$460M AUTO INSURANCE OPPORTUNITY: MASSACHUSETTS OPENS UP ITS DOORS

Massachusetts is one of the last states to loosen its control of auto insurance rates and potentially the criteria insurers may use to set those rates. Until now, those two factors have deterred several of the nation’s major carriers like GEICO and Progressive, from insuring in Massachusetts. But with a new “managed competition” system set to begin April 1st (i.e., competitors set their own rates, subject to state approval), consumers and insurers alike are trying to figure out how this will reshape the competitive landscape.

Auto insurance online is a big business
Even though GEICO and Progressive are giants in the auto insurance world, neither currently offers private passenger coverage in Massachusetts, and neither has officially filed to enter the Bay State. But that may only be a matter of time. Check out the overall growth in online visitors to these top two online sellers from the past few years, which rank 3rd and 4th nationally in term of share of total auto insurance premiums written… Read more about Compete’s take on the online auto insurance opportunity in Massachusetts.

HIGH RATES STILL DRAW CONSUMER DEPOSITS INTO E*TRADE DESPITE BANKRUPTCY RUMORS
By: Hoai Doan

In November 2007, Prashant Bhatia, a Citi Investment Research Analyst, wrote that E*Trade had a 15% chance of bankruptcy due to the effects of the decline of the subprime market. E*Trade shareholders clearly took this statement to heart as the company’s share price declined 59% in one day. Just as interesting, however, is the question of whethe E*Trade’s onlne depositors shared those fears?

While not as well known as its brokerage business, E*Trade also has a significant deposits business with nearly $30 billion in consumer deposits. At Compete, we utilized our panel of two million users to investigate what impact, if any, this analyst report had on the behavior of E*Trade’s online high yield savings (HYSA) shoppers. If E*Trade’s online consumers reacted similar to its shareholders, we would expect to see a comparable drop in new submitted online account applications after the report was released.

Approximately one month before the Citi analyst report was released, E*Trade reduced its rate on high yield savings from 5.05% to 4.70% APY… Read more about whether E*Trade’s strategy to retain its customers was successful…

MONTHLY METRICS: NOVEMBER VS. OCTOBER 2007
	In non-branded insurance terms searches for “insurance” and “auto insurance” dropped sharply, while “car insurance” stayed flat. Meanwhile non-branded brokerage terms reversed their directions, along with “home equity loan” and “mortgage rates.” A continuing downward trend in home loan prospect and applicant numbers was joined by the same trend in auto insurance.