Fall 1999

Steven Aldrich
Founder, Intuit Insurance Service
President, Quicken Insurance

s aldrich  

Steven Aldrich is president of Quicken Insurance, a wholly owned division of Intuit Inc. The company is an insurance marketplace on the Internet for both consumers and carriers and is part of the Quicken.com Financial Web site (www.quicken.com). Quicken Insurance has been providing educational information, decision tools, and transaction capability to over a million and a half visitors since its launch in the summer of 1996.

Steven has extensive experience in the financial services and technology sector. One of Institutional Investor's most influential people in financial services on the Internet, he has worked in the investment banking division of Alex. Brown & Sons and McKinsey & Company. In June 1995, one month after graduation from business school, he founded Interactive Insurance Services (IIS), a personal insurance Web site. Four months later Intuit purchased IIS from Steven for $10 million, and he was offered the position of president of the insurance division, a post he currently holds.

Quicken Insurance and its designated employees are licensed as insurance agents for life and health in 50 states and Washington, D.C., and as agents for property and casualty in 49 states and Washington, D.C. Quicken Insurance also associates with licensed resident agents in those states where insurance transactions must be conducted with or through resident agents.

Steven, a Phi Beta Kappa graduate, earned his B.A. in physics from the University of North Carolina and his M.B.A. from the Stanford Graduate School of Business.

Steven Philip Aldrich: Shaping the New Insurance Marketplace

Steven P. Aldrich was in the process of earning his M.B.A. from Stanford University when he had an idea: use the Internet to bring buyers of insurance together with a wide range of insurance carriers in an environment that will facilitate real-time quotes and allow buyers to purchase insurance online. Although he knew this would require fundamental changes in traditional methods of buying and selling insurance, Aldrich was confident. Just one month after graduating, he founded Interactive Insurance Services (IIS) with two of his colleagues. He was well on his way to revolutionizing the insurance marketplace.

"When we started the company, we saw ourselves as being at the center of two intersecting industries: the insurance industry and the Internet industry," Aldrich explained to an audience of students, faculty, and guests as an Entrepreneur in Residence for the Lubin School on December 1, 1999. "However, the same strategic barriers that had kept the top insurance carriers from building a web presence would serve to challenge us as well."

[Steven P. Aldrich]
During a day of lectures to undergraduate students on the Pleasantville campus and to graduate students in White Plains, Aldrich outlined how he started his entrepreneurial venture. He described the enormous obstacles his company had to overcome within these two industries if they were to realize their goal of bringing the two together on the World Wide Web. On the insurance industry side, it was widely believed that insurance was "sold and not bought," and that the Internet would introduce "disintermediation," thus cutting out the insurance agents that companies counted on for a large portion of their business. Consumers, who viewed agents as their "face" to insurance companies, tended to avoid the insurance purchasing process, shopping for insurance only as circumstances warranted, he explained.

The Internet industry, on the other hand, posed a diff e rent set of challenges. "On the Intern e t , scale matters, and the first to market usually wins," Aldrich pointed out, emphasizing the value of a familiar brand name to consumers on the Web. "When you've got 10,000 sites to choose f rom, where do you go? To the name you know." He said that consumers on the Web tend to s h a re some specific pre f e re n c e s that needed to be addressed if his company was to successfully attract and hold customers. According to Aldrich, Internet consumers want control, ease of use, s e rvice, privacy, and security, in addition to familiar brand names.

The Four C's of E-Commerce
The first order of business for Aldrich's company, IIS, upon its formation in June 1995 was to define its corporate vision, he explained. "We didn't go out and hire people on day one, we didn't build the product on day one, and we didn't go out and buy web servers or even office space on day one. What we did on day one was create the vision and the operating values for the company," Aldrich recalled. "The first thing we wanted to do was to 'wow' customers by creating a product set that really made a difference. The second thing we wanted to do was to create the 'best' Internet marketplace for both the leading insurance carr iers and consumers." Aldrich defined "best" as the most-used and the easiest to use, underscoring the importance of defining the elements of IIS's vision within the context of its product .

The student potential entrepreneurs in attendance paid close attention as Aldrich described how he and his colleagues, to achieve their goals, developed a framework they referred to as the Four C's of Electronic Commerce: choice, convenience, cost, and confidence. Aldrich said he believed that success lay in the delivery of broad choice, purchasing convenience, low cost, and the confidence that consumers are purchasing products best suited to their needs. "We knew that delivering on the four C's would not only ensure that customers were getting exactly what they wanted, but would serve to increase efficiency in the insurance industry overall." Moreover, delivering on the four C's would allow Aldrich and his colleagues to ensure increased volume and lower costs for their other customers, the insurance companies.

Just four months after founding IIS, Intuit purchased the company for $10 million. "The operating principles set a company's culture, and Intuit's operating principles lined up well with ours, so we didn't wind up having to reconstruct the culture down the road," he remarked. Recognizing Aldrich 's keen entrepreneurial abilities, Intuit offered him the position of president of their insurance division, Quicken Insurance, a post he currently holds.

"Teams Work"
To d a y, businesses often find themselves struggling to resolve the inevitable conflict that occurs when emphasis is placed on both teamwork and individual ability. " You want superstars, but you want those superstars to work together with one another," Aldrich explained, citing his company's " Teams Work" operating principle such issues. Building teams of people with complementary skill sets is one way the "Te a m s Work" principle is implemented on a daily basis. "I truly believe consumer products on the Internet need to be built by a multid imensional team. It's got to have marketing, user interface design, b u i l d - a b i l i t y, a strong business case behind it, and engineers in the design phase early on." Aldrich underscored the importance of such a principle by pointing out the disparate skill sets (management, marketing, and engineering) he and his colleagues brought to IIS.

With sufficient venture capital in place and a customer base comprised of more than 10 million Quicken customers, it took Aldrich only two months to secure seven world class insurance carriers to sell their products through the Quicken Insurance Internet marketplace. Thus, with the launch of Quicken.com's insurance division, consumers can now compare and purchase a variety of insurance products online quickly and easily.

The launch of Quicken Insurance represented the realization of an idea born in the mind of an entrepreneurial M.B.A. student just two years earlier. It also signified a crucial turning point in the evolution of Intuit. "Now that we were a part of Intuit, we wanted to really integrate with the product strategy across the company and start thinking about branding. We needed to transform Intuit from a desktop software company to an Internet company," Aldrich pointed out. Such forward thinking has resulted in an infrastructure that currently supports between 500,000 and 750,000 visits per month, compared to 20,000 visits per month when Quicken.com was initially launched. As Intuit continues to evolve, Aldrich, true to his entrepreneurial spirit, said he hopes to broaden its scope within the financial industry while continuing to occupy a position at the intersection between the Internet and insurance industries.