Virginstudent.com has taken a 40% stake in specialist student insurance provider studentwatchout.co.uk.
The statistics on student cover make pretty grim reading. Only one in ten have any belongings insurance and a quarter of all students travelling abroad have no travel or medical cover.
David Milner, managing director of New Channel, the insurance group that owns the majority share of studentwatchout.co.uk, believes the internet will boost student cover levels. "Logging onto studentwatch. co.uk may be a student's first foray into the daunting world of insurance. We provide a service that is user friendly, offering the most competitive prices for the average cash strapped student."
But Brian Wright of Saxon doubts the market will see a surge in the short term.
"Over 70% of students have access to the internet but the bulk don't buy insurance and if they do, they do it over the phone," he said.
"In the majority of cases, the insurance is bought by parents or it is part of a bulk plan with the university where the premium is included in the rent. But when the student leaves the halls of residence after the first year, the renewal rates are woefully low."
To make matters worse, students are often seen as an easy target for burglary – 90% of colleges are in higher-risk areas and in poorly protected property.
The biggest boost to online student insurance is likely to come in three years' time when all UCAS applications are carried out online with all student cover tied in.
