The use of the internet as a sales outlet for Maltese motor insurers

Abstract

The internet has become a fundamental business tool for all industries. Its global presence and easy access made the internet a necessity in our daily lives. Moreover, the introduction of social networking and the utilisation of multimedia entertainment rank the internet as one of the most important of all the mass media. Purchasing a motor insurance policy online is a relatively new method of purchasing cover from local distribution channels. It can be said that Maltese policyholders cannot be considered to be very familiar with this channel of distribution. Furthermore, insurance companies appear to have mixed opinions on its viability. Insurance companies want the best of both worlds; an efficient and effective online distribution channel so that client can purchase insurance directly from them while maintaining a good working relationship with their intermediaries. This research study identifies the impact of online motor insurance upon the local motor insurance industry. Official statistics from foreign motor insurance markets together with primary data collection through questionnaires allowed an enhanced understanding of this means of distribution from a local viewpoint. The use of the internet to purchase motor insurance online is gradually increasing in Malta. As a result, other traditional distribution channels are being negatively iv affected and will be under more pressure in the near future. The findings of the study suggest that up to now the general public have used the internet very infrequently to purchase motor insurance, however more people appear to be willing to do so in the future. Moreover, this study proposes possible improvements to the current online system that could be implemented to increase the value and importance of this new distribution channel.