Under the agreements, InsWeb will acquire selected assets of Intuit's QuickenInsuranceSM business. In exchange, Intuit will receive a 16.6 percent post-closing equity stake in InsWeb. Based on the closing price of InsWeb's stock on Nov. 24, 2000, and the number of shares expected to be received, the equity value of the transaction is expected to be approximately $14 million. In addition, under a separate five-year agreement, InsWeb will become the exclusive consumer insurance aggregator for Intuit's Quicken.com® and QuickenInsurance.comWeb sites and certain consumer desktop products. In exchange, Intuit will share in associated revenues, which are subject to certain minimums. Also, Intuit has agreed to work to transition its relationships with its online distribution sources to InsWeb.

"The sale of our consumer online insurance business is consistent with our strategy to focus our resources on businesses where we have a sustainable competitive advantage or are on a path to achieve one," said Steve Bennett, Intuit's president and chief executive officer. "We think these agreements are a win for Intuit, for InsWeb and for consumers. We believe that by acquiring Intuit's consumer insurance business, InsWeb will gain additional brand recognition and leverage needed to succeed in the online insurance space - and we think Intuit's customers will win with InsWeb's solutions."

InsWeb was founded in 1995 and is today one of the top online insurance marketplaces in the United States. InsWeb has combined its extensive knowledge of the insurance industry, technological expertise and close relationships with more than 40 insurance companies to develop a sophisticated, integrated online technology platform that delivers significant benefits to both consumers and insurance companies. Customers can select from a range of carriers on InsWeb's site, including many of those that participated on QuickenInsurance. However, there is some variation between the carriers that had agreements with QuickenInsurance and those that have agreements with InsWeb.

Under the agreements, all consumer insurance aggregator services and support promoted on Intuit's Quicken.com and QuickenInsurance.com consumer channels will be provided through InsWeb, and Intuit agrees to refrain from performing such services on behalf of individuals in the U.S. for a period of five years. Consistent with Intuit's privacy policy, no personally identifiable customer information will be transferred to InsWeb under the agreements without a customer's permission. Intuit plans to cease the online operations of its QuickenInsurance business, which are operated by its Intuit Insurance Services, Inc. subsidiary in Alexandria, VA. Approximately 75 Intuit employees will be impacted by this closing, some of whom may be offered positions at InsWeb or in other Intuit businesses.

Intuit first entered the insurance business through Intuit Insurance Services, Inc. (formerly named Interactive Insurance Services Corp.), which it acquired in 1996 in a stock transaction valued at approximately $9 million.

The agreements, which have been approved by the boards of both companies, are subject to regulatory clearances and customary closing conditions. The companies expect the transaction to close in the first calendar quarter of 2001.

Intuit expects no material impact from this transaction on its fiscal year 2001 revenue growth target of 22 percent. Based on a closing date in the first calendar quarter of 2001, Intuit expects this transaction will generate an improvement in pro forma operating income between $3 million and $5 million, distributed approximately evenly between Intuit's third and fourth fiscal quarter results. Intuit expects costs associated with the transaction to be approximately $10 million. These one-time costs will not be reflected in Intuit's pro forma operating results.

Upon the closing of the agreements, it is expected that Steve Bennett, Intuit's president and chief executive officer, will be elected to the InsWeb Board of Directors. However, in connection with its receipt of the 16.6 percent post-closing equity stake in InsWeb, Intuit will agree to certain conditions, including restrictions on resale of such shares for a period of at least 18 months and on the ability of Intuit to vote its InsWeb shares and to acquire additional shares.