Linking For Success.

Executives are leaving traditional insurance companies in droves for the challenge and thrill of leading dot-com start-ups.

With the explosion in Internet start-ups, increasing numbers of senior executives are leaving the security of traditional insurance companies to take a chance on cyberspace. In fact, the rosters of some of these dot-coms read like a "Who Was Who" of the corporate insurance world, lined with the names of former chairmen, chief executive officers, presidents and chief financial officers who have bolted from big-name insurers such as CAN, Allstate, Cigna, Axa, Progressive and Nationwide.

They've defected for a number of reasons. Obviously, one draw is the prospect of long-term financial gains if the new businesses really take off. More often than not, though, money is not the overriding ambition. Instead, these executives say they're looking more for intangibles, such as greater autonomy on the job, a new direction in their careers and a more stimulating work environment.

And they all are eager to explore the opportunities that the Internet seems to offer.

To Richard Kerr, 43, former CEO of Lambert Fenchurch US Holdings, a Lloyd's brokerage subsidiary, and now CEO of MarketScout.com, this arena is as enticing as the California gold rush of the 1850s. "How can you stand on the sidelines?" Kerr asked.

Allan Ditchfield, a 35-year industry veteran, left Progressive for BenefitPort.com last year because he was intrigued by the latest technology and the chance to build a new system with no legacy requirements.

Richard A. Maloy Jr. was a teen-ager when he began working with his father at the Malay Insurance Co. He recognized the potential of technology early on and, starting six years ago, began bringing in technology companies as clients. Today, Malay heads InsureHiTech.com, which specializes in insuring technology companies and serving them on the Internet.

For Robert Rudy, timing was everything. With 20 years' experience in the insurance industry and the rueful observance of his 40th birthday, Rudy decided it was time to act on his youthful dream of becoming an entrepreneur. "I figured that, if not now, when?" said Rudy, now the co-founder and chairman of InsuranceNoodle.com.

People who make this kind of job change are risk-takers, said David A. Whitsett, professor of psychology at the University of Northern Iowa in Cedar Falls. An authority on motivation, work satisfaction and organizational change, Whitsett has worked as a consultant in financial services and insurance. He is co-author of Achieving Successful Organizational Transformation and Scenarios of Change.

"They are likely to lack autonomy" at their traditional companies, where "there's more group decision-making and they have to compromise more than they prefer," he said. One trend in financial services these days is to do things in teams, he noted. But these maverick executives "like autonomy and like to work independently. They see dot-coin start-ups as offering this, and they are probably right," Whitsett said.

More specifically, he added, these people tend to have high levels of confidence. "Their attitude is, 'I believe I'm a competent person; I can handle whatever comes up,'" he said. "These are people who take on change--they try something on the menu just because they don't know what it is."

That sense of inquisitiveness and daring can be contagious.

A Radical Change

Ask Sylvester Green and Don Urbanciz, each of whom had worked in the insurance world for 30 years or more and was not contemplating a radical change. In fact, Green had retired from Chubb Insurance as managing director and executive vice president, with no thought of crafting a second career. Urbanciz was comfortable in his job as president and managing director of Marsh Midwest. But then the founders of two different dot-coms approached them, asking if they could review the fledgling business plans.

Green was so intrigued with the start-up e2Value Inc. that he agreed to serve as its CEO. And the more Urbanciz learned about InsuranceNoodle.com, the more he wanted to sign on. After three months of weighing the pros and cons, he made the move. His only regret was that he was leaving behind many people who had supported him for years at Marsh.

It takes more than an intriguing concept to get venture capitalists to invest in a new insurance dot-com company. Investors want to see experienced insurance professionals behind the folks with the technological expertise, Green said.

An insurance background also is a valuable commodity in the dot-com world, because people with interesting ideas on how to streamline or enhance part of the insurance process electronically often don't understand how to wed their new technology to the old platforms.

Another reason to seek out insurance executives: they understand the decision-making process within an insurance company--a necessary ingredient when the dot-com needs to sign-on insurers as clients, Green said.

One of the biggest differences in the world of Internet business is the pace, Urbanciz noted.

"It's rapid-moving. This is definitely not for the fainthearted," he said. "Days go by quickly; weeks go by quickly. But we are having fun."

