CLEVELAND, Nov. 6 /PRNewswire/ -- QQLink.com, Inc., the insurance e- commerce subsidiary of Ceres Group, Inc. (Nasdaq: CERG), has announced the closing of its first round of financing through a $2.7 million private placement offering. The subsidiary also announced it has established its headquarters in Chicago. (Photo: http://www.newscom.com/cgi-bin/prnh/20000315/CRLOGO ) The 18 investors in the private placement now collectively own 6 percent of QQLink.com. Ceres Group, Inc. retains 94 percent ownership. Most of these investors are key marketing management personnel of the company. As "Founders," these marketing individuals, located across the nation, will also assist in business planning, charting the direction for QQLink and enrolling agents to participate in the new program. Proceeds from the offering will be used to fund continuing website development and the release of new products. "QQLink is the most exciting project I have ever undertaken," said Peter W. Nauert, Chairman of Ceres Group and QQLink.com. "The fact that these investors and nearly 100 Regional Servicing Agents have signed on is generating tremendous excitement in the program. And, the fact that these Founders, who are closely associated with Ceres, believe in the QQLink.com process enough to make a personal investment says a lot for the quality and potential of this program." QQLink.com is a new B2B-B2C Agent Exchange program, which combines the consumer service and support of a top-quality sales agent with the convenience, efficiency and cost savings of direct purchase of insurance and other financial service products over the Internet. Consumers may apply for and purchase insurance online either at a participating agent's website, or the QQLink.com master website. Consumers who go directly to the QQLink.com master site will have ready access to a selected or assigned agent to handle questions or provide service at no additional cost. During September and October, QQLink.com and Ceres sponsored a National Seminar Program to recruit agents in over 70 cities across the country. Over 3,000 agents attended these seminars, which included valuable information on QQLink.com and the product lines of the Ceres insurance subsidiaries that will be available on QQLink.com. Goal is to Enroll 2,500 Agents By Year-End With over 1,000 agents already signed up for the QQLink program, the company's goal is to enroll 2,500 participating agents by the end of 2000. The company previously announced that it has enrolled nearly 100 Regional Servicing Agents who are each expected to recruit from 100 to 250 agents to participate in QQLink.com. "By the end of 2002, our goal is to have 25,000 participating QQLink agents," according to Bruce Henry, Executive Vice President of QQLink.com and Chief Marketing Officer of Ceres. "With this level of distribution, we expect to be able to reach 50 million consumers through QQLink." Six Health Products Are Part of the Initial Roll-out QQLink.com is expected to be online for consumer use this month, with roll-out in 20-25 states in the first few months and 10-15 additional states in 2001. Initial products will feature three levels of major medical, a short-term major medical, individual dental and individual critical illness coverage. "The three major medical plans and short-term major medical, which are generally difficult-to-get products, offer an attractive range of benefits and costs which should fit the needs of most Internet customers," said Henry. "This first round of products should appeal to a wide cross-section of Americans and will be supplied by Ceres' subsidiary, Continental General Insurance Company. "Our next round of products, planned for the first quarter of 2001, will be specifically targeted for individuals aged 55 or older and will include Medicare supplement and long term care plans," Henry said. "We expect these products to be provided by both Ceres and non-Ceres insurance companies." The company is pursuing strategic alliances with insurance companies and providers of other goods and services, which could be offered at a discount through QQLink.com. "In the second quarter of 2001, we plan to add life insurance and annuity plans from unaffiliated companies," Henry added. "Negotiations are now in the final stages with a carrier for term life insurance, and we have already announced a marketing alliance with Great American Financial Resources, Inc. (NYSE: GFR), for an annuity series underwritten by its subsidiary, Loyal American Life Insurance Company. We are also targeting other medical and specialty products which would include worksite marketing plans and wealth accumulation products for future releases." Websites Designed for Consumer Convenience "In our website development, we focus on making QQLink.com an easy-to-use, informative site," Henry added. "Product benefits are described clearly, in easy-to-understand language. In addition to an overview of benefits and how the plan works, customers also can find as much detail as they want and need on each product. "Once they have selected a product, the QQLink.com website makes it easy to receive a cost estimate based on coverage desired," Henry said. "Then, it's a matter of going through a two-step application process. A few preliminary questions will determine if the prospect is likely to qualify for the coverage. If not, the prospect can easily exit or select another product. If it seems likely that coverage would be approved through underwriting, the consumer completes the full application online." After the application is submitted, a final determination on coverage approval is made and the approved