Newtek Targets Small Business Coverage

By Susanne Sclafane

NU Online News Service, Feb. 24, 11:35 a.m. EST?The head of Newtek Business Services said his financial services firm is starting up an insurance agency to market products over the Web to small business clients.[@@]

Barry Sloane, chief executive officer of New York-based Newtek Business Services, said his firm is jumping into the sector because the target market is an underserved one. Newtek is positioned to serve "as a provider of a full menu of products and services to small- and medium-sized business," Mr. Sloane said.

He told National Underwriter that setting up Newtek Insurance Agency to offer insurance was a natural extension of its current offerings in the areas of small business lending, electronic payment processing, outsourced bookkeeping services and tax preparation services.

The small- and medium-sized customers that Newtek serves are those that generate $25 million or less in sales and have less than 500 employees, Mr. Sloane said. "We believe these customers are underserved by most major providers" of insurance, he said.

Noting that the other products and services which Newtek offers are distributed through Web-based distribution channels, Mr. Sloane said his company will work with "a wide variety of major [insurance] companies" to deliver insurance in the same way, declining to specifically name the insurers.

Newtek Insurance Agency will offer a businessowners protection policy on the property-casualty side, as well as key man life insurance.

Newtek Insurance Agency will reside in the District of Columbia and currently is licensed in 31 states, with the intention to be licensed in all 50 states. The company will serve as a retail agency and anticipates beginning to write business in the second or third quarter of 2004.

Newtek Insurance Agency will be led by Ellen Abromson, a Washington, D.C.-based attorney who was a former staff attorney for Acacia Group.

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Newtek Targets Small Business Coverage

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