Quotes

Risk Takers Wanted

Esurance, an Internet-based seller of personal lines insurance, was established last year by a 17-year insurance veteran. Founder and Chairman Jean-Bernard Duler was vice president and general manager of Cigna International's 12 Western states when he left to start Esurance. He also had worked at Axa and FM Insurance.

One of Duler's first priorities was to assemble a team of insurance professionals, among them:

* Gary Tolman, president and chief operating officer. Tolman was president and treasurer of Talegen Holdings Inc., formerly Xerox Corp.'s insurance operations. He also had spent 15 years with Fireman's Fund Insurance Cos., where he was senior vice president and chief financial officer of its reinsurance company.

* Christopher Henn, senior vice president of insurance operations. Henn, who has 16 years of industry experience, was a vice president of auto product management with Nationwide Insurance Enterprise. At Nationwide, he also was vice president and general manager of Colonial Insurance. Previously, Henn was with Progressive Insurance Corp. for 10 years, where he ultimately became vice president/senior product manager of two nonstandard auto programs.

"The primary thing that attracted me was the business model that Esurance had put together," Henn said of his decision to join Esurance. "When I was at Nationwide, I was very aware of the transition that a lot of other financial-services businesses were making to go on the Internet. I was watching insurance and not seeing it happen."

Unencumbered by agents or a legacy computer system, Esurance launched its auto business in 24 of the most populous states in seven months. "A traditional insurance business would be hard-pressed to move into six states in that time frame," said Henn, who was drawn to the dot-com world by the entrepreneurial challenge of building something new.

It helps to be a risk taker and able to look at things in a new light, if you are going to enter the online arena, Henn said. But traditional organizational skills and insurance expertise are hard currency. Hired after the initial business model was conceived, Henn said, "One of my roles was to operationalize the concept. My ability to recruit people, to put together systems and organizations that can handle a lot of complexity--such as rolling out the 24 states--required a lot of knowledge of those states, knowledge of auto, and the ability to mobilize a lot of people around a task--skills that I had developed."

The growth spurt faltered in September as Esurance laid off 30 employees--one-quarter of its staff--and put some new projects on hold. By early October, business was back on track as Folksamerica Holding Co. Inc., a subsidiary of White Mountains Insurance Group, acquired a majority interest in the company for an undisclosed amount. As a subsidiary of Folksamerica, Esurance will operate independently as it works to regain its momentum with entry into the Texas auto market and an expanded product line that will include renters and homeowners insurance.

"We think our future business model is pretty solid," Henn said. "We are getting good activity to our site for our auto products. We expect to expand and increase customers."

Marilyn Ostermiller

The Lesser of Two Risks

Making the move from a large company to a relatively new Internet start-up was risky for James W Keating. But so was staying put.

In August, Keating was named senior vice president of BISNet, an applications service provider that enables companies to provide employee self service for benefits enrollment, information and education and employer administration. Keating had served as senior vice president for Marsh & McLennan's Johnson & Higgins/KVI subsidiary, but felt the company had become "a little disjointed" after the Marsh/J&H merger.

"Yeah, it is risky," Keating said of his career move. "But the rewards are much bigger as a result. I also thought it was risky to stay where I was."

One thing that impressed Keating was BISNet's patience. The Concord, Calif.-based company (www.bisnet.com) was founded more than three years ago, but it waited until recently to create a sales force while it developed products. Keating joined in August to lead the national sales effort.

"I'm not selling insurance anymore; I'm selling the platform to be able to deliver it," he said.

Keating said companies like BISNet will be the targets of mergers and acquisitions as the online insurance industry grows.

--David Hilgen

Keeping the Internet Cart in Place

After 35 years in the corporate world, including 81/2 years with Progressive Insurance, Allan Ditchfield finds the Internet to be an energizing environment for exercising his management and systems-building skills. In 1999, Ditchfield left his position as chief information officer at Progressive, the nation's 11th-largest property/casually insurer, to become an independent systems consultant and to serve as a director of an Internetbased bank and of BenefitPort.com (www.benefitport.com), a Web site that connects brokers serving small businesses with insurance companies providing group health plans and other employee benefits and financial services.

The lure of the new technology and the opportunity to build a new system with no legacy requirements drew Ditchfield into the Internet arena. "I carried legacy systems with me all my life," Ditchfield said. With Internet start-up companies, it's a totally "green field" and a challenge because the dot-coms demand that builders "do everything at once," he said.

