The dot-com meltdown that has rocked retailers, investors and Wall Street is spreading to the insurance industry. In the past few months, InsWeb Corp. acquired QuickenInsurance.com from Intuit Inc., Esurance Inc. was acquired by Folksamerica Holding Co. Inc., while two online companies that provide insurance-related services-Ebix.com and Quotesmith.com Inc.-are in danger of being delisted from the Nasdaq.These events may be disturbing to proponents of online insurance, but they're neither surprising nor devastating. The Web has become cluttered with thousands of dot-coms selling toys, pet supplies or insurance, and consolidation was inevitable. The old adage, "it takes money to make money" is relevant to dot-coms as well, despite what some people may believe. Although it may be true that e-commerce companies have lower overhead expenses and are more nimble than traditional companies, they still need a predictable revenue stream to stay afloat and attract additional capital, and their failure to do so has sunk many of them.

Although venture capital financing has dried up, that doesn't necessarily mean it's time to write the obituary for online insurance firms. Last fall, Esurance aligned itself with a much larger insurance company that possesses the deep pockets that are necessary to fund online ventures. Now comes word that another online insurer, San Francisco-based ECoverage Inc., is searching for a white knight (see page 8).

I suspect similar arrangements will be consummated this year, but it should not be construed as a sign that consumers aren't buying the concept of online insurance. Keep in mind that banks first introduced online banking and bill payment services 10 years ago, but the concept didn't really catch on with consumers until the late 1990s. It is going take time for online insurance to become mainstream with consumers, and there are going to be some casualties along the way, but carriers should not be disheartened by the dot-com crash to the point where they mothball their e-commerce projects.

On a separate note, this month's issue of Insurance Networking sports a new look. We've redesigned our news section by adding quick capsule summaries to news articles, sharper graphics and an overall cleaner look. I also invite our readers to visit our revamped Web site, at

www.insurancenetworking.com, to read our daily news updates, participate in our Web poll, and send comments to me on how we can improve our products.

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