City IT: E-shoppers look but don't buy

Although growing numbers of European and US consumers are using the Internet to shop around for financial services, they are not...

Although growing numbers of European and US consumers are using the Internet to shop around for financial services, they are not making purchases online.

In the US online purchasing of insurance is actually declining, CityIT delegates heard this week.

According to Stuart Glendinning, marketing director of the moneysupermarket. com portal, consumers are not confident about applying online for high-commitment financial products, such as mortgages, annuities or stakeholder pensions.

"[Analyst firm] Datamonitor reckons that 10% of mortgages will be bought online by 2006 because lenders will accept e-signatures," he said. "But I strongly disagree. Lenders are very far away from accepting e-signatures, and that figure will not even be close to 10%."

Another speaker, Kimberley Harris, research director at Gartner Group, said there is currently an impasse with online insurance.

"Although consumers are getting more quotes and doing comparison shopping, they are not buying online because they are not ready and Web sites are too complex," she said, adding that online insurance purchasing in the US is declining.

Harris said that of those who do take out insurance online few renew their policies electronically. "Insurance companies think they understand consumer dynamics but they don't," she said.

Meanwhile, insurance companies are finding unexpected extra costs in dealing with online customers. Account aggregation, where people can obtain multiple quotes online, leads to people being unsure about what they have bought. As a result people making claims tend to use considerably more call centre time in resolving claims.

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