Stephen Wiggins, BenefitPort's chairman, also came from a bricks-and-mortar insurer. He served as chairman and chief executive officer of Oxford Health Plans for 14 years. Wiggins was one of BenefitPort's visionaries, Ditchfield said. "I followed (his] lead."

Ditchfield has found that Internet start-ups need basic tools, such as planning and integrated testing, as much as traditional companies do. One of the biggest challenges Internet companies face is not rushing to expand before they understand what they're doing, he said. "You need to have your tools in place before you want the phones to ring," he said.

One of BenefitPort's advantages is that it began with proven expertise, Ditchfield said. The company's base includes two technology companies and five insurance agencies. Its network comprises more than 50 insurance carriers and more than 15,000 brokers serving 38,000 employer groups, according to company statistics. To use the Web site, brokers describe employer characteristics and type of policy desired. BenefitPort then provides an electronic report of available plans that meet the criteria. Online binding quotes and electronic enrollment are available if states and insurers allow them.

BenefitPort's success is measured by its competition, Ditchfield said. Other companies "say they're doing similar things, but we're doing it with experienced people," he said. BenefitPort began with operations in New York, New Jersey, Connecticut, Florida, Texas, Delaware, Virginia, Maryland and southeastern Pennsylvania. A company goal is to expand into more states and offer most carriers' products, Ditchfield said.

--Sally Whitney

Blazing New Trails

Richard Kerr finds the Internet's uncharted wilderness irresistible. That's why he traded his job as chief executive officer and chairman of Lambert Fenchurch US Holdings, a diversified insurance distribution company, where he enjoyed the perks and compensation of his position, for 14-hour days with Web startup MarketScout.com. "The Internet creates incredible opportunities. At this time, how can you stand on the sidelines?" Kerr said.

MarketScout.com uses the Internet and e-commerce as an accelerator in assisting insurance companies with product distribution. The dot-com company offers a list of 31 insurers, including companies such as CNA, CGU and Markel. These companies were selected based upon their expertise and are posted as MarketScout's "best of class" providers. MarketScout posts only one insurer per industry. For example, it chose Markel Corp. because of its ability to insure equine, camp and child-care risks.

The idea for Kerr's company came out of his experience in acquiring companies for Lambert Fenchurch. His job was to acquire independent agencies, managing general agents, third-party administrators and employee benefits companies. "Many of these companies were selling because they didn't have the technical expertise or market appointments to compete," he said. He sees MarketScout.com as giving agents the same tools as the large brokerages.

Kerr hopes MarketScout.com becomes "the place to go to when an insurance professional is looking for coverage or technical expertise in a 'best of class' venue." He finds the challenge of keeping up with the changing online world exhilarating. "The Internet moves at ultra-high speed. There are so many opportunities, you have to carefully manage your time," he said.

Kerr sees MarketScout.com signing up 100 more companies within the next year and is looking to move toward including health and employee benefits. He also has his sights on several eInsurance acquisitions.

"Our plan is to partner with 'best of class' insurers to control the purchase of insurance online," he said.

--Lynna Goch

All in the Family

As the fifth generation to be involved in 128-year-old Maloy Insurance Co., Richard A. Maloy Jr. started working alongside his father at age 15. In the 17 years since, he has transformed the venerable insurance agency into InsureHiTech.com, which specializes in insuring technology companies and serving them online.

Maloy began to bring in technology companies as clients about six years ago. It was an untapped market not well understood by agents and brokers and not adequately served by insurers and their products, he said.

Since then, the young Maloy has built the high-tech business and refocused the agency efforts on companies dealing in information technology, e-commerce, life science, telecommunications, environmental and venture-capital concerns. Last Dec. 31, he and other agency owners merged all of the customers of Maloy Insurance into InsureHiTech.com, then created a parent corporation, Insurance Revolution Inc., of which InsureHiTech is the first of several anticipated wholly owned subsidiaries. Maloy saw an opportunity to conduct business in a much better way.

InsureHiTech (www.insurehitech.com) is designed to fix the only part of the insurance industry that Maloy said is broken: its technology. He said the agency system works, but it needed a single-entry multi-carrier interface (SEMCI). "This will help insurance carriers drop the expense out of their models," Maloy said. "We have streamlined everything in the workflow process that used to drive everybody crazy--the agents, carrier and customer."

