The surviving few: only a handful of the online insurance
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The world of online insurance brokers looked a lot different five to 10 years ago, when many start-up companies raced to gain a share of the market and capture a new opportunity to reach customers directly via the Web. But just as the hype of the dot-com boom in the early part of this century quickly vanished, the dreams of creating a leading online insurance-brokerage company also faded for many of the early pioneers. A handful of online insurance brokers remain in the market today–some with refocused operations and others continuing down the initial path they pursued. Not only are these companies reaching out to millions of agencies and customers via the Internet, but they’re also finding the payoffs to be lucrative. Refocused strategies, an extensive knowledge of the industry and a strong technological foundation are several secrets to success that the remaining few credit for their sustainability in the market. In the Beginning Many companies jumped on the dot-com bandwagon in the mid-to-late ’90s to create online brokerage businesses to sell insurance. InsWeb was among one of the first online insurance aggregators to venture into the market after its chief executive officer and co-founder, Hussein Enan, learned from his son about the availability of purchasing items via the Internet. His supposition: if people were selling compact discs via the Web, why not do the same for insurance? He then took that vision and launched the online company in March 1995, and it has seen continued growth in the past nine years. InsWeb consumers can log on to compare multiple quotes provided by leading insurers for automobile, term life, homeowners, renters, condominium, health and other insurance products. A handful of other companies, such as eHealthinsurance, ePolicy Solutions, Esurance, insure.com, InsuranceNoodle and ReliaQuote, also joined the ranks of direct-to-consumer online venues in the past several years. Not only have they maintained strongholds in the industry, but they’re also overshadowing the once dismal predictions for online insurance sales. In 2000, Meridien Research Inc., now known as Financial Insights, said only 1% of all policies were purchased over the Internet. But since its inception in the market in December 1999, San Francisco-based Esurance, for instance, has seen a compound annual growth rate in premium volume of more than 170%. Esurance is a subsidiary of White Mountains Insurance Group Ltd. Down and Out Some online insurance broker pioneers weren’t as fortunate. In the early 2000s, the burst of the dot-com bubble also meant dissolution for many of the online broker pioneers. Lack of both funds and a focused strategy forced several companies out… Source : accessmylibrary.com |