Insurance E-Businesses Find Niches

FRAMINGHAM (01/28/2000) - The insurance industry hasn't had much success selling policies online, but some companies are finding niches to exploit anyway.

For example, ConfirmNet Corp., a San Diego-based startup, last week launched a service designed to eliminate an administrative headache for thousands of small, independent insurance agents. The service, called, issues by e-mail the certificates insurance agents usually have to fax to job sites to certify that a contractor or an individual is covered by liability insurance for a particular job.

Insurance agents could create these images and e-mail them to clients themselves. But their clients wouldn't be able to access the Web-based system and customize the certificates unless the agencies built an end-to-end application that provided clients access, said Dan McCarthy,'s vice president of sales.

Using, an agent with even primitive Internet capabilities can add a printer driver to a PC to convert a certificate into an e-mailable format that can be sent to the contractor, said McCarthy.

Insurance industry experts place the typical cost to generate, print and mail a certificate of insurance at $3 to $7 per item. In contrast, is charging customers 50 cents per fax and 33 cents per e-mail. That includes an annual subscription rate of $150 for members of the Independent Insurance Agents of America and $250 for nonmembers (plus a 5 percent discount on each transmission for members).

The costs "are certainly reasonable," said Carolyn Goodnight, information systems director at Schultheis Insurance Agency Inc. in Evansville, Ind., a 120-employee shop that began using the system earlier this month., a joint venture between Bolton & Co. and Atlantic Mutual Insurance Co. in New York, has found its niche focusing on Internet start-ups themselves. was created in June 1997 as a full-service online insurance carrier for high-tech start-ups. The idea was to cater to systems integrators, software developers and other small companies that bigger insurance companies would probably ignore because of the low commissions they initially would generate, said Rob Davidson, one of the company's co-founders, who works in South Pasadena, Calif.

To demonstrate its interest in cultivating startups, plans to launch an online service within the next two months that it calls the virtual risk manager. The system, a value-added service provided at no additional charge to customers, will continuously track a company's growth and trigger an electronic alert to customers that they may want to consider upgrading to umbrella liability insurance if they pass a threshold of, say, $5 million in sales, said Jeff Behm, another co-founder, who works in Madison, N.J.

That kind of attention is paying big dividends for The average "hit ratio," or percentage of customers an insurance company acquires vs. applications that are filled out, is about 15 percent to 20 percent. has consistently been in the 46 percent to 48 percent range for the past three years, Behm said.

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