Under the new system, a customer can log in to the Web site, check the account summary on one screen, and "drill down" on that data to check details, "all without calling us," he said. And now that the agency has the most current and accurate data at all times, when the renewal process comes up, it just has to make minor modifications as opposed to filling out extensive applications every year.

Among the companies using InsureHiTech's platform are MG, Chubb, St. Paul, Royal, Kemper and Atlantic Mutual. The platform began with a base of 130 customers, Maloy said.

The company had tried to win funding early in the year. "When the [market] crash happened in April, we instantly became the right model," he said. "We were profitable and had an incredibly scalable model, and we have the carrier validation.

"We're looking to sell our platform to the other 40,000 agents and brokers in the U.S.," Maloy added. "It allows for commercial transactions to be done completely on the Web. We think InsureHiTech is the working lab for testing, validating and using this model."

The company won $10 million in funding from J.P. Morgan Corsair II Limited Partners and $500,000 from Base Camp Ventures. It also has received some smaller seed funds from AIG, St. Paul and Atlantic Mutual.

Next, Maloy said, Insurance Revolution will roll out best-of-breed platforms for health insurance and property/casualty personal lines. He predicted that the company eventually will integrate into "one large, cross-selling organization," in which the processes are driven on the Internet, but customers will also have access to call-assisted help or the in person presence of an agent. In 12 to 18 months, he expects the company to go public.

--Ron Panko

Building From the Ground Up

After 23 years in the corporate environment, Paul Farber was looking for the right opportunity to come along. "I enjoyed my time at 21st Century Insurance, but I was at a point where I was looking for something different," he said. At 48, Farber knew now was the time to make a move.

In March, Farber left his position as chief operating officer at 21st Century and became COO of ProcessClaims.com in Irvine, Calif. He since has been named chief executive officer. The dot-com company links insurance companies and collision-repair industries. It can manage material damage processes for field appraisers, independent appraisers and collision-repair facilities in an open architecture environment via the Internet. For instance, in a recent partnership with California-based insurer California Casualty Group, its processes allowed a collision center to set up a dozen claims transactions in less than 30 minutes.

Farber came to ProcessClaims.com in its infancy--he was the fifth employee hired. "They needed someone experienced in a corporation who was able to put things together," he said. Because of the size of the company, Farber is doing tasks a CEO normally doesn't do, like handling employee benefits and working with contractors. The hours are long and physically demanding, but that is balanced by the thrill of getting to build a company from the ground up, he said.

In the next year, Farber sees ProcessClaims.com signing up as many insurance companies as possible. It also will be forming new partnerships with rental car and salvage companies. Insurers also want ProcessClaims.com to expand its expertise into the homeowners line.

"There are lots of great ideas, but you can get distracted easily," Farber said. "If you go in 10 different directions, you're not going to achieve anything. So right now, we're focusing on developing market size."

--Lynna Gocb

More Alluring Than Retirement

It took a lot to convince Geoff Smith to join ePolicy, an online insurance broker for small businesses and professionals. At age 56, Smith was planning to retire after 30 years with Hartford Financial Services Group, where he had risen through the ranks to president of commercial affinity business operations in Hartford Commercial.

The folks at ePolicy sought his insurance expertise. They wanted Smith to help develop new business insurance products and strengthen relationships with top-tier carriers to build partnerships. Smith wanted to play tennis and enjoy retirement.

"I kept saying no, and they kept saying yes," he said.

In the end, Smith was drawn to ePolicy for the challenge and because the start-up was well-funded and had recruited many insurance professionals.

"I looked at it as one of the greatest new frontiers...in the sale of insurance," he said.

The Torrance, Calif.-based company (www epolicy corn) was founded in May 1999 by another longtime insurance professional, Don Martin, who is chairman and chief executive officer. Martin founded Cal-Surance, a brokerage in Orange, Calif., 37 years ago.

One thing that makes Smith's new job as executive vice president of business insurance interesting is the constant change at ePolicyAt Hartford, which employs about 26,000 people, change came slowly, he said. The 90 employees at ePolicy have to be nimble to react to daily changes.

One such change that could come for ePolicy and other online insurance brokers is consolidation, Smith said. "That'll occur because there's too many trying to do the same thing," he said.

