Case Study Subject: Regoo PTE LTD
(http://www.regoo.com.sg/)

Ecommerce Business Model:
Transactional Agent/ Broker:
B2C (Business to Consumer)

Introduction to Ecommerce Model: Regoo Pte Ltd

Regoo Pte Ltd was set up to facilitate the rising need for sourcing of motorcar insurance quotation. In their Ecommerce Model, they provided a wide array of quotations from over 10 insurance providers in Singapore. An interesting fact to note is that Regoo is an independent motor insurance comparison system which claims to be unbiased to any insurer.



Purpose:
The above mentioned company acts as an intermediary between business to consumers (B2C). Potential customers can use this medium to source out the cheapest and most competitive quotations from various insurers at the comfort of their own home. Since all requests are made on an online basis, the end consumer enjoys a range of benefits as follows:-

1. Reduction in search cost to the consumers.
2. Not having to physically queue in person to get a quotation or insurance advice
3. Online quotations and forms are used dispensing the customer from the filling up of forms, a hassle commonly experienced by brick and mortar customers.
4. Ease of pricing and policy coverage comparisons.

All the above factors will one way or another lead to cost savings. The above shows just some of the many conveniences available using a transaction broker which we will be discussing in greater detail shortly.

Design:

1. Unlike the usual websites, this website does not give much disclosure on insurance premium and coverage right from the beginning and requires the customer to fill up necessary information before releasing these critical information.
2. Having said the above, they do give value added service by providing useful information and links to road tax renewal, LTA fines and many others:
3. Designed around reducing customer search cost. (Reduces Transactional cost)


4. Ease of finding the most suitable type of coverage and premium closest to the consumer expectation . Therefore allowing decisions to be made.


5. Electronic forms are used, reducing the paper work required on the later phase which is an essential component in the usual brick and mortar schema. (Data based)

Services Provided:
The ecommerce model used by Regoo is classified as a B2C model as it seeks to facilitate the transacting between the consumer (whom is always on the look out for a good deal) and the business (the insurer whom is always looking at a wider range of media to connect to the customers).

As discussed above, the prospective insured is asked to key in all personal information regarding himself/herself while Regoo acts as a middle man and attempts to get the most competitive quote for the customer. Upon successful confirmation that the customer is interested, a physical contract can be printed out from the online data obtained from the customer and both parties can meet up and arrange for payment and signing. Alternatively, online payments such as credit card is also acceptable.


Strength:

1. With the increasing number of insurance intermediaries, this site promises the ease of information of 10 insurance principals as compared to the conventional insurance agents whom are limited to only 3. This provides the end consumer the ease of enquiring, requesting and securing a motor insurance quotation at the lowest search cost as well as convenience.


2. The site itself offers user login & membership. When properly maintained, this site can be used to disseminate information such as promotions and happenings; allowing them to gather consumer feedback through the forum & feedback form provided by the site itself. Strategically, this allows the organization to test the sensitivity of customers regarding prices and other considerations. (http://www.regoo.com.sg/regoo/index.zul?tab=99&page=news5.html&header=newsHeader.html)



3. Unlike Facebook which allows fraudulent/ bogus information, insurance quotes would not be valid (as with most legal contracts); if the insured or end consumer is giving false information. This way, the information collected by the site is deemed to be highly valid and reliable.


4. Data collection regarding customers are being fed by the customers through "online forms". This allows the organization to cut down on manpower doing data entry as well as allowing the organization to store up such information for future usage. e.g. inability to seal the deal this year may not be an issue. Since road tax expiry details are readily available online through LTA's "Onemotoring Portal" (http://www.onemotoring.com.sg/). This allows the transactional agent to follow up with the potential customer for the next insurance renewal period. Since information such as date of birth, address, contact number and etc. seldom changes, quotes can be sent to these potential customers hassle free. Although Regoo claims that all quotations are fully automated but the system is monitored by the back end operators, it would seem irrational for them to ignore the data that has been mined. According to statistics given on regoo's website, 27713 (as of 13/10/2009) deals has been sealed. The above statistics are not even considering those cases that have been referred but not commited cases!

Weakness:

1. With the increase amount of over information to the consumers, customers may be overwhelmed and may decide not to deal with this entity in the first place.
2. Less technological savvy users may not be tapped by the company. Car owners are mainly people in the older demographic segment. That said, they could well be contributing to the majority of technology late adoptors. Encumbered with the lack of faith with online transactions, this could prove to be one of the main weaknesses of a transactional agent in this situation.
3. One of the core weaknesses revolving around ecommerce is the higher cost of operation. Unlike other forms of ebusiness where "online shop front" can help to make savings in the rental and other operating costs, this may not be that much applicable to insurance brokers and agent whom may not need to have a physical shop front to sell their wares. As a matter of fact, smaller insurance intermediaries may be wasting resources on such a setup since the principals offer such services in their business portal and may also charge a cheaper rate as compared to the intermediary as commission is not applicable. This overlap can greatly lower the efficiency of the intermediaries' online setup resulting in a net loss. Therefore, business should consider their environment before embarking on such a setup.
4. On a separate note, as the hype of online store fronts continues, it will eventually lead to a point where there is a proliferation of these online intermediaries and therefore cause the downfall of the organization. Too many adoptors would only make this a temporary strategic advantage which diminishes as the population of online intermediaries grow.
   

Security:

Like most other online transactional agents, security issues like hacking and trojan infecting users are the most common security threats. Further that, phishing of private information is highly possible. Given the situation, the organization would most probably opt for a low to medium security setup as compared to a larger company. As a result, phishing sites and etc. are more likely to occur. This would in turn harm the trustworthiness of consumers dealing through e transactions. Looking at Regoo in particular, it is unlikely they would increase their cost by implementing EV certificates to fight phishing of information.

Privacy:
As with conventional insurance quotations, sensitive information such as contact number, email address, actual address, occupation, date of birth are all mandatory fields while asking for an insurance quotation.

Typical example of information required by intermediaries such as Regoo.
http://www.regoo.com.sg/regoo/index.zul?tab=1

Such information disclosure may be an issue if the transactional agent cross sells these information across other financial services within or even outside the organization which is a common occurence.

On the left are some common e - payment methods which Regoo may accept but once again, once information is posted into the internet; there is always a chance for a leak of card details and etc. Once again, the best solution is to invest in a highly effective work team to ensure smooth running of the system and rendering technical support where possible,







Future Implications:
There is information asymmetry between the consumer and transactional agent which is favorable to the later. As shown earlier, relevant information of the prospective customer is first released to the transactional agent. This gives the intermediary more information regarding the customer which may in turn be used against them. Furthermore, with internet privacy rights getting more attention, one must beware the consequences of freely releasing customer information. On the below picture, at the bottom left corner; its shows that Regoo has understood the complexity of the information received and therefore administering some form of preemptive disclaimer in view of possible legal liabilities.



Just like non tech savvy consumers, accessibility to computers may prove to encumber the use of such E Commerce transactions in countries such as Tribal South Africa, certain parts of Agricultural Vietnam and etc. As shown previously, demography of adopters, culture and etc are all factors that may affect the mode of transaction between parties. It is up to Companies such as Regoo should examine the environment such as the technological infrastructure they are in before investing heavily on a virtual store front.



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