Insurers Net New Riches

BUSINESS is booming on the internet for financial firms. Online purchases of loans, mortgages and car insurance, for example, are predicted to rise by 30 per cent this year, according to research by Sainsbury’s Bank.

Internet-based providers believe the convenience and lower costs will keep fuelling growth. But some consumers still feel anxious about forwarding financial details over the web.

Insurer eSure, owned by HBoS, found that 75 per cent of adults have made savings by buying online rather than on the High Street or over the phone, with 24 per cent saying the saving was between ten per cent and 50 per cent.

Insurance is the most popular financial product for online purchases. Almost two million people bought their car insurance online in 2004, according to the survey.

But news reports of incidents such as bank staff in India offering customers’ details for sale have damaged confidence. ‘There is no way to predict the rogue behaviour of staff,’ says James Harrison, managing director of Insurancewide.com.

‘The best way consumers can protect themselves when buying financial products online is by choosing to buy from companies regulated by the Financial Services Authority. And be careful to give personal details only when you really have to and work with websites that are trusted.’ After motor insurance, credit cards and home insurance are big sellers online.

Financial comparison website moneysupermarket.com has seen a dramatic rise in applications for credit cards and personal loans.

Last year, 360,000 more people looked at credit card deals at moneysupermarket.com than in 2003, and those comparing personal loans rose by more than two million.

‘The figures are encouraging because they show more people are harnessing the power of the internet to shop around and find the best deals,’ says Peter Gerrard, the company’s senior researcher.