MOUNTAIN VIEW, Calif. - In a merger of insurance dot-com pioneers, Intuit Inc. is selling its QuickenInsurance online insurance-selling business to InsWeb Corp.
In exchange for the assets of QuickenInsurance, Intuit will get a 16.6% post-closing equity stake in InsWeb. Based on the closing price of InsWeb's stock on Nov. 24 and the number of shares expected to change hands, the transaction would be worth about $14 million.
Under a separate five-year agreement, Sacramento, Calif.-based InsWeb is to become the exclusive consumer insurance provider for Intuit's Quicken.com and QuickenInsurance Web sites and some of its consumer software products. In exchange, Intuit is to share in the revenues from these insurance sales. Intuit also is to help move the several Web sites that provide links to services at Quicken.com into relationships with InsWeb.
"The sale of our consumer online insurance business is consistent with our strategy to focus our resources on businesses where we have a sustainable competitive advantage or are on a path to achieve one,'' said Steve Bennett, Intuit's president and chief executive officer. In addition to insurance, Quicken.com offers financial advice, mortgages, online bill paying, and other financial services.
InsWeb was founded in 1995 and is one of the top online insurance marketplaces in the country. Customers can select from a range of carriers on InsWeb's site, including many that participate with QuickenInsurance.
Intuit said it plans to cease the online operations of its QuickenInsurance business, which are operated by its Intuit Insurance Services Inc. subsidiary in Alexandria, Va. About 75 Intuit employees will be affected, but some may be offered jobs at InsWeb or in other Intuit businesses.
The companies expect the transaction to close in the first quarter.