Name-your-price e-tailer Priceline.com (Nasdaq: PCLN) and insurer W.R. Berkley Corporation (Nasdaq: BKLY) announced Wednesday a joint venture that will offer name-your-price automobile insurance through Priceline’s Web site.
The new entity, Priceline.com Auto Insurance, represents Priceline.com’s latest foray into financial services, and targets the $110 billion (US$) auto insurance market in the United States. Priceline.com Auto Insurance will pay Priceline.com an annual licensing fee based on revenues generated by the new venture.
Base of Insurers To Participate
W.R. Berkley brings its experience in the industry to the venture, which is slated to debut next year. The firm will use its contacts and expertise to recruit a supplier base of automobile insurance companies and supervise the underwriting of the insurance. Berkley reportedly expects to recruit between 10 and 15 insurers to participate in the service.
“We know insurance and Priceline.com knows e-commerce,” said William R. Berkley, chairman and president of W.R. Berkley.
Berkley added that by merging the abilities of the two companies, they will be positioned “to help consumers save money on their auto insurance bills and help participating insurers to cost-effectively attract new customers.”
Priceline.com, which boasts about 10 million users, pioneered the concept of having online consumers choose from among competing companies for the lowest price on services and items. Priceline customers are currently able to access such goods and services as long-distance telephone rates, home mortgages, groceries, hotel rooms, airline tickets, quality used goods, the purchase, rental or lease of automobiles, and gasoline.
Life Insurance Next Up
Ben Ness, senior vice president of financial services for Priceline.com, stated that the expansion into the auto insurance market represents one of several sectors Priceline intends to enter in the near future. “We plan to offer term-life insurance later this year,” he said.
Priceline.com Auto Insurance will compete with a growing number of auto insurers who have announced plans to bring their business online, including Allstate Corp., Progressive Corp., and State Farm Mutual Automobile Insurance Co.
Priceline.com shares were unchanged at 24 15/16 in Wednesday morning trading, while W.R. Berkley shares rose 1/16 to 25 3/4.
The Greenwich, Connecticut-based W.R. Berkley Corporation is a holding company which, through its subsidiaries, operates in all segments of the property casualty insurance business. Priceline.com, based in Norwalk, Connecticut, recently announced its fourth international venture, an alliance with Japanese Internet Investor Softbank Corp.