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EXHIBIT 99.1
INSWEB CORPORATION
FOR IMMEDIATE RELEASE
MEDIA RELATIONS CONTACT:
Greg Jones
InsWeb Corporation
650-817-0213
[email protected]
INVESTOR RELATIONS CONTACT:
Alex Wellins or Jennifer Jarman
the blueshirt group
415-217-7722
[email protected]
InsWeb Announces Restructuring
The Company Plans to Significantly Expand Its Insurance Agency Operations and
Further Reduce Operating Costs
REDWOOD CITY, Calif., June 4, 2000 - InsWeb Corp. (Nasdaq: INSW), one of the
nation's foremost providers of online-insurance services for consumers and
insurers, announced today that it plans to expand its online insurance agency
operations and implement several cost-cutting measures in the coming months. The
company's latest actions are designed to increase recurring revenues, boost
operating efficiencies, achieve greater control and predictability of the
business, and enhance the consumer experience.
The company also announced that Mark Guthrie, 39, has been promoted to
president of InsWeb, in addition to his role as chief operating officer. Working
closely with Hussein Enan, InsWeb's chairman and chief executive officer,
Guthrie will help guide the company's new initiatives, including plans to
consolidate its corporate headquarters and agency operations and relocate them
to the Sacramento area later this year.
The company also said it expects to reduce its staff by approximately
40 percent during the next two quarters. Most staff reductions will result from
discontinuing initiatives not considered core to the company's business model
and from synergies resulting from consolidating the company's main operations.
Said Enan, "These measures, combined with other cost-reduction efforts
and our more than $75 million in cash and short-term investments as of March 31,
make us confident that we will have more than enough cash to allow us to operate
comfortably through 2002, at which point we expect to begin generating profits."
Enan elaborated on the expansion of the company's agency operations:
"Over the past five-and-a-half years, we have accumulated many valuable assets,
including a long list of lead-referral carriers, an extensive online-marketing
network, leading edge technology, intimate knowledge of online consumers and a
seasoned management team. These assets remain very important to our business and
we plan to continue to build on them. As strong as our model is, it is weakened
by an over-dependence on lead-referral revenues. Realizing this, we implemented
a corrective measure last October with the rollout of our insurance agency
capabilities, which we plan to significantly expand nationwide over the next 12
to 18 months. This will help us balance our sources of revenue, give us more
control over our business and generate recurring revenues from policyholders. It
will also enhance user satisfaction by increasing the number of carriers from
which consumers can choose. Our agency already represents nine carriers in four
western states."
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Moreover, InsWeb has been actively working on new technology to
maximize the efficiency of its agency operations. Last quarter, the company
unveiled fully automated online technology that enables the purchase of
automobile insurance without the need to speak to an agency representative, and
places proof of insurance in the hands of consumers in minutes. The company
plans to aggressively push adoption of this new technology by its carriers.
InsWeb also confirmed today that it expects revenues for the second
quarter to be approximately $5 million. Due to anticipated near-term effects of
the restructuring, the company also said it estimates that quarterly revenues
for the balance of fiscal 2000 will be significantly lower than originally
projected. In addition, the company said it would take one-time charges in the
second quarter. The charges are related to the planned restructuring and the
discontinuation of Benelytics Inc., following InsWeb's previously announced
strategic partnership with eHealthInsurance.com.
InsWeb will host a conference call to discuss this announcement on
Mon., June 5 at 11 a.m. (PDT). Open to the public, the conference call will be
accessible by dialing 800-633-8467. Following its conclusion, a replay of the
call will be available for two days by dialing 800-633-8284 and entering pass
code 15432059.
About InsWeb
InsWeb (www.insweb.com) enables online consumers to compare free,
multiple quotes sponsored by more than 50 of the nation's leading insurers for
auto, term life, homeowners and health insurance. InsWeb provides live customer
service, interactive tools and research capabilities, and is accessible from
more than 180 leading sites, including Yahoo!, MSN, Snap.com, LookSmart, E*TRADE
and Netscape Netcenter. InsWeb's brand and technical platform support InsWeb
Japan K.K., a joint venture co-founded with SOFTBANK Finance Corp. and Marsh
McLennan Companies. InsWeb is headquartered in Redwood City, Calif.
# # #
This news release contains forward-looking statements, including statements
which report the company's current views with respect to its growth strategy and
future financial performance. These statements are based on current information
which we have assessed, but which by its nature is dynamic and subject to abrupt
changes. The company's actual results might differ materially from those stated
or implied by such forward-looking statements due to risks and uncertainties
associated with the company's business; which include, but are not limited to,
the company's ability to successfully implement its strategy of expanding its
agency operations, the company's ability to maintain and expand its
relationships with its participating insurance carriers and its online partners,
and consumer acceptance of and the company's further implementation of new
product offerings. The forward-looking statements should be considered in the
context of these and other risk factors disclosed in the company's most recent
filings with the Securities and Exchange Commission.
"INSWEB" is a registered service mark of InsWeb Corporation. All marks above are
those of InsWeb Corporation, except for those of insurance carriers, brokers,
agents, industry organizations, financial institutions, online partners, service
providers, other mentioned companies and educational institutions, which are the
marks of their respective entities.