--David Hilgen

A Different Pace

As the chief operating officer for America's Choice Healthplans, Keith Mock is bringing expertise to the 1year-old dot-coin while thriving on the enthusiasm of his younger colleagues. "The owner is 38 years old, and most of the employees in the IT department are in their 20s. I'm the old man at 43," Mock said.

Mock made the change from being chief operating officer for the managed-care unit of Health Risk Management to America's Choice Healthplans in July partly because of the draw of the fast-paced business environment of the dot-coin life. But mostly, he believes that insurers should handle claims promptly and provide good customer service. "Insurance companies today can't take phone calls from policyholders and pay claims on time," he said. "They have become ineffective and distant."

America's Choice Healthplans (www.achonhine.com) works with third-party administrators and offers 24-hour online access to medical claims and health coverage, while taking care of back-end duties, such as paying claims. Members also can search for providers, check on benefits, add or remove dependents and participate in disease-management programs. This allows the plan's administrators to focus on front-end profit-making tasks, such as marketing and reinsurance, Mock said.

Since joining America's Choice Healthplans in July, Mock is working 18-hour days, seven days a week. "One day in this world is equal to three months in the old world," he said. The speed of business and enthusiasm of the younger employees are "the motivating factors that get me going every day."

But that zeal and flow of adrenaline also can be Mock's biggest challenges when it comes to rules and guidelines. "The art is to know what structure is needed so you don't dampen enthusiasm," he said. "That keeps me up at night."

Mock said he expects America's Choice Healthplan to write 20 times more business in the next year. "We almost doubled our business since July," he added.

--Lynna Goch

Streamlining Property Appraisals

Sylvester Green had no intention of beginning a second career when he retired from Chubb Insurance after 36 years with the company.

But Green, who was a managing director and executive vice president, responsible for all Chubb's U.S. and Canadian operations, became intrigued with a dot-com start-up after the two founders asked him to review their business plan and make recommendations.

"When I retired, they were brave enough to ask me to consider taking it to market," said Green, who is now chief executive officer of the company, e2Value Inc. As he presides over the transition of e2Value from initial start-up through market valuation, Green oversees raising capital, management, customer development and marketing.

"I have an opportunity to mentor the two founders," Green said, explaining what attracted him to this new venture. "I have a chance to develop their skill sets and turn them into a driving force."

E2Value has a Web-based property-valuation appraisal system with digital photo transfer capabilities. The system is designed to make property appraisals quicker and more accurate and to provide more underwriting information. The e2Value system allows the adjuster to file an appraisal report and photos electronically.

The electronic filings build on a database that can be used to help insurers examine all their risks. It also builds appraisal training and consistency into the process, Green said.

"I've always had an interest in finding a better way to get things done," Green said. "For a lot of reasons, particularly the cost of technology and the investment in the legacy systems that dominate the business, in many companies this would never be a top priority. I see it as providing a solution they can't provide for a significant part of their business."

And it can help insurers outsource an increasingly complex process, eliminating the expense of upgrading their systems. "At Chubb, we were growing our business by double digits," Green said. "We were having tremendous growth, but it was a challenge to keep up with appraisals. To hire and train and sustain that effort internally was a huge challenge for us. This is offering a solution for insurance companies that have tremendous outsourcing capabilities."

--Marilyn Ostermiller

InsuranceNoodle Builds An All-Star Veteran Team

Barbara Bowers 

Robert Rudy is co-founder and chairman of InsuranceNoodle (www.insurancenoodle.com), a Chicago-based insurance broker that provides small business owners with online comparative quoting, advice and the ability to purchase policies from leading insurers, including CNA, Hartford, American International Group, St. Paul Cos. and Zurich U.S.

Before taking the dot-com plunge, Rudy, 41, spent 15 years in more conventional roles in the industry, namely as vice president of corporate strategy for Provident Mutual Life and senior strategy officer at CNA. He also was a consultant with McKinsey & Co., specializing in financial institutions and distribution strategy.

Now he is helping to steer a fledgling online business as it rolls out to 50 states, with support from a management team whose members average more than 20 years in the insurance and financial services industries.

In an interview with Best's Review, Rudy said that a number of factors combined to fuel his start-up fever.

Q: Why did you make the move from working in the traditional corporate world to co-founding a dot-com?

This goes back to my overall career objective, which I formed 20 years ago--to do something that has never been done before. I did not know exactly what that meant until recently, but I always viewed my first 20 years in business--a combination of consulting and industry experience--as a training ground for what I wanted ultimately to do.

