Global Risk Exchange A-B

Babson Professor Stephen Spinelli, Case Director

Alex Hardy, Case Writer

Arthur M. Blank Center for Entrepreneurship

© Babson College, 2000.

Abstract

Two alumni of Babson College’s MBA program start an on-line insurance information company, an idea initially developed at Babson’s Business Development Hatchery. They are convinced they can streamline the industry’s tradition-bound methods for issuing policies and certifications. The potential for profits appears to be substantial since the traditional insurance company is extremely inefficient, with expenses consuming 37% of premiums of which 12% is for the distribution of the paperwork. The young entrepreneurs struggle to find the appropriate business model. Options considered include becoming on-line insurance agents or licensing their technology to existing insurance companies, brokers and other financial intermediaries. Eventually the founders decide that the Global Risk Exchange Internet platform will provide large corporate insurance customers with on-line competitive quotes from top-tier insurance companies and tools to simplify the reporting of claims and the acquisition of insurance certificates.

Location of the company: Boston, Ma.

Years spanned by the case: 1999 to 2000

Industry segment: Insurance

Stage of the company: Start-up

Age of the entrepreneurs: 22 and 23

Key Words: Entrepreneur, entrepreneurship, start-up, insurance, Internet, on-line, risk management, business models

DVD

There is a 51minute DVD available for this case. One of the principals from the case, answers questions in a Babson class. Please place orders through ecch.

Teaching Notes

A 9 page case teaching package, written by Stephen Spinelli, is available for this case. The teaching package includes strategies for case presentation, key concepts, solutions to the assignment questions in the case, and suggestions for the most effective ways to work this case into a course.