Sunday, September 19, 2010

Comparison of insurance with online advertising

The following thought struck my mind today.

As a post on Chitika Research points out, a very small proportion of Internet users pay for the remaining users (and for themselves). This fact is the bedrock of online advertising, and of all the free applications and content that have become available on the Web.

In contrast, in insurance, most users - who make few or no claims - pay for the very small proportion of users who make significant claims (and this small proportion contributes too). This shows the interesting difference between insurance and online advertising in terms of the proportion of feeder customers.

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