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July 20, 2003 at 08:00 PM
When it opened for business in 2001, Wilmington, Del.-based Fusura was heralded by its founding company partners as a new Web-based insurance agency that eventually would allow customers to obtain a vast array of coverages and financial services. Its not going to happen.
The online independent agency is closing shop in late October and is no longer writing policies with its three carrier partners–American International Group Inc., Kemper Insurance Companies and Prudential Insurance Company of America.
The reason is simple, explains Fusuras President, Chairman and CEO Mark A. Parsells in a telephone interview. Kemper and Prudential changed their business strategy, selling off their personal lines property-casualty businesses and pulling their financial support of the agency.
That left AIG as the only company partner, which Parsells explains, could not fund the agency on its own because it would have gone against the “fundamentals of an independent agency, to be impartial.” He adds that AIG “did all it could to find a way for us to remain as an independent agency.”
Attempts were made to find new funding, but they failed. There was “strong interest” among outside investors, he says, but “given the tight financial market out there, we could not find an investment on mutually acceptable terms.” The only recourse was to close shop, meaning that 98 people will lose their jobs by Oct. 31 when the agency closes its doors.
“This is unfortunate,” observes Parsells. “It is one of those situations where we had a very good business being built; we were ahead of our projections. But we had a fairly straightforward situation that was difficult to overcome.
“The circumstances were not in our favor and were out of our control,” he says.
The technology developed by Fusura will be turned over to its investors, he explains.
“We have a state of the art rating engine, a very strong, quality book of business,” he says. “Everything was on track, but we were building the business with a certain amount of funding that we were counting on [from the investors]. But it was being tranched in over a three-year period, and a significant amount of that money they were not able to put in.”
