InsuranceNoodle announced yesterday that it is licensed to sell insurance in California, bringing its total to 34 states and nine of the 10 largest states in which the online company is doing business.
Licensing in Texas-the only large state remaining-is expected within a month. InsuranceNoodle offers small commercial products from AIG, The Hartford, Kemper, The St. Paul and Zurich, both directly to small business owners and to insurance agents. Property and liability, workers’ compensation, commercial auto, and surety are among the lines of insurance offered.
According to Robert Rudy, InsuranceNoodle chairman and co-founder, InsuranceNoodle offers agents a variety of options. They can either use the site for individual risks, retaining all the servicing functions, they can co-brand with InsuranceNoodle and turn over as much as the servicing as they want, or agents can sell a commercial book of business to the venture.
“The screaming need [from agents] involved two things,” Rudy said. “First, agencies are having some difficulty getting a full product range from leading carriers…Second is technology. The provide agents a very functional, streamlined product.”
If the agent retains the servicing function, InsuranceNoodle splits the gross commission with the agent 50/50. The more servicing an agent turns over to the company, the less commission they retain. When InsuranceNoodle was launched it did not include the agent component. But Rudy said agents were always a part of the company’s scheme.
“Building the agent functionality came second because it took longer. We were concerned with getting to market first.” According to Rudy, the business InsuranceNoodle writes today is split evenly between direct consumers and agents. “But we believe the independent agent will be the primary distributor.”
Over time, Rudy expects agents to produce 80 percent of the company’s business, with 20 percent being written directly. Interest in the California product started even before the official product launch. The website opened up to California last Friday in order to work out the kinks before driving traffic to the site.
Within the first hour of business, there were five requests for quotes, according to Rudy. He also said there are 50 California agencies ready to go live on the site. Currently, InsuranceNoodle has more than 70 agencies signed on nationwide, with two or three joining daily. The company hopes to push that number over 500 by July. Much of that will be through the addition of California and Texas, but they are also working on relationships with several state agent associations.
According to Rudy, the site receives about 1,000 unique users a day, resulting in 250 quote requests. Agent requests are closing about 50 percent of all quote offers, with consumer quotes closing at about 20 percent.
In addition to California, InsuranceNoodle is currently licensed in Alaska, Arkansas, Arizona, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, Maryland, Michigan, Minnesota, Missouri, Nebraska, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, Washington, West Virginia, and Wisconsin. InsuranceNoodle is on track to provide insurance in all 50 states by the end of second quarter 2001.
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