The big-business insurance agency that Wells Fargo & Co. bought May 1 has now put it into the individual and small-employer health insurance market.

The mechanism: the partnership announced Monday between Wells' new Chicago agency, Acordia Inc., and the online agency eHealthInsurance Services Inc. of Sunnyvale, Calif.

Acordia has long offered health insurance to larger employers as part of its employee benefits package, but neither it nor Wells sell it to individuals and businesses with fewer than 50 employees.

Charles L. Ruoff, Acordia's chief marketing officer, said it plans to add health insurance to its affinity marketing arrangements with about 150 trade and professional associations. It already sells professional liability insurance and other Acordia property/casualty products to members of these associations, both online and off.

Acordia will earn commissions on sales made in states where it is licensed to sell health insurance, and fees in other areas.

Acordia's talks with eHealthInsurance began before the March announcement that San Francisco-based Wells would buy it, Mr. Ruoff said. If Acordia can successfully sell health policies to its own clients, eventually it may sell them to Wells customers too, he said.

Karen O'Brien, research manager of e-surance for International Data Corp. in Framingham, Mass., said small employers needing health insurance have been underserved for a long time, because it is costly and time-consuming for an agency to develop programs for small groups. "Providing it through online delivery makes it economical," she said.

Acordia customers can now click through its Web site to eHealthInsurance's. They and Acordia agents can use the quoting engine there to get information about health plans.

The site also provides side-by-side comparison of health plans from its 54 carriers, as well as online applications, and insurance purchasing.

Mr. Ruoff said using this technology will save time for Acordia's agents. "If I can get a quotation for a client in 10 seconds that would normally take me three days, and put it in a proposal format the same instant I get the quotation, I've cut a substantial amount of the cost," he said.

Terry Freeman, a managing consultant with Tillinghast-Towers Perrin in Atlanta, said the deal provides Acordia with a ready-made set of relationships with health insurance providers who serve its clients. Developing contacts with a series of new providers "is a lot of work" and a big part of the cost involved to an agency looking to add a new product line, he said.

Acordia may also be able to reduce the sales and marketing costs an agency usually incurs when adding a product line, because it is marketing through affinity groups, he said.

However, he warned that "many have tried to use affinity relationships with lots of products with less than spectacular results." Acordia's effort will only be successful if the members of its trade-group clients actually need health insurance and have found their group can be a viable place to buy it, he said.

Todd Eyler, a senior analyst with Forrester Research in Cambridge, Mass., said the agreement also lets Acordia add a product line for its customers without the costs of obtaining quotes and handling customer service on its own. "It's an efficient way to reach the small-business community, knowing they don't want to have their brokers on the phone with these people" for long time spans, he said.

The agreement is good for eHealthInsurance as well, he said. "In this environment I don't think eHealthInsurance wants to spend a lot of money on branded advertising or portal deals." By partnering with Acordia, it gets access to an existing customer base that needs its products, he said.

Acordia, the fifth-largest insurance agency in the country and now the biggest bank-owned one, is part of Wells Fargo Insurance. Their 2000 revenue totaled about $630 million last year.

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