The rise and fall of San Francisco-based eCoverage Inc. isn't the only dot- com whose demise has surprised industry experts.In late April, Chicago-based, the first independent business-to- business online marketplace to link agents and brokers with specialty insurance carriers, ceased operations after failing to raise additional funding.

Following on the heels of this disclosure was the announcement in late May that, a Web operation launched by Wausau, Wis.-based Wausau Insurance Co., was planning to discontinue service by the end of the year. was more than a Web site-it was a separate business unit dedicated to serving small-business owners seeking business owners policies, workers compensation insurance and other like products.

Wausau had spent a handsome sum on launching and tweaking the business- particularly in the expansion of its technology-over the last year.

eWausau executives listed four "cornerstones" in building a successful Internet program, two of which were "patience and strong financials." In the end, Wausau executives gave less than a year to build a following.

But each of these providers faced underlying challenges that went undetected. "Nobody can predict if a consumer or a business is going to change their behavior and embark on new habits," Todd Eyler, senior research analyst for Cambridge, Mass.-based Forrester Research Inc., says.

Eyler theorized on the trouble probably faced. "A small-business customer may have gone to eWausau but weren't comfortable binding a policy directly online, without the counsel of an agent. For small-business owners, their business is their main asset. So even though they may view the Web as a tool that saves time and money, many of them probably decided to research on eWausau before going through an agent to bind the quote. The savings of using the Internet was not compelling enough for them," Eyler explains.

The component appealing about, industry observers say, is that it featured a tightly focused model. It enabled brokers to match the specialty commercial lines coverage required for their clients to the appropriate carriers and managing general agents (MGA). Once this was determined, would then simultaneously forward multiple submissions to those carriers.

The marketplace was also free to agents, while insurers and MGAs also paid no registration or subscription fees to make their products available. In return, they received an added distribution channel to sell their products.

However, the specialty insurance segment consists of a small fraternity of players with a devout and traditional clientele who prefer face-to-face meetings rather than doing business in front of a PC screen, experts say.

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