I had been thinking about becoming an entrepreneur since my first job after college. It was with the NASD, the National Association of Securities Dealers. My job, every day for two years, was to read the prospectuses of new companies. I had to determine whether the investment bankers were violating any NASD or SEC regulations as they underwrote and issued securities. It was a very interesting experience in that I analyzed over 1,000 deals, and saw lots of companies that began with an idea and that needed to go to the market for funding. So early on in my career, I saw entrepreneurs and innovators creating new companies and said, "Someday, I'd like to do that myself."

Other Top Players

Chief Executive Officer Don Urbanciz has more than 30 years of experience in the insurance industry and has built up contacts with CEOs at many of the top 20 property/casualty companies. He was president and managing director of Marsh Midwest and a former CEO of Aon Midwest. At InsuranceNoodle, Urbanciz is responsible for day-to-day execution, operations and profitability. He also is active in forging partnerships and alliances.

Urbanciz said he spent 3 1/2 months considering the move to the dot-com before he decided the change was right for him.

"I thought at this stage of my career and at my age--51 now--that this was a unique opportunity to use the knowledge I acquired over 30 years in the business and mold it with technology in our industry," Urbanciz said. "It was the opportunity to use technology in a different fashion."

One obvious contrast between his former and present jobs: he left a company that had 700 employees for a firm with fewer than 30 staffers. "The main difference right now is the ability to quickly communicate and stay focused on what needs to be done," he said. "That's the advantage of being a much smaller operation."

His biggest challenge is "to stay equal to or just a tad ahead of the demand factor," he said. "What I'm finding Out in this business is that spending must not be too far ahead of the customer or too far behind, We're always measuring where the customer is, so we're not spending too much on technology" at a given time, he said.

Richard Madock, co-founder and president of InsuranceNoodle, focuses on strategy, growth and business development for the dot-com. He is a former president of CNA's small-business insurance division. Prior to that, he was chief operating officer of a $350 million financial-services subsidiary of Alleghany Corp. In all, he has more than 17 years of experience in senior operating roles at insurance and financial services firms.

Tim Adelman, a certified public accountant, has 16 years' experience in distribution economics and agency acquisitions. He has served as the chief financial officer of Aon Enterprise. Now he is CFO of InsuranceNoodle, handling primary financial and administrative responsibilities.

As vice president of business development at CNA Life, Andrew Wood was responsible for e-commerce partnerships. That's part of his new job description at InsuranceNoodle, where, as vice president of business development, he handles the development and execution of all marketing strategy, as well as the implementation of e-commerce/business partnerships. Wood also has served as a senior manager at Andersen Consulting.

Kathryn Emmerson has more than 20 years of insurance brokerage experience as a former executive vice president of Aon Risk Services Cos. and senior vice president of Marsh, where she was in charge of relationships with major clients and insurance companies. As managing director of the dot-com, she is responsible for insurance company and affinity partner relationships.

A 25-year industry veteran, Barbara J. Miller is vice president of customer service for InsuranceNoodle, meaning she oversees and directs all staffing and operations for its customer service center. This includes training and program development for the customer service representatives. She has brokerage, agency and insurance company experience as a former vice president and team leader for Aon Enterprise and Risk Services.

Here, we're all substantial shareholders in InsuranceNoodle, so it's no stretch to think like a shareholder.

We also definitely share a common vision of the opportunity here, and are excited about how we are, again, doing something that has not been done before.

We all took pay cuts to join InsuranceNoodle, but the long-term value of what we are building and the market acceptance of our ideas are what's rewarding.

Q: Are there considerable differences between working in the traditional corporate setting compared with what you're doing these days?

Yes. I would say that we move very fast, make decisions incredibly rapidly and often go with our gut. Especially early on in the gestation of this business, we made some decisions that, in retrospect, would never have been made at a larger company. Here's an example: We went live with a "soft launch" on July 5. We had an incomplete product line and rudimentary customer service capabilities, but we wanted to be in market to learn directly from customer feedback. At a large company, we would have spent lots more time researching issues and building our site functionality. Nothing wrong with that, but we would have probably over-engineered the site. It turns out that our customers want less, not more features. That was counterintuitive to us until after we launched.

We're also very focused--there are no legacy issues to deal with or constituencies to think about other than the customer or agent we're serving.

