Do it online … or not ?

I need to renew my car insurance this morning, having received a letter from DirectLine a few days ago, so I promptly headed down to their website to see how I could do this. Turns out, you can log into your account, see your policy details, even amend them and place a claim online, however .. you cannot pay your renewal online. I also noticed on their correspondence that you cannot actually pay by cash or cheque either. This got me thinking about their business processes and why they came up with these choices.

The internet is a powerful mechanism giving you the ability to compare car insurance, home insurance, life insurance or any combination of insurance products. It is, however, also open to risk; which may be why DirectLine decided not to accept payments online. The risk of fraudulent payments is mitigated by the fact that no goods are shipped and the insurance can be reverted if payment is not forthcoming. Also, third party payment providers exist who could handle the transaction and mitigate any risk from this channel, so I don’t think this is the reason they don’t let you renew your insurance online.

I suspect the case is that although the Internet provides a valid and relatively cheap way of servicing clients, it does not lend itself to cross-selling and up-selling your portfolio. DirectLine have a comprehensive set of insurance products, and while I was affecting the telephone renewal, the operator at the other end tried to sell me one other product. She could have tried to sell me more and she could have been more persuasive about it. Online ads are nowhere as effective at selling products. My guess is that having a phone transaction is marginally more expensive than having on online one, yet substantially more effective as a selling channel for this provider. What do you think?

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