In an attempt to blaze a new trail in the insurance Web marketplace, Kemper Insurance Cos., American International Group Inc. (AIG) and The Prudential Insurance Co. of America have joined forces to create a Web-based insurance agency.The independent company, called Fusura, has begun agency licensing procedures on a state-by-state basis. It will be available online in a few selected states (yet to be determined) by the end of this year, with all 50 states eventually phased in. Fusura.com will first offer auto insurance and then add other personal lines in the future.

Rick Bender, who is acting president of Wilmington, Del.-based Fusura, says the company also will market itself through other distribution channels that include large banks, brokerages and other financial institutions, as well as specialty Web sites such as those selling automobiles.

Commissions will be the primary revenue source with other revenue streams to be determined at a future date, he adds, but declined to disclose the founding companies' capital or financial investment in the venture.

Filling a void

Industry observers say a Web site that offers competing quotes from established carriers along with the capability to buy policies online will be solid marketing advantages for Fusura.

"The ability to choose between three credible and financially committed companies such as Kemper, AIG and Prudential is a strength," says Todd Eyler, a senior analyst at Forrester Research Inc., Cambridge, Mass. "The capability for nationwide online buying also is important. Very few carriers offer the opportunity to buy an auto insurance policy directly online, and those that do typically only offer it in a few states."

Kemper, AIG, and Prudential will continue to maintain their own individual Web sites in addition to their joint partnership in Fusura. To further promote customer choice and service, Bender says Fusura eventually will include a fourth equity partner and non-equity branded carriers also will be recruited to round out the product offerings.

Fusura's long-term success will depend on whether the company can create new, Internet-based insurance products, Eyler says.

Plus,"it is difficult for online consumers to answer questions, fill out forms, determine the coverage they need and then do quote comparisons. Unless procedures and insurance products change drastically, ventures such as Fusura may not succeed in the long run."

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