RealTime IT News

Loss Growing at InsWeb

Online insurance marketplace operator InsWeb said today it expects to report a second quarter net loss between $7 million and $7.4 million, or 16 to 18 cents a share, worse than analysts' expectations of 13 cents a share.

The company said that the rate of expansion in its auto insurance offering this quarter "has been disappointing" and delays by a few partners have also impacted revenues; it also lost much of its health insurance income after a provider pulled out.

Sacramento, Calif.-based InsWeb said that revenues for the second quarter are expected to be between $5.3 million and $5.6 million, compared to revenues of $4.8 million for the same quarter last year, but down from the $7.2 million recorded in the first quarter ended March 31.

Operating expenses in the second quarter are expected to be between $13.3 million and $13.6 million, down from $18.6 million in the second quarter of 2000 and relatively flat compared to the first quarter's operating expenses of $13.4 million.

Last February, the company suspended online health insurance quoting, which had accounted for 22 percent of the first quarter's revenues, after its exclusive provider, eHealthInsurance, unilaterally terminated the relationship. At the time, InsWeb said that eHealthInsurance had filed suit claiming InsWeb failed to perform its obligations under their agreement.

Earlier this week InsWeb signed a deal with QuickQuote.com as new exclusive provider of health insurance quotes.

"Unique visitors, completed shopping sessions and submitted leads remain strong, especially considering that our second quarter is generally slower than our first, due to the seasonality of the personal-lines insurance market," said Mark Guthrie, president and COO of InsWeb, in a statement accompanying the financial guidance.

InsWeb stock was up 1 cent in early trading at 97 cents. Its 52-week high is $3.25; the low, 50 cents. The company is scheduled to report financial results for the second quarter on July 19.