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(COMTEX) B: InsWeb Posts Net Loss, Prepares to Expand Online Services
B: InsWeb Posts Net Loss, Prepares to Expand Online Services
REDWOOD CITY, Calif., Jan 27, 2000, (A. M. Best via COMTEX) -- InsWeb
Corp.'s net losses deepened during the fourth quarter as the company
tripled its advertising costs and almost doubled its administrative
expenses. However, the company said it remains hopeful that e-commerce
will continue to grow, spurred by Allstate Corp.'s commitment to
Internet business.
InsWeb posted a net loss of $11 million for the last quarter of 1999,
or 32 cents a share, compared to a net loss of $10.3 million, or 42
cents a share a year ago.
Although revenue increased to $6.4 million from $2 million a year ago,
operating losses increased to $12.5 million, from $10.3 million for the
fourth quarter of 1998. Most of that loss came from sales and marketing
expenses of $11 million and administrative costs of $4.8 million, which
far outpaced revenue.
InsWeb officials remain hopeful, however. For the first time during the
quarter, California residents were able to buy their policies online
from InsWeb agents. This quarter, InsWeb plans to launch services that
will allow customers to pay for and receive policies online.
Also during the quarter, the number of companies offering automobile,
term life, homeowners, renters insurance and individual health and
other products increased to 49. The company also plans to unveil a
small group health product this quarter.
The company expects increased interest in the Web because of Allstate's
announcement in November that it would develop an Internet distribution
system. "We believe Allstate's decision has prompted many of the
nation's leading auto carriers to accelerate their Internet
strategies," said Hussein Enan, Insweb's chief executive officer.
InsWeb said it has also had increased traffic. During the fourth
quarter, the company hosted 610,000 shopping sessions, almost three
times more than the 163,000 a year ago.
Also during the quarter, InsWeb launched the first phase of a new
Japanese version called InsWeb Japan K.K., a joint venture with
Softbank Finance Corp., Marsh & McLennan Cos. and Microsoft. The
venture plans to launch an online marketplace this spring with Sumitomo
Marine & Fire, Dai-Tokyo Fire & Marine, Tokio Marine & Fire, Mitsui
Marine & Fire, Yasuda Fire & Marine, American Home, and Axa Non-Life
(BestWire, Dec. 1, 1999).
For the year, InsWeb posted a net loss of $36.2 million, or $1.17 a
share, from a net loss of $22.5 million, or 92 cents a share, for 1998.
InsWeb trades as INSW on the Nasdaq stock market. Shares were selling
Thursday morning at $16.125 a share--up 3.6% from the previous close.
The stock's value has dropped considerably since trading at a 52-week
high of $44 a share in July.
(By Theresa Miller, senior associate editor, BestWeek: millert@ambest.com)
Copyright (C) 2000 by A. M. Best Company, Inc.
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GEOGRAPHY: REDWOOD CITY, Calif.
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