A COMPARATIVE-STUDY OF BUSINESS TO CONSUMER ELECTRONIC COMMERCE WITHIN THE AUSTRALIAN INSURANCE SECTOR

Electronic commerce is causing fundamental changes in the insurance se ctor. Inherent opportunities of this innovative sales channel are driv ing the development of a new customer relationship paradigm, developme nt of new products, pursuit of low cost 'self service' strategies, and emergence of 'virtual brokers'. The Australian insurance sector is we ll positioned to take advantage of electronic commerce due to the high level of PC penetration, high Internet usage, and extensive broadband infrastructure. The perception is that the Australian insurance secto r is meeting these challenges. Surprisingly, despite the emergence of electronic commerce as a 'hot topic' in the information technology and insurance sector literature, little empirical research has been repor ted. Much of the extant literature can be criticized as being too gene ric and superficial. It is argued that until research is focused on sp ecific aspects of electronic commerce, we will fail to capture meaning ful insights. The aim of this research project is to develop a researc h framework appropriate for electronic commerce, research and to apply it to a specific sector (insurance), in a specific geographical regio n (Australia), using a specific electronic commerce, medium (Internet) , for a specific purpose (business to consumer sale of risk products). The research objective is to discover which Australian insurance comp anies are using electronic commerce for what. The survey found that of the 21 largest Australian insurance companies only 18 have web sites. These sites are mainly used for promotional purposes and not for dire ctly generating sales. Only six companies offer customer-specific pric ing of their products. And of these, only four companies sell any of t heir products over the Internet. Paradoxically, despite pressing busin ess drivers in the insurance sector and a favourable electronic commer ce environment in Australia, these findings demonstrate a significant gap between appreciation of the importance of electronic commerce and realization of commercial potential. Whilst most Australian insurance companies are well aware of the special importance of electronic comme rce, many fail to take full advantage. Although further qualitative re search is recommended to understand why this is so, it is clear that a significant gap remains between the technical capabilities of electro nic commerce and actual practice in the Australian insurance sector.