InsWeb buys Benelytics
The insurance Web site will broaden its offerings with Benelytics' strength in health insurance, heating up the competition with Intuit's Quicken.com.
InsWeb sees the Benelytics acquisition, whose terms were not disclosed, as a way to broaden its offerings in health insurance. It positions the privately held firm, which received a $30 million investment last month from Softbank, to move ahead of rival Intuit, which also offers insurance on part of its Quicken.com Web site.
"It's a huge play to be the insurance portal for individuals," said Bruce Temkin, an analyst at Forrester Research, noting that online insurance sites are competing to offer multiple kinds of insurance so consumers will return to the same site to buy different forms of insurance.
InsWeb began several years ago focusing on auto insurance, while Intuit acquired InsureMarket, which has focused on life insurance. Health insurance quotes on Intuit's site are provided by online broker QuoteSmith, but Intuit is expected to expand that relationship soon.
The two founders of Benelytics, Art Young and Charles Marshall, launched that company to focus on group health plans after working 20-plus in benefits and human resources at Hewlett-Packard and elsewhere. They will continue to manage Benelytics and work to add health insurers to InsWeb's consumer-oriented service. InsWeb's now offers health coverage from Mutual of Omaha, Blue Cross/Blue Shield of Florida, Blue/Cross Blue Shield of New Jersey, and United Security Life.
After auto insurance, health coverage is the second most-requested type of insurance for consumers, said InsWeb Chairman Hussein Enan, who believes online insurance can help address the health insurance crisis that leaves millions of Americans uninsured.
"Most of the unavailability stems from the fact that people aren't able to locate providers that want them," Enan said. "In most cases, someone wants to write your business. The difficulty is in locating one whose premium you can afford to pay."
Selling insurance online can be cheaper for insurance companies, because a potential customer's personal data can be transferred directly without being typed in by a clerk. It also reduces calls to an insurer's call center and can cut out middlemen, if the insurance company chooses to use that capability. Some of those savings may be passed on to consumers.
In the second half of 1999, InsWeb intends to add group health insurance for companies with 50 employees or fewer.
"We are seeing InsWeb moving forward widening its scope and bringing in the expertise in the employee benefits marketplace," said Gary Craft, who follows online financial services for BancBoston Robertson Stephens. He values that segment at about $500 billion a year, generally larger than the market for individual health plans.
Craft said Benelytics platform lets brokers move data from applications to health plans that are interested in bidding for that business.
Benelytics offers a service called Doctor Exchange that lets individuals determine which health plans their personal physicians belong to, helping them pick plans that will let them keep their current caregivers. It currently offers information on 40 health plans and 33,000 primary care physicians in California.
It also will list all physicians covered under different health plan options for individuals who don't have a personal physician.
InsWeb also intends to offer Medigap and other private insurance products to older Americans, to fill in services not covered by Medicare.
InsWeb currently runs the insurance center on Yahoo and plans a Japanese joint venture with Softbank. Through Chinese Cyber City it also offers InsWeb insurance in Chinese.