QuickenInsurance: History

1
QuickenInsurance History

• Between 1996 and 1998 launch of
  QuickenInsurance.com marketplace
• October 1999 over 500,000 visitors
• 3Q99 over 225,000 auto quotes and 3,400 term
  life quotes
• In 2000 agreements with 55 distribution partners
• Early 2000 independent online insurance agent

2
QuickenInsurance History Cont

• Early 2000 licensed to sell life insurance in
  all 50 states and automobile insurance in 37
  states
• Early 2000 number 2 in customer satisfaction
• Summer 2000 relationships with 50 carriers
• July 2000 report auto insurance business slower
  than expected

3
QuickenInsurance Financials

• Consumer Finance Division Net income before tax
  ? negative from 1997 to 2000
• Costs
• Hiring and retaining the technical talent
• Product development and carrier implementation
• Marketing and sales
• Revenues
• Commissions for referrals and also on offline
  sales referred to the agents
• Up-front fee

4
General Insurance Industry

• 1990s large, inefficient, and highly fragmented
  insurance industry
• 1,100 property and casualty insurance providers
• 1,200 life and health insurance companies
• Mid-1990s expenses for agent-based carriers
  often exceeded premiums
• 1995 U.S. insurance industry a mature 270
  billion market

5
General Insurance Industry Cont

• 1996 ? growths of life and auto insurance
  premiums slowed respectively to 2.9 and 4.3 per
  year ? considerable
  consolidation
• 1999 commissions during the 1st year of a term
  life insurance policy ? to 40 to 70 of the
  revenues received
• Over the life of the policy, commissions averaged
  5 to 10

6
General Insurance Industry Cont

• Significant market potential
• Auto insurance represents the majority of the
  revenues
• Estimations with Internet distribution channel,
  10 to 15 per policy per year would be saved
• By early 2000 development of online sales
  channel (by established insurance carriers)