Consumers Hesitant To Buy Insurance Online.

InsWeb CEO Hussein Enan believes that it's only a matter of time before online sales take off.

The Internet will play an ever-increasing role in the insurance industry and competitors had better learn to play the game online, the founder of one of the original online insurance aggregators and quote generators told insurers.

"Many insurers are missing the mark" when it comes to using the Internet to sell policies or promote their brand, InsWeb Corp. founder and Chief Executive Officer Hussein Enan told an audience of about 250. While he admitted that most customers are still leery when it comes to buying insurance online, Enan said he sees customers' attitudes changing rapidly. Likening the customer's fears about buying online to the gradual acceptance of automated teller machines for banking, Enan said doing insurance business online will sell.

"We've found that very few customers start the buy-online process to begin with," Enan said. "And of those, about a third go through the entire process. About a third of those then quit when they get to the point where we ask them for their credit-card number." Those, Enan said, are the customers who will get on board next.

InsWeb offers to the consumer information and price quotes from insurers. It gets transaction fees and commissions from the insurers for facilitating the application process. InsWeb is built on the premise that consumers will do more comparison shopping for their insurance and want a site that will bring all the information--and reputable insurers--to them. "We think it is much easier for the consumer to go to one site," Enan said. "They can fill out a generic form and get quite a variety of quotes."

Enan is hoping insurers become more sophisticated with their online presence, as he sees InsWeb as being perfectly positioned to work with more insurers on the Internet.

InsWeb, founded in 1995, completed about 1.3 million insurance applications in the first half of 2000. The company offers products from more than 40 insurers. InsWeb handles about 1.1 million consumer "sessions" a month.

InsWeb, however, has not been a profitable operation. In July, InsWeb posted a net loss of $21.6 million, including several one-time charges, compared with a loss of $9 million a year earlier.