Mr. Enan: We were founded in 1995. We were one of the earliest companies to be formed specifically to take advantage of the Internet as a medium. We saw the medium as having a strong potential for connecting consumers looking for insurance and insurance providers willing to distribute it. During the past 12 years, we've worked hard to grow the number of consumers to the point where we are now reaching about 15 million consumers a year. We have also increased the number of providers - insurance companies and agents - with whom we work. This part was much more difficult; insurance is a very large industry that's anchored in tradition and conservatism, and it's very fragmented, so you have to reach out to a lot of companies in order to get critical mass. You have companies offering their products directly, say, GEICO; others use a network of independent agents, like Hartford or Travelers; and yet others, such as Farmers and Allstate, rely on their own, exclusive agents. As far as personal lines of insurance are concerned, a majority of policies are marketed by the latter group. Getting to all those providers and convincing them that the Internet is a viable medium was the biggest challenge we had.
TWST: How far have you come in overcoming that challenge?
Mr. Enan: We have come quite a long way. In the past couple of years, we made
pretty significant strides, to the point where most recently we were finally
able to post a profit. Prior to that we had been operating under the
conventional wisdom that consumers coming to us via the Internet were absolutely
not interested in direct contact of any kind with providers. We challenged that
wisdom about three years ago and found that while consumers were interested in
doing their preliminary research over the Internet, the majority wanted a
personal touch and the comfort of knowing that there is someone they could go
talk to if something went wrong, before finalizing a transaction.
Once we discovered that important fact, we set out to build a secondary platform
that enables us to deal with thousands of agents, a self-service technology
platform. That platform complemented the consumer-acquisition platform we had
already built and was deemed essentially complete in September 2006. This
enabled us to significantly reduce our head count and, in conjunction with the
ability to make more revenues from every consumer we acquire, led to
profitability. We now have two consecutive quarters of respectable profits.
Tickers included in this excerpt: INSW
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