TWST: What is Insure.com?
Mr. Perillo: We are a consumer-oriented insurance information service and brokerage. We offer articles, various calculators and other tools on our Website to help consumers learn about insurance and decide what kinds and amounts of insurance they might need. We also offer customers the ability to purchase various lines of insurance online, over the phone or from local agents.
TWST: How did the company get started? If we were speaking 12 months ago, what were your goals and expectations? Give us your report card for that period.
Mr. Perillo: We were formed back in 1984 as Quotesmith Corporation. At that time, the company was providing life insurance quote information to other agents using the forerunner of the Internet, the old Hayes modem. This was a subscription service set up by our CEO and Founder, Bob Bland. With the advent of the Internet, Bob Bland saw an opportunity to use our database of insurance rates to provide life insurance to consumers without the need to meet face to face with an agent. The company changed its name to Quotesmith.com and went public in 1999. The offerings were expanded to include health, auto and homeowners insurance, and we continued writing business almost exclusively over the Internet until about 2004. At that point, we realized that we ought to be offering our customers the opportunity to buy over the phone, knowing that some people might have questions and want to talk to a live person. So we started offering a telephone service for the sale of life insurance. Since then, we've been building up our telephone sales capabilities. That has been a growing process, with the attendant expenses of hiring agents and getting them trained and licensed. Today, we have about 50 agents on staff, but not all of them are fully trained and licensed yet. We are probably a quarter or two away from seeing the full revenue capability that we think we can achieve from our call center.
TWST: What's the agenda for the next 12 months? What would make that time frame a success?
Mr. Perillo: We are working on two things. One is completing the development of our call center. We're also working on expanding our local agent option for our customers. We realize that a lot of life insurance is sold face-to-face in the country, and some people are not comfortable dealing either over the phone or over the Internet with a person they can't look in the eye. So we've been building a local agent option. If the customer is interested, we will direct them to a local agent who can service their needs. Once both of those facilities are fully in place, we will have a full service offering for customers who can buy online, on the phone or from a local agent. That's our goal as far as building the company this year.
TWST: What are the key metrics or events that investors should focus on as they track or assess your performance?
Mr. Perillo: The first one is revenue. We are building our revenue by building the call center. Revenue is an important metric for investors to watch. Along with that, investors should be interested in our marketing expense, which is our customer acquisition cost. One of the issues we face is that we incur marketing costs three to four months before that spending generates revenue. There is a fairly long underwriting process that life insurance companies go through for each application, and we don't record revenue until that process has been completed. Often you'll see that if we increase our marketing spending, it has a negative impact on the current quarter's financial statements, since we have the expense but the revenue won't be recognized until the following quarter. So an increase in marketing expense may result in an increase in revenue in the subsequent quarter. Conversely, as we become more efficient with our marketing and in how our call center handles leads, we hope to be able to reduce marketing costs while increasing revenue. If we are able to do that, we can increase our margins and speed our path to profitability.
NSUR 1-yr chart