policy is sent to the customer. QQLink to Offer Marketing Services for Participating Agents Each agent who enrolls in the QQLink.com program will receive: * a QQLink website * access to the quoting system for products available through the program * access to Internet certification and online product training and, in the future, continuing educational credits online * opportunity to access specialized lead and prospect generating programs Prospecting System is Exclusive to QQLink "We expect the lead and prospect generating programs to be of significant value to our participating agents," Nauert said. "QQLink will offer an exclusive targeted database management and sales prospecting system through a joint venture with Econometrics, Inc., a Chicago-based consumer and business research and database marketing firm. "Econometrics has analyzed the policyholder base of Ceres insurance companies for products similar to those being offered through QQLink," Nauert said. "Agents will be able to select product profiles for specific 5-digit zip code areas and receive online and in real time a set of most-likely-to-buy prospects. These prospects will be derived from a 180-million consumer database." Some of the initial tests of this exclusive prospecting system by the sales organizations of several of the QQLink.com Founders have yielded sales close rates of 15-20% or more. This prospecting system is part of QQLink.com's wide range of services provided to assist participating agents in achieving the best e-commerce results. In addition to the Econometrics system, QQLink.com is establishing alliances with a number of affinity groups to move consumers to the website. "We expect over the coming months to develop a significant affinity database through groups such as credit unions, community banks, local and regional auto clubs and Chambers of Commerce," said Henry. "We will be able to link these consumers to our QQLink.com websites, providing them with access to discount insurance and other products. This process will generate increased traffic which will benefit the efforts of our participating QQLink agents." The marketing support arm of QQLink.com, called QQBiz.com, also includes a number of separate programs which will be available to participating agents: * Telemarketing Leads. QQLink.com plans to develop qualified leads generated through telemarketing on a real time basis. * Turnkey Advertising Materials. Mailers, ad slicks and e-mail letter texts will be available to agents through the QQBiz program. Agents can then follow-up with traditional sales calls or via e-mail. * Internet Leads. These leads will be generated through affinity groups and strategic partners and will include Internet shoppers who have expressed interest in the types of products QQLink has to offer. Agents will be able to order these leads online and receive them through e- mail. Chicago Headquarters Established for QQLink.com To facilitate its growth and development, QQLink.com has established its headquarters in Chicago, at Madison Plaza. "We have set up this office to distinguish QQLink as a separate company, with a separate identity from Ceres," Nauert said. "Chicago has become a hotbed of Internet-related companies and developments. We believe this location will provide us greater access to additional personnel, technical support, creative talent and strategic alliances for the future." About Ceres Group Ceres Group provides a broad spectrum of health and life insurance, medical cost management services and specialty products to approximately 600,000 insureds. The Company actively distributes its products on a national basis through approximately 50,000 independent licensed sales agents and career agents and through various e-commerce platforms, including its own subsidiary, QQLink.com B2B-B2C Agent Exchange. Traditional and e-commerce products are marketed to individuals, small businesses and the senior market. Through the implementation of its sales and financial business plan and acquisition strategy, the Company focuses on increasing fee-based revenue and reducing medical costs and underwriting risks for its subsidiaries and the blocks of business it acquires. For more information, visit www.ceresgp.com. This news release contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Company and QQLink. Forward-looking statements are statements other than historical information or statements of current condition. In light of the risks and uncertainties inherent in all future projections, the inclusion of forward- looking statements herein should not be regarded as representation by the Company, QQLink or any other person that the objectives or plans of the Company or QQLink will be achieved. Many factors could cause actual results to differ materially from those contemplated by such forward-looking statements, including, among others, failure to successfully implement the business plans for QQLink, failure of businesses and consumers to adopt the Internet as a vehicle for purchasing insurance, rising healthcare costs, business conditions and competition in the healthcare industry and on the Internet for healthcare and other insurance products, developments in healthcare reform and other regulatory issues. The foregoing review of important factors should not be construed as exhaustive. Investors and others should refer to the Company's filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 1999, its quarterly reports on Form 10-Q and other periodic filings, for a description of the foregoing and other factors. The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
SOURCE Ceres Group, Inc.