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					             QuickenInsurance

                 Case Background


 Online insurance agency established in 1995 by Steven
  Aldrich
 Intuit purchased one year later; changed name to
  QuickenInsurance
 Opted to grow slowly, leveraging Quicken name and
  strategic partnerships over heavy advertising
  expenditures
 In 1999, represented 55 insurance carriers, and were
  licensed in all 50 states

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             QuickenInsurance

                Case Background


 Relied on Quicken.com for traffic as well as more than
  50 other online partners
 In July 1999, 30% of traffic came through
  Quicken.com, 20% through AOL, 17% through other
  partners
 QuickenInsurance founder and General Manager has
  been tapped to head Quicken.com




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              QuickenInsurance

                Problem Statements


How should Quicken.com grow?
 Should Quicken.com invest in promoting the brand?
 Is the integrated vertical portal model going to be able
  to withstand the pressure from other brand name
  distributors?
 Will the “slow but steady” approach work?




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             QuickenInsurance

               Industry Information


 Property & Casualty and Life & Health are $735 billion
  industry
 As percent of all insurance sales, still small: IVANS
  2001 web survey found less than 1% of all insurance
  bought across web
 Online insurance sales expected to grow from $155MM
  in 1998 to $4.1Billion in 2003 (Forrester)




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             QuickenInsurance

          Industry Information (cont’d)

 Major players:
   InsWeb
    eHealthinsurance
   Citigroup
    Geico
    Progressive
    USAA
    eCoverage

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                               QuickenInsurance

                          Industry Information (cont’d)




Brokers
                     Direct Sales   E-carriers      Carriers Own Web   EBrokers
- Dedicated Agents
                     - Geico                        Sites
- Independent                       eCoverage.com                      - InsWeb
                     - USAA
Agents                                              Geico
                     - AARP                                            - Quotesmith
                                                    Prudential
                                                                       - eHealthinsurance




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             QuickenInsurance

         Porter’s Five Competitive Forces

 Potential Entrants
    Individual Carriers
    Horizontal aggregators
    New vertical eFinancial site
 Buyers
    Some bargaining power - “spreadsheeting”
    Carriers can’t charge different prices through
     different channel by regulations

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              QuickenInsurance

         Porter’s Five Competitive Forces

 Suppliers
    Have bargaining power on commissions
    Some models want full broker commissions plus
     marketing fee
    No after sale service and no savings - only possibly
     expand market
 Substitutes
    Direct response carriers and agents are current
     substitutes

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             QuickenInsurance

         Porter’s Five Competitive Forces

 Industry Competitors
    InsWeb
    eHealthinsurance
    Citigroup
    Geico
    Progressive
    USAA
    eCoverage

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             QuickenInsurance

                 STEEP Analysis

 Situational Analysis
    QuickenInsurance has shown growth and is moving
      (slowly) towards profitability
    Insurance is not “core competency” of Intuit or
      Quicken
 Technology
    Dependent upon integration with insurers systems
    Out of 80 employees, 51 are technical
 Environment
    Patience for showing profit has dried up

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            QuickenInsurance

                STEEP Analysis

 Economic
    QuickenInsurance is not making money
 Political
   Nothing specific to online insurance




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                         QuickenInsurance

                                  SWOT Analysis
                QuickenInsurance                             Competitors’
Strengths        Name Recognition                            Cash from IPO (InsWeb)
                 Built in traffic from Quicken.com           Larger Market Share (InsWeb)
                 Recognized as the leading online            Built in traffic (E*Trade)
                    insurance marketplace (Gomez, 7/00)       Insurance is core competency
                 Technical infrastructure                      (Prudential, Allstate)
                 Close to profit
Weaknesses       Not yet making profit                         Not profitable yet for InsWeb,
                 Insurance not core competency                  eHealthinsurance
                 Not market leader                             Costs are high, may be too high
                                                                 for single carrier sites
Opportunities      Become supplier of insurance buying         $734.5 Billion industry – room to
                    services ala Inktomi                         grow
                   $734.5 Billion industry – room to grow      By 2003, P&C insurance sold
                   By 2003, P&C insurance sold online is        online is expected to go from 1%
                    expected to go from 1% to 7.3%.              to 7.3%. Life/Health from .5% to
                    Life/Health from .5% to 2.9%                 2.9%
                   In infancy in PLC for online insurance      For individual carriers, acquisition
                                                                 costs are lower on web: $50 vs.
                                                                 $139 for dedicated agent
Threats            InsWeb, E*Trade, Individual Carriers        QuickenInsurance
                   Other distribution channels: Direct         Regulation makes it difficult to be
                    Response, Agents                             innovative
                   Regulation makes it difficult to be         Other distribution channels:
                    innovative                                   Direct Response, Agents


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             QuickenInsurance

                Analysis of Problem

 QuickenInsurance is acting as an insurance broker
 E-brokers can offer consumer easy, one-stop shopping
  for insurance. Through use of internet, the potential is
  there for a consumer to comparison shop and apply on-
  line for an insurance policy
 Industry has concerns over using internet as sales
  channel - disintermediation
 E-brokers offer comparison shopping service, and
  perhaps application processing, but no after-sale service


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                  QuickenInsurance

                    Analysis of Problem


 Still not profitable
 Sales growing slowly: $5.3 MM in FY2000 compared to
  InsWeb FY2000 sales were $23.2MM with loss of $50.8MM
 Intuit stock $34.81 (2/16); 52 week high of $73.02




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            QuickenInsurance

          Analysis of Problem (cont’d)

 QuickenInsurance’s Core Competencies
    Ease of use in comparing insurance policies
    Ability to gather information as well as purchase
     through their site
    Good technical infrastructure
    Good at developing strategic relationships with
     both horizontal and vertical portals



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            QuickenInsurance

          Analysis of Problem (cont’d)

 QuickenInsurance’s Key Management Challenges
    How to grow business?
    How to make profit?




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