Insurance offerings via the internet

Covering risks sitting on the sofa

Not only comparison portals but also insurance companies themselves increasingly offer insurance products on the internet. This has advantages for both the insurance companies as well as the customers.

Digitization is advancing in many industries, including insurance, of course. Particularly in times like these when personal contacts should be avoided as far as possible it makes sense for both insurance companies and customers to apply for insurance contracts on the internet.

The advantages are obvious: Insurance companies have another distribution channel at their disposal and can use it to reach young target groups in particular or at least target groups with an affinity for digital technology. Insurance customers on the other hand can check and compare insurance products flexibly in terms of time and location and, ideally, get down to business immediately.

From a legal point of view as well there is nothing to be said against the online sale of insurance products if there is compliance with the general regulations: Even though insurance contracts are often concluded in writing in practice, this is not mandatory under the Insurance Contract Act (Versicherungsvertragsgesetz). Only in exceptional cases a signature is required for the validity of the contract, for example if another person is to be insured against accidents. The Insurance Supervision Act 2016 (Versicherungsaufsichts­gesetz 2016) stipulates in principle that the information to be provided to the customer must always be communicated on paper. Nonetheless if certain conditions are met it is also possible that the information is provided on a durable medium other than paper or via a website.

However, insurance companies must not only provide information, but also specify the demands and needs of potential customers and give them advice. As a general needs analysis is not obligatory it is not necessary to specify any need for an accident insurance if a customer wants to apply for a comprehensive car insurance.

Based on the specified demands and needs, the insurer must provide the customer with a personalised, well-founded recommendation. Does the requirement for a personalised declaration now stand in the way of giving advice via the internet? No, because ‚personalised‘ does not refer to the person giving advice but to the person being adviced, i.e. the (potential) customer. Advice can therefore also be given online.

However, especially with more complex products such as insurance-based investment products there will probably continue to be a high demand for personal, face to face advice in the future.

Our experts in insurance law will be happy to advise you.