It will bypass agents and offer lower premiums

NEW online insurer DirectAsia.com aims to capture 5 per cent of the motor market within five years.

The direct-to-consumer company will bypass the traditional agent and offer lower premiums for its motor, travel, home and personal accident products.

Launched yesterday, DirectAsia.com is owned by the Whittington Group and reinsured by Munich Re.

According to Whittington's group CEO Anthony Hobrow, the international insurance investment company spent more than two years on research, market branding and website testing.

The direct insurance model is doing well in many countries, Mr Hobrow said. In Australia, it accounts for more than 90 per cent of the market, while in the UK the figure is 65 per cent.

But in Singapore it has not taken off because of the 'entrenched relationship between agents and insurers', he said. 'There is a lack of competitive pressure and a new brand like us with no legacy can break into this market.'

DirectAsia.com is the second online motor insurer to enter the Singapore market.

In April, Aviva re-entered the market with a direct online car insurance product which it says costs 7 per cent less than its competitors' offerings.

Mr Hobrow said agents typically get a commission of 10-15 per cent of a motor insurance premium. According to the Monetary Authority of Singapore, such premiums rose 53 per cent between 2006 and 2009. Cutting out the middleman will mean more competitively priced premiums, according to Mr Hobrow.

In Singapore, the Big Three motor insurers - NTUC Income, Chartis (previously known as AIG) and AXA - now account for 62 per cent of all premiums collected. In 2009, more than 920,000 policy-holders paid a total of $1.08 billion in motor insurance premiums.

To allay possible consumer concerns over the online business model, DirectAsia.com said it has an easy-to-use website that reflects premium changes in real time depending on the policy options chosen, and a customer service centre based in Singapore and staffed by locals.

Among other things, it also boasts dedicated claims executives and, in the case of serious accidents, on-site assistance within 30 minutes.

DirectAsia.com is also eyeing the pan-Asian market, with Hong Kong the next place where it will offer online insurance.