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NetBank To Offer Insurance

Online bank acquires assets from e-agency

While many players in the online marketplace have failed, NetBank, Inc. (Alpharetta, GA), has succeeded in banking and is now hoping to repeat its success in the P&C space with its purchase of selected assets of (San Francisco), a Net-based agency that filed for Chapter 7 liquidation in February.

NetInsurance will form a new yet-to-be-branded subsidiary and will offer insurance products underwritten by carriers such as The Hartford, Kemper Insurance, Progressive and SAFECO. It will sell through NetBank subsidiaries, Market Street Mortgage, RBMG, and Meritage Mortgage.

"NetBank has a significant customer base," with about 168,000 customers and more than $2 billion in assets, says Rob MacKethan, founder and president of NetInsurance, and head of NetBank's insurance subsidiary.

Fully aware that the e-insurance marketplace is littered with failed dot-coms, MacKethan says NetBank will succeed because of the timely placement of products. "We are going to offer homeowners during the mortgage process," he says. "We can take the information during the loan process and we can create a customized insurance policy."

James Van Dyke, research director, financial services, at New York-based Jupiter Media Metrix, which at press time announced comScore Networks, Inc. (Reston, VA), had acquired certain assets of the Media Metrix Internet Audience Measurement service, says NetBank's strategy should be successful. "The sales pitch has to be targeted," Van Dyke says. "NetBank is in a position to better target its products...because it is smaller."

Van Dyke says that the bricks-and-clicks banks, such as Citibank, are direct competitors to NetBank. "The larger banks have problems because of the sheer number of products they have," he says. "Simply because Citibank offers a product online does not mean a customer is going to buy it."

No Dot-Bomb Here

MacKethan points out that pure online plays also do not work in the financial services space. "It is important to have a customer base that can communicate with you easily," he says. "The Internet is a great place to provide service, but it by no means can be the sole source of customer service. We will back the Web with licensed service personnel," in a call center.

Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio

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