Time for a makeover
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A fiercely competitive advertising environment has forced online insurance quote generator InsWeb Corp. to “rethink” its marketing strategy, according to the company’s founder. And to do that, the mostly unprofitable company has snagged an executive from a competitor, who is guiding the marketing and launch of the company’s new term life insurance agency. “About nine months ago, the direct writing insurance companies started being very, very aggressive on the advertising front–particularly online” InsWeb founder Hussein A. Enan told Best’s Review. “Each time Progressive goes out to the market, advertising its product–heavily advertising its product, spending money advertising its product–that inhibits our own ability to draw consumers,” Enan said, calling Progressive Casualty Insurance Co. and Geico Direct among InsWeb’s “biggest” competitors. According to Chad Hersh, senior analyst in the insurance practice at Celent Communications, a Boston-based research and consulting firm focused on insurance and financial services technology, Progressive Casualty Insurance Co. “spends a small fortune on advertising.” The majority of consumers know to go to Progressive’s site long before they know to go to InsWeb’s site, Hersh said. The Sacramento, Calif.-based InsWeb, founded in 1995, is an online aggregator that allows consumers to compare multiple quotes for auto, term life, health, homeowners, renters and condominium insurance from several top insurance companies, on its Web site. The company receives a commission when it acts as an agent to sell a policy, or it receives a transaction fee when it forwards a consumer’s information to a company as a lead. According to Hersh, the bulk of InsWeb’s business is auto insurance. In the second quarter of 2004, about 75% of its revenue, or about $2.4 million, came from auto insurance, compared to $708,000 in revenue for term life insurance, he said. InsWeb recently said Mark Guthrie resigned from his position as president and chief executive officer, and as a member of its board of directors, effective Aug. 15. The board reappointed Enan to the role of CEO and he will continue as chairman. A new president will not be named, Enan said. More : accessmylibrary.com |