To give you a sense of our speed, we started developing the site in February, built a prototype and raised $1.5 million in seed capital to get us to market. In July, we went live on the Internet. Over the August-September timeframe, we rounded out a full product line, built a call center and raised another $10 million in venture capital. We are on track to be licensed in almost all states by the end of November. That's moving pretty fast considering that up until recently we had only 10 employees. We now have 28 employees.

Q: What's been the biggest challenge in all of this?

The biggest challenge is to stay focused. We can all describe exactly what we're doing: building an efficient platform for customers and agents to use for sourcing small-commercial insurance. That's pretty easy to say in a short sentence. However, as you look at the operational infrastructure we must build to make that happen, as you look at the distribution networks we need to sign up to drive revenue, as you look at the people we need to hire, you quickly get a very long to-do list, We need to keep checking that to-do list against our major priorities and keep the focus on building the company while serving customers so they will choose us as their insurance solution.

We spend a significant amount of time making sure we're all on the same page. That's important, because even in a small company driving toward something that's very tangible, staying on track won't happen unless you make it happen.

Also, attracting the best people takes a lot of time. We take it very seriously That's something I learned at McKinsey--your people can differentiate you in the marketplace. We receive letters from customers telling us how well they've been treated, and that's no accident.

Q: What lies ahead for the company?

Our original business model called for us to serve the end customer, the small-business owner, exceedingly well by providing tailored products and carrier choice. We planned to build up the Noodle Network, our agency technology platform, later. But as it turns out, agents came to us, seeking our technology, so we're shifting our priorities to serve the existing agency network that currently owns the strong customer relationships.

But we won't lose focus on the small-business owners' needs. They pay the bills around here.

Right now, we are developing distribution partnerships with established insurance agencies and financial institutions looking to expand their insurance product offerings. We are also becoming well-represented on Internet sites where small-business owners conduct e-commerce.

We will continue to refine our value proposition, tailoring it more and more precisely to each of the 250-plus small-business customer segments.

Q: How did you know the time was right to do that?

Well, with a couple years under my belt in terms of industry experience and with the overwhelming opportunity represented by e-commerce and the Internet, I figured that if not now, when? And, I guess, the milestone of turning 40 forced me to ask myself some basic questions, such as, what do you want to do with the rest of your life?

Q: What's your vision in co-founding this company?

The overwhelming vision is that there's a huge opportunity in serving small business owners' insurance needs in a completely different way--both more effectively and efficiently. In terms of effectiveness, we bring the customer a much richer set of product offerings than the average local agency by virtue of the technology we're investing in and our robust insurance product line from the leading carriers. As for efficiency, our technology platform is designed to compete on a national scale, with an extremely low cost per transaction, focused on a huge market opportunity--small businesses.

This technology platform can be used by agents or customers to access the best tailored insurance solution for any small business risk. In short, the vision is to change the way small-business owners or agents source small-commercial insurance.

Q: Looking at the backgrounds of your top people, there are common threads: CNA, Aon and Marsh crop up repeatedly. How did you recruit these people?

Rick [Richard Madock] and I met each other about a year ago at CNA while working on a distribution strategy for their commercial insurance unit, which Rick ran. We realized that buyers want independent advice and choice. That choice is best provided in the independent agency or brokerage model, where you offer the products of multiple carriers.

I left CNA in November of 1999 and started cooking up this business model. He left two months later to co-found the company with me.

Don Urbanciz, who is our CEO, was a senior Marsh executive who previously spent over 20 years at Aon. Rick and Don had worked on a couple of projects together over the years, and Don was nice enough to be a sounding board for us while we were formulating our business plan. He became more and more interested in what we were doing and liked it so much he decided to join the company in April. His contacts in the industry were invaluable in cementing relationships with carriers and agencies.

So, the three of us just jelled as a team over the last year or so.

Andy [Andrew Wood] and Rick had worked together at CNA. Andy saw the opportunity, liked what we were doing and became the first employee we hired and an early investor in the company. He focuses on marketing.

Don has a great network in the insurance world and brought in Kathy Emmerson, who was at Marsh. She's doing a great job heading up product development for us.

Q: Was it fairly easy to pull these people in? What was the enticement?

For different reasons, we all decided it was time to make a move. As you work in a big company, it's often difficult to measure the impact you have as an individual, because things are done by committee and sometimes take a long time to bear fruit.