A new survey casts doubt over the viability of German Internet insurers.

A new study by Speedfacts Online has given an indication of German consumers’ insurance purchasing habits. Although 4% of Germans with Internet access have bought an insurance product online in the past year, two thirds of respondents insisted on direct consultation with an expert before they would buy insurance and half said they would only ever buy insurance offline. Most customers, the figures suggest, see the Internet as a source of information rather than a tool for purchasing complex policies.

This leaves established insurance providers in a powerful position, for several reasons. They are in the ideal position to link an Internet strategy with their existing advice and distribution network, with both elements feeding into each other for maximum efficiency and revenue growth. In addition, insurance is by its very nature a conservative product and most of its customers cling fondly to old-fashioned distribution methods.

The survey also highlights that Internet insurers have resoundingly failed to get themselves noticed by the public. Only one German firm, Finanzscout, has succeeded in gaining brand recognition of above 5%, despite huge advertising spending. Even though the Internet insurance pure-plays have first cyber-mover advantage, the market is still clearly at an infant stage, and they have not managed to gain enough mindshare to avoid attack from the established providers.

German Internet-only insurers are in an untenable position. They are struggling to gain critical mass at a time when sentiment among investors towards online ventures is at an all-time low. This research shows that this critical mass is, for the moment at least, unachievable. There is no chance of standing still, either, as the established players prepare to eject the upstarts from any small niche they are attempting to build. The future will bring carnage, as online providers adapt, get swallowed or go to the wall.