More HCOM: From the Atlanta Business Chronicle Press....
March 22, 1999
HomeCom shifts into gear with InsureRate site
Tom Brooks Contributing Writer
E-commerce is revving up the automobile insurance industry, and an Atlanta company is emerging as a major player in the market.
Seeking to expand its presence in the insurance marketplace, HomeCom Communications Inc. (Nasdaq: HCOM) launched its InsureRate subsidiary one year ago.
HomeCom officials have reached agreements with insurance companies and other businesses that provide Internet links to the InsureRate site (http://www.insurerate.com), where various types of insurance are sold and marketed.
"The Internet has radically changed the financial services industry," said Harvey Sax, HomeCom president and CEO. Atlanta has become "a very strong Internet insurance capital."
Some insurance companies have launched Internet sites to sell and market auto insurance directly to consumers.
Companies also have established relationships designed to promote e-commerce, including connections made with high-volume Web sites such as those owned by media conglomerates. Ties to Web sites used for marketing automobiles and other related companies have been established.
Cost savings and convenience are key reasons for individuals to look for auto insurance on the Internet, according to HomeCom executives.
"Auto insurance is a market that is extremely inefficient," Sax said. HomeCom homecom.com has developed a range of Internet, intranet and extranet applications for the insurance companies, he said.
Sax founded HomeCom as a software development company in the fall of 1994. Headquartered at Piedmont Center in Atlanta, HomeCom has undergone a transition toward e-commerce since late 1997.
By concentrating on e-commerce in financial services industries, HomeCom is emerging as a leader in its field, Sax said. The company, which now has more than 100 employees, is seeking new workers, he said.
HomeCom is expected to have about $12 million in revenue in 1999, up from about $8 million last year, Sax said.
HomeCom officials announced in early March that company shareholders approved its merger with First Institutional Marketing Inc. (FIMI). Based in Houston, FIMI markets insurance, annuity, and other financial services to more than 100 banks throughout the nation, officials said.
"We've found our calling, and we're doing pretty well at it now," Sax said.
FIMI President Dan Delity and Tim Higham, HomeCom vice president of insurance services, are among key HomeCom executives with strong e-commerce backgrounds, Sax said.
An agreement between HomeCom and the Web site for the USA Today newspaper usatoday.com to provide access to InsureRate and advertisement exposure for the company at that site was announced in late February.
The e-commerce insurance market has "a number of aggressive players out there now," said Curt Goetsch, who joined HomeCom this year and is director of property and casualty development.
The USA Today site has about 28 million "impressions" recorded each month, Goetsch said, which will be about the number of times HomeCom officials expect to reach Internet surfers when the arrangement takes effect this summer. "That's a lot of people," Goetsch said.
Officials expect to soon announce another acquisition, Sax said. He declined to identify the company, but said it would be "a Web application developer with stock brokerage background" based in the Midwest.
So far, it has been an active year for companies competing in the e-commerce marketplaces for auto insurance dollars. Officials with Redwood City, Calif.-based InsWeb Corp. announced in March that the insurance marketer had been named the exclusive insurance service provider at the CarSmart.com site carsmart.com , increasing its reach into automobile-related Web sites. Other national companies market and sell auto insurance over the Internet, including Progressive Corp.
With insurance regulated by individual states, HomeCom has worked its way through lots of paperwork to complete deals with other companies, Sax said.
Martin Grace, associate professor of risk management and insurance at Georgia State University, studies regulatory issues related to e-commerce and the insurance industry. He said the National Association of Insurance Commissioners, an organization made up of the country's top insurance regulators, is examining ways to make insurance licensing regulations and other rules less burdensome in the emerging age of e-commerce.
Insurance agents should not be overly concerned that the growth of e-commerce insurance markets will reduce the need for agents to directly assist people shopping for insurance, Grace said. "The Internet hasn't really done anything the market hadn't already done to agents," he said.
Georgia Insurance Commissioner John Oxendine said he and other officials in his office are taking a close look at improving e-commerce for auto insurance customers. "My job as a regulator is to make sure those changes in no way harm the consumers," Oxendine said.
Although efforts will be undertaken to make insurance policies accessible through the Internet, licensed agents still have to back the plans. "I can't give an insurance license to a computer terminal," Oxendine said. "I need to have a licensed agent that is putting his or her name on the line so I've got someone to go after if that consumer is mistreated."
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