Academic journal article The Journal of Consumer Affairs

Cues of Credibility and Price Performance of Life Insurance Comparison Web Sites

Academic journal article The Journal of Consumer Affairs

Cues of Credibility and Price Performance of Life Insurance Comparison Web Sites

Article excerpt

An array of Web sites is available to help consumers find the best deals on products and services. While these sites have the potential to save time and money by directly comparing alternatives, consumers still have the task of assessing the credibility of these comparison sites. Experts recommend that consumers look for certain key disclosures or "cues" to assess a site's credibility (e.g., a site's identity, the currency and authoritativeness of its information, its sponsors and business relationships, and its privacy practices). Focusing on 32 life insurance comparison Web sites, this research found that these recommended cues are often not present on Web sites and, when they are, do not seem to predict a site's ability to deliver the lowest-priced quotes for term life insurance policies.

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The Internet has vastly increased the amount of prepurchase information available to consumers (Horrigan and Rainie 2002). In addition to the sites of individual e-retailers, consumers can use a variety of "bots," "engines," "agents," and other intermediaries (hereafter called "comparison sites") to facilitate comparison of products and services and find the best prices. These comparison sites hold out the prospect of saving consumers considerable time and money. Nevertheless, consumers still face the task of comparing the comparison sites and determining which ones dispense the best information.

It would defeat the purpose of comparison sites if consumers had to visit and evaluate a large number of comparison sites before making a purchase decision. To avoid this time-consuming process, experts recommend that consumers look for "cues" (economists might prefer the term "signals") that a Web site is trustworthy and credible. Consumer WebWatch (2002), a program run by the publishers of Consumer Reports magazine, encourages all Web sites to display--and consumers to look for--information about their identity (location, ownership, mission), advertiser and sponsor relations, information currency, and privacy practices. For people searching for health-related information, experts suggest that Internet users seek indicators of the currency and clarity of a site's information and the possible motives of the site's sponsors (Medical Library Association 2003).

Two conditions must exist for consumers to effectively shortcut the process of comparing Web sites that dispense information: (1) sites must offer the fight cues, that is, those that accurately predict the quality of a site's information and (2) consumers must use the fight cues. Regarding the latter condition, a study comparing the way that experts and everyday consumers judge the credibility of finance and health Web sites concluded that consumers rely heavily on visual features like a site's design, color scheme, and format. Instead of these relatively superficial characteristics, finance and health experts look for signs that a site's information is specific and free from commercial bias (Stanford et al. 2002). Clearly, additional research is warranted regarding the cues that consumers actually use when evaluating Web sites that specialize in dispensing information. The focus of this study, however, is on the first condition noted above, namely, the cues offered by sites and the relationship of these cues to the quality of a site's information.

The focus of the empirical portion of this paper is on sites that compare term life insurance policies from multiple companies. Although visits to life insurance comparison sites are still fairly rare relative to sites that compare travel services or home electronics, life insurance sites raise most of the same search issues for consumers. Moreover, financial Web sites, of which life insurance sites are a subset, are consulted by 42% of Internet users (Internet Activities 2003), and many people shop online for financial products such as credit cards, investments, mortgages, and a variety of insurance products (Harris Interactive 2000; Rasaretnam 2002). …

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