Insurance price comparison service Quotesmith.com will start an auto insurance shopping service next month in an attempt to tap into the $100 billion market.
Quotesmith.com will offer consumers a multi-insurance quote engine. The company has signed agreements with approximately 40 auto insurance providers and plans to partner with at least 200 companies during the next two years.
Quotesmith.com will receive an average commission of 12 percent of the premium of each auto insurance policy sold through the site.
“You compete in this market by offering a deep database and choice,” said Robert Bland, chairman/CEO of Quotesmith.com, Darien, IL.
He said the company will provide quotes from large national providers targeting low-risk drivers as well as providers that target senior citizens, youthful drivers and other high-risk groups.
Competition in the online auto insurance comparison arena includes InsWeb and NetQuote. Bland said competitors tend to cater to low-risk drivers. He added that Quotesmith.com is also competing with online insurance providers that offer only proprietary policies, such as GEICO Direct's online services.
InsWeb has partnerships with 23 auto insurance providers.
“We don't want to present the consumer with 20 or 30 or 100 quotes, which could be intimidating,” said Greg Jones, vice president of public relations at InsWeb, Sacramento, CA. “There is a point of diminishing returns if you offer too many quotes.”
He said InsWeb has accumulated more than 7 million consumer profiles.
Quotesmith.com will target white-collar professionals older than age 29 with an annual household income of at least $70,000.
“We want to target experienced and self-directed insurance shoppers,” Bland said. “Usually white-collar people feel very confident in doing their own research.”
He added that while many auto insurance companies target consumers older than age 40, he expects that Quotesmith's partnerships with insurance companies that offer lower rates for high-performance cars will attract a slightly younger demographic.
Quotesmith.com will initially roll out the service in high-population states, including New York, California, Florida, Texas and Illinois.
The company plans to launch an online and offline marketing campaign in April to alert consumers about the service. The campaign will include e-mail alerts to the company's 100,000-member customer base and prospective customers through yet-to-be-selected e-mail lists; an undisclosed number of direct mail pieces; local newspaper inserts; and national radio and magazine advertisements in publications such as Worth, Money magazine and Forbes. The company plans to spend more than $10 million on marketing this year.
During the past two years, Quotesmith.com has served as a referral service for auto insurance provider Progressive Insurance. Quotesmith.com also provides comparison services for term life, dental, long-term care, home, medical, homeowners, small business, disability, boat, watercraft, recreational vehicle and motorcycle insurance.