As members of a cross-functional team investigating online commerce for The Canada Life Assurance Co., Gregory Ellis and George Small realized they could use this harsh reality to sell insurance.

With Canada Life as their majority shareholder, the two insurance industry veterans launched www.kanetix.com in December 1999 with an intriguing idea: to offer customers the chance to compare prices and features from many different insurance carriers - not just Canada Life - and then to offer them an immediate opportunity to buy either online or through a toll-free number.

"A lot of insurance companies think if you build a Web site, people are just dying to use it and serve themselves," reflects Mr. Ellis, "but it's not true. Consumers are looking for the opportunity to compare prices and features. Once they're done, they want to buy as quickly as possible."

As what he calls a "market aggregator", Kanetix brings together 26 different carriers in an online insurance marketplace. It offers auto insurance quotes in Ontario, Alberta and Atlantic Canada and term life and property insurance quotes nationally except in Quebec, although service for Quebeckers is imminent. By plugging in some basic information about themselves, shoppers can get quotes from six or more auto or property insurance carriers (depending on the province) and eight different life insurance companies.

While the service is free to consumers, insurance carriers and brokers pay fees based on the number of quotes Kanetix serves on their behalf, the number of quotes that customers save on the site, and by the number of calls that come to the toll-free Kanetix call centre, where customers are either linked directly to the company or scheduled for a call-back.

To build the site's traffic, Kanetix is working with Microsoft Canada, providing a branded insurance quoting service on its Web site, and with online news service Canoe, providing the back-end engine for a co-branded quoting service. While exact figures are not available, consumers have already used the Kanetix service on the way to purchasing insurance worth millions of dollars in premiums, says Mr. Ellis. While he is happy with the results, however, he says profitability is still "a couple of years away."

While the thought of a major insurer funding a site that gives its competitors equal and unbiased presence may at first seem incongruous, Mr. Ellis says the fact that insurance companies tend to specialize in certain kinds of insurance and particular types of risk has helped them coexist at Kanetix. "They realize they're going to win some [business] and they're going to lose some," says Mr. Ellis, "but that's what goes on the marketplace every day. It's really not an issue for them after the first discussion."