U.K. Web Insurer In Financial Crunch

RapidInsure, the British Online insurance website, announced that it has stopped accepting new business for the time being as it searches for additional financing in order to continue its operations.

Founded in February by Internet entrepreneur Darryl Mattocks, who sold his Online bookstore to Britain’s W.H. Smith chain in 1998 for £3.6 million ($ 5 million), RapidInsure was one of a number of dot com startups that entered the insurance industry in the last two years.

Offering general insurance for companies like Fortis and Hiscox, and with good financial backing, it built up a customer base of 3000, but the recent downturn in the investment market for dot coms, has seriously affected its prospects.

James Spalding, one of the founders and RapidInsure’s technical director, told London’s Financial Times that investor sentiment had definitely cooled. “Once dot coms could do no wrong now it seems they can do no right,” said Spalding.

All of the independent web insurance sites seem to be having the same problem. Australia’s QBE closed its Ironsure automobile insurance site recently when it failed to find a buyer for it. Many analysts are now questioning how rapidly insurance buyers are moving to embrace Online services.

RapidInsure, however, seemed to be doing well, and was 15 percent ahead of its forecasts, but unless further financing can be found fairly rapidly, it may be forced to close for good.