InsWeb Introduces Auto Insurance Index

SACRAMENTO, Calif., September 5, 2002 – InsWeb Corp., one of the largest producers of automobile insurance in the U.S., today introduced the InsWeb Auto Insurance Index. The InsWeb Auto Insurance Index is designed to identify and track general pricing trends of personal auto insurance sold through the Internet. The Index suggests that as of the second quarter of 2002, prices for auto insurance nationwide have risen approximately 40% since the first quarter of 2000, or, roughly 16% annually. The results are based on hundreds of thousands of consumers who complete InsWeb’s auto insurance quote form each quarter.

“We are delighted to introduce the InsWeb Auto Insurance Index, leveraging the vast number of consumer profiles and applications available in our database,” said Mark Guthrie, InsWeb’s President and Chief Executive Officer. “This index, which we believe to be the first of its kind, could be a useful early indicator of pricing activity in the personal auto insurance marketplace and therefore help both carriers and consumers react more quickly to changes.”

Important Trends

After nearly a decade of flat to modest price increases in the automobile insurance industry, prices have increased substantially over the past two years. During the time period analyzed, from the first quarter 2000 to the second quarter 2002, the index for 6-month policies rose 54% and the index for 12-month policies increased 21%. For example, a married couple with male aged 35 and female aged 37, driving a typical four-door sedan, with no violations and no accidents, would have paid $1,500 for a 12 month policy in 2000 and $1,800 for the same policy in 2002.

Reasons for the increases include rising claims costs driven primarily by medical costs, significantly higher vehicle repair costs, rising jury awards and continued fraud and abuse, as well as lower investment income generated by insurers, mainly due to the dramatic reduction in interest rates and the decline in the stock market.

One way in which insurers can adjust their prices to changing economic and market conditions is to switch from offering 12-month policies to 6-month policies, enabling them to file for rate increases more frequently. Over the past ten quarters, carriers participating in the InsWeb marketplace switched to 6-month policies in dramatic fashion. Nearly 60% of the roughly 1.2 million quotes viewed by consumers during the second quarter of 2002 were for 6-month policies, as compared to less than 38% during the first quarter of 2000.

“With prices expected to continue to rise in 2002, insurers working with InsWeb should be able to target specific consumers to reach their new business goals, as well as keep an eye on their existing customer base, especially those customers with favorable risk profiles that may be sensitive to price changes,” said Kiran Rasaretnam, InsWeb’s Senior Vice President of Finance and Chief Actuary.

InsWeb Auto Insurance Index

(A graphical representation is also available at http://www.insweb.com/about/auto-index.htm).

Calendar Quarter Quarterly Index

Q100 1.00

Q200 1.10

Q300 1.17

Q400 1.21

Q101 1.26

Q201 1.27

Q301 1.32

Q401 1.39

Q102 1.38

Q202 1.40

Composition of the Index

The nature and size of InsWeb’s online marketplace enables the company to collect a wealth of demographic and product-related characteristics that it believes may be beneficial as broad indicators of pricing and other trends for the auto insurance industry. The index is calculated from quotes viewed at InsWeb by consumers in all states (except those in New Jersey and Massachusetts) for both 6-month policies and 12-month policies; it is a weighted average of the separate indices for 6-month and 12-month policies, respectively. In each of the ten quarters analyzed to-date, the index is based on at least 0.5 million quotes, with an average of 1.3 million quotes analyzed in the first and second quarters of 2002. While the index itself will be calculated on a quarterly basis, the intention is to track and monitor pricing on an annual basis, with quarterly data providing potential early insight into pricing trends, subject to short-term geographic and demographic changes by both carriers and consumers at InsWeb. The information will also be posted on InsWeb’s site at http://www.insweb.com/about/auto-index.htm.

About InsWeb

InsWeb (Nasdaq: INSW) enables consumers to compare multiple, actionable quotes for auto, term life, health, homeowners, renters and condominium insurance offerings from many of the nation’s highly rated insurers. The top-rated online insurance marketplace also provides live customer service, interactive tools and independent research. Headquartered in Sacramento, Calif., InsWeb is accessible at www.insweb.com and through such prominent partners as Yahoo!, Quicken.com, and Lycos.

Disclaimer

While the InsWeb Auto Insurance Index is a broad indicator of pricing activity in the personal auto insurance marketplace, it is not a comprehensive index as it reflects only the pricing activity of carriers that have participated in the InsWeb auto insurance marketplace and the aggregate profile of consumers who shop at InsWeb. From time to time, and often on a quarterly basis, these influencing factors can change quite significantly, and therefore affect the composition of the index. As such, the index may fluctuate widely from quarter to quarter, and it is not InsWeb’s intention to measure and analyze quarter over quarter changes in an in-depth fashion. In addition, prices for auto insurance vary from state to state, as well as within a state, and are heavily dependent on an individual’s risk characteristics and the particular coverage that individual desires. It is impractical, if not impossible to identify all major components of the index and adjust for the changes in those components on a quarterly basis. In addition, the index itself is a function of which quarter is used for the base. As an example, if the index were to be constructed using Q300 as the base instead of Q100, the average annual increase would have been about 11%