To date, the success of selling insurance over the Internet has been mediocre at best. For instance, online personal financial portal Quicken.com sold its QuickenInsurance operations to Sacramento-based insurance portal InsWeb because Quicken's parent, Intuit (Mountain View, CA), determined that supporting the insurance site would not be cost effective in the near term. And, faced with limited funding, eSurance.com, a Web-based insurance company, was acquired by Folksamerica Holding Company, Inc., a subsidiary of White Mountains Insurance Group (Hanover, NH).
However, the backing of AIG, Prudential and Kemper may make this online venture different from current Web plays. ""These are three terrific companies,"" says Mike LaPorta, global leader, insurance, at De-loitte Consulting (New York). ""I think they have a great chance to be successful. For one, they are going to be able to share their collective industry knowledge on buying patterns. Secondly, they are going to share the cost for developing the technology and the business.""
For existing dot-com insurance sites, the entrance of Fusura-backed by at least three insurance companies-could spell trouble, says LaPorta. ""I would be threatened by this if I were at an insurance site,"" he says. ""The click-and-mortar companies are going to have an advantage over pure online plays. Fusura is going to have a lot of staying power, mainly because it has a lot of access to capital,"" from its three parents.
Other observers aren't so sure. ""I think it's interesting, but I'm totally prepared to take a wait-and-see attitude on this one,"" says Judy Johnson, vice president, insurance information strategies at META Group (Stamford, CT). ""They are trying to provide womb-to-tomb stuff. AIG is no good at it, Kemper is no good at it, the Pru is no good at it, so the three together? Who knows.""
Although he would not comment on the specifics of Fusura because the venture is so new, Ins-Web.com spokesperson Greg Jones did say that Fusura ""speaks well of the overall online-insurance marketplace business mo-del"" and that there is room for more than one player in the space. ""With our technology, strong marketing network and solid cast of participating carriers already in place, we remain confident in our ability to continue to deliver value to consumers and carriers over the long term,"" adds Jones.
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