NetBank Enters Insurance

By Mark E. Ruquet

NU Online News Service, June 11, 9:26 a.m. EST?NetBank, the Atlanta-based Internet bank, is entering the insurancemarket after purchasing select assets of NetInsurance, a Web-basedagency.

NetInsurance, formerly a Web-based agency dealing in autoinsurance over the Web, will begin offering homeowners insurance toNetBank customers securing mortgages through Meritage Mortgage inCalifornia.

E. Robeson MacKethan, the former president of NetInsurance, willserve as the president of the bank's insurance operations.

Mr. MacKethan said the agency was one of the first to presentreal-time quotes and services over the Internet to auto insurancecustomers. The system will now be expanded to homeowners insurance.Marketing will be done through the mortgage approval process, hesaid.

"We are looking to optimize the insurance origination process,"said Mr. MacKethan. This will be accomplished by presentingcustomers with a customized homeowners insurance proposal afterthey secure a mortgage.

For a homeowner who has just moved in from out-of-town, thisapproach can afford the out-of-state customer the convenience ofsecuring all the banking and insurance needs in one place, Mr.MacKethan noted.

The arrangement also breathes new life into NetInsurance, whichlike many other dot-com companies, especially insurance, sufferedfrom a lack of interest from the buying public. At the time NetBankpurchased NetInsurance assets, the company was in Chapter 7liquidation.

"There are so few success stories," said Mr. MacKethan,explaining that there was nothing wrong with the business model,but that the agency suffered the fate of many others in a similarsituation.

However, he said this venture is "exciting" for theagency--putting NetInsurance in a strategic position it lackedbefore. The purchase also helps NetBank enter into the insurancemarket efficiently without having to build a base.

"The combination of the two makes so much sense I can't imaginedoing it any other way," observed Mr. MacKethan.

NetBank has banking and mortgage services throughout the countryand plans to have insurance licenses in all 50 states by the end ofthe year. The bank said it has approximately $4 billion inassets.