Insurance covers almost everything these days and the world wide web has created a highly transparent and competitive market place for insurance providers. Some insurance is required by law such as car insurance or medical insurance in some countries. Other insurance not required by law is viewed by most people as a ‘must have’ such as home insurance or insurance for corporate property and business assets. Then there is a third class of insurance aimed with the needs of consumers in mind which is more specialised such as pet insurance, wedding insurance or insurance for extreme sports such as skiing. Either in the high street or on the internet, companies set their policy prices and excesses at varying rates depending on various factors. There also exists a secondary market for the services of insurance brokers who shop around for products at the behest of their consumer or corporate clients. Another service offered primarily through agents is underwriting.

Underwriting is basically where the risk to the insurer and other risks are calculated and the underwriter determines the premium and cost of the insurance or whether to insure at all. To take the example of car insurance, the underwriter would assess in detail the driving history of the customer. Another example might be medical insurance where the patients medical records are examined. The mass take-up of the internet definitely helps the sector remain competitive and transparent but some customers are even now finding themselves without cover when they most need it. Winter sports insurance is an excellent example of this. The industry believes that more than half of holidaymakers to winter skiing destinations have no insurance and although the other half do, less than a quarter of them are in fact covered for skiing and snowboarding which are classed by many providers as ‘extreme sports’ and not included in their basic cover. Most travelers to Europe also think that their E111 Is good enough for treatment but this is simply not the case in most resorts. Another interesting example of how the market is changing is the relentless price war between rival auto insurance brokers that has been largely facilitated by the introduction of price comparison sites. Car insurance is required by law so It simply must be bought by every individual with a car. This causes pricing to be the primary competitive factor.

An example of negative activity in the insurance sector was when payment protection insurance policies (PPI’s) were uncovered by the FSA to be negligent drafted or having been fraudulently sold to customers. This has caused a storm of litigation from customers and firms being created for the single purpose of acting as agents by which customers can claim back any PPI that might have been missold to them. Compare insurance online to give the best bargain. A further dubious insurance product is identity theft insurance that claims to refund the subject for any loss as a result of cyber fraud or identity theft. However many people are unaware that the bank is in most sets of circumstances liable for such acts.