Insurance Company Partners Integration And Maintenance Fees example essay topic

Quick Insurance: The Race to Click and Close Steven Aldrich creator of an online insurance. com portal in July 1995, made a tough decision to sell his company to Intuit, Inc for $10 million, and also made a transition to become Quicken. com general manager. The reason Aldrich sold Quicken Insurance to Intuit was because he was having problems convincing insurance carriers to join his services, but selling the company to Intuit's which is well known and well respected brand will dramatically increased the company's credibility with both suppliers and customers and it enabled his firm to dramatically reduce the cost of driving traffic to the QuickenInsurance site. During the slow growth of the online industry for insurance purchases, there were three factors that kept the online insurance business with a disadvantage. They were that it was too complex for consumers to purchase online, insurance was purchased infrequently and it had a restrictive regulatory environment hampered the entry of independent online marketplace. People were looking for the ability to compare multiple competing quotes from multiple carriers, the availability of information about policies and terminology and ability to use tools to calculate premiums. QuickenInsuarnce is a vertical portal, which provided deep content of information which was designed from the customer's perspective so it can be user friendly.

A vertical portal is a place to conduct business, learn, shop and communicate building tools to consumers. InsWeb was an online aggregator, it could not collect fees for policies sold but received fees from referral fees on every qualified lead. Referral fees were paid whether or not the consumer actually purchased an insurance policy from the insurance company. Also, like QuickenInsurance they charged insurance company partners integration and maintenance fees. 20% of Insweb's traffic was generated from its relationship with yahoo compared to 30% of traffic came from quicken. com and 20% from AOL. QuickenInsurance charged carriers a commission on each product sold, when carriers signed up to distribute insurance through Quickeninsurance, they paid an upfront development and implementation fee to cover the cost of integrating the transaction systems and databases with those of the carrier.

They also charged carriers an additional annual maintenance fee. They also generated revenues from referrals to agents. Major cost driver was the cost of hiring and retaining the technical talent required to develop the company's web based insurance service and the custom designed technical infrastructure needed to integrate it with participating carriers. Online Insurance Industry was shaky in the beginning phase, but what do you expect when it is something new for consumers to shop for insurance in front of there computers instead of having a real person in front of them. I believe Steven Aldrich made a great decision by selling his online insurance company to Intuit, which gave it a brand recognition for suppliers and customers to join or purchase insurance services. It also gave him the ability to generate traffic to the site so more consumers can purchase insurance.

I also think that QuickenInsurance is heading the right direction by their business model, revenue model, and cost model. But eventually either InsWeb or QuickenInsurance have to buy each other out, and they must offer a greater choice of quoting carriers in each state, and provide online purchase or call center fulfillment capabilities in more states in order to be successful in this highly profitable and growing online insurance industry.