SINGAPOREANS have been ‘extremely receptive’ to the online insurance model, said DirectAsia.com chief executive officer Simon Birch.
“We have achieved 2 per cent market share (in terms of private cars) in a period of 10 months, which is extremely fast by any standard,”
In terms of premiums, DirectAsia estimates its market share at 1.5 per cent. The company launched its insurance portal last June – two months after Aviva, Singapore’s other online insurer, began operating its ‘low-cost operating model’ here to pass ‘healthy savings’ to its customers.
“It does show that Singaporeans have indeed been extremely fast in adopting massively the online insurance model for car insurance,”
As with traditional brick-and-mortar insurers though, DirectAsia’s premium for a 32-year-old single male with a one-year-old Toyota Corolla Altis and zero no-claims discount (NCD) has climbed. The online insurer now quotes $2,184 or 1.9 per cent up from $2,225.
“But we would highlight that our core target segment are people with 30 per cent NCD and more, and no traffic offence in the last three years,”
emphasised Mr Birch.
He said that for now, DirectAsia.com is not yet profitable due to implementation costs.
“We expect to be profitable by 2013, and we are well on target to achieve this figure,”
Looking ahead, Mr Birch expects premiums to be ‘pretty stable in 2011, and we are expecting price reduction to start in early 2012’.
Traditional market leader NTUC Income also does not foresee the need to increase insurance premiums for its private car business this year.
‘This is due in part to our claims control measures and our willingness to vigorously contest fraudulent claims,’ said its spokesman.
But AXA does not agree. ‘Based on the trends we are seeing in the marketplace, we anticipate that motor premiums will continue to increase slightly as the market has not fully recovered from its major loss in 2009,’ said AXA CEO Chua Kim Soon.
“In addition, courts are now increasingly awarding damages to consumers. This has a significant impact on the claims cost for the entire market.”