or become disintermediated by
other consumer-facing companies.
Industrial Supplies Industry
to Boom Online
Buyers, suppliers and distributors in the $1 trillion
industrial supply industry are likely to almost double their
use of the Internet to conduct commerce transactions within
the next 12 months, according to a new survey.
The findings show that today,
34 percent of the trading partners in this huge global
market are developing and incorporating e-commerce strategies
to fulfill their bottom-line business objectives. That
number will increase to 67 percent by next year, and 83
percent in five years.
The survey, conducted via e-mail
May 9-15 by Harris Interactive, a leading market research
firm, and IndustrialAmerica, an online business-to-business
industrial supply trading site for buyers, suppliers and
distributors, interviewed nearly 1,000 buyers, sellers
and distributors of materials such as electrical supplies,
pipes, valves, fittings, power transmission products and
metal-cutting products.
Currently, the dominant method
for conducting transactions in this industrial supplies
market has been through the telephone or fax machine, according
to Chuck Sheridan, president and chief executive officer
of IndustrialAmerica.
Today, only one-third of buyers
(36 percent), sellers (23 percent) and distributors (31
percent) optimize the Internet to help them conduct transactions
worldwide. Within the next five years, usage rates will
increase dramatically: Distributors intend to use the Internet
90 percent of the time to facilitate the distribution of
these goods; and buyers and sellers expect their adoption
to escalate to 80 percent.
Respondents stated the main
reasons for using the Internet are convenience, speed and
the ability to make price/product comparisons online.
"The true value of the
Internet in business today is providing a common ground
for buyers, sellers and distributors to conduct transactions
quickly and profitably," said Sheridan. "These
online exchanges are particularly valuable in markets where
e-commerce is still in its infancy, such as the industrial
supplies industry."
"The benefits of online
exchanges will be threefold," added Sheridan. "Buyers
will have tremendous cost savings both in terms of operational
and production costs; sellers will have unprecedented control
and ability to sell their brand to more customers while
dramatically lowering operating costs; and distributors
will have the ability to cultivate sales and sell more
to customers without increasing sales and marketing costs
while reducing overall operating expenses."
Nine hundred and eighty-one
individuals in the manufacturing industry responsible for
purchasing, selling or distributing industrial supplies
participated in the online survey. Participants were asked
a series of questions directed to find out their position
on using the Internet for conducting and developing business
strategies in the next year and in the next five years.
The sampling error is +/- 3.2 percent.
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