<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                   -----------

                                    FORM 10-Q

         /X/      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000

                                       OR

         / /      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934

         FOR THE TRANSITION PERIOD FROM             TO
                                        -----------    -----------------

                         COMMISSION FILE NUMBER 0-26083
                                   -----------
                               INSWEB CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

             Delaware                                     94-3220749
  (STATE OR OTHER JURISDICTION OF                       (IRS EMPLOYER
   INCORPORATION OR ORGANIZATION)                   IDENTIFICATION NUMBER)


                               901 MARSHALL STREET
                         REDWOOD CITY, CALIFORNIA 94063
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                                   -----------

                                 (650) 298-9100
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)


-------------------------------------------------------------------------------

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No [ ]

The number of outstanding shares of the Registrant's Common Stock, par value
$0.001 per share, on April 30, 2000 was 35,145,710 shares.

<PAGE>

                                    FORM 10-Q
                               INSWEB CORPORATION
                                      INDEX

<TABLE>
<CAPTION>

                                                                                                                        PAGE
                                                                                                                       NUMBER
                                                                                                                       ------
<S>                                                                                                                    <C>
PART I        FINANCIAL INFORMATION
ITEM 1:       Financial Statements
              Condensed Consolidated Balance Sheets as of March 31, 2000
              (unaudited) and December 31, 1999                                                                             3
              Condensed Consolidated Statements of Operations for the three months ended
                     March 31, 2000 and 1999 (unaudited)                                                                    4
              Condensed Consolidated Statements of Cash Flows for the three months ended
                     March 31, 2000 and 1999 (unaudited)                                                                    5
              Notes to Condensed Consolidated Financial Statements                                                          6
ITEM 2:       Management's Discussion and Analysis of Financial Condition and Results of Operations                        10
ITEM 3:       Quantitative and Qualitative Disclosures About Market Risk                                                   26

PART II       OTHER INFORMATION
ITEM 6:       Exhibits and Reports on Form 8-K                                                                             27
              Signature                                                                                                    28
              Exhibits                                                                                                     29
</TABLE>


                                        2
<PAGE>

PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

                       INSWEB CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                              MARCH 31, 2000          DECEMBER 31,
                                                                               (UNAUDITED)                1999
<S>                                                                          <C>                    <C>
ASSETS
Current assets:
Cash and cash equivalents                                                         $45,569,153            $25,688,760
Short-term investments                                                             30,687,659             64,063,070
                                                                             -----------------       ----------------
         Total cash, cash equivalents and short-term investments                   76,256,812             89,751,830
Accounts receivable, net of allowance of $117,776 and $141,780 at
         March 31, 2000 and December 31, 1999, respectively                         4,696,877              4,267,691
Prepaid expenses and other current assets                                           6,708,975              2,974,024
                                                                             -----------------       ----------------
         Total current assets                                                      87,662,664             96,993,545
Property and equipment, net                                                         8,980,621              7,356,863
Investment in joint venture                                                         1,481,823              1,449,597
Intangible assets, net                                                              4,785,832              5,568,094
Long Term Investments                                                               4,981,799              4,978,761
Deposits and other assets                                                           1,959,180              1,934,045
                                                                             -----------------       ----------------
         Total assets                                                            $109,851,919           $118,280,905
                                                                             =================       ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                                                                   $1,544,955               $288,974
Accrued expenses                                                                    5,517,763              4,891,332
Deferred revenue                                                                      308,188                182,618
                                                                             -----------------       ----------------
         Total current liabilities                                                  7,370,906              5,362,924
Note payable to strategic partner                                                   1,460,138              1,464,558
Deferred rent                                                                         352,785                268,601
                                                                             -----------------       ----------------
         Total liabilities                                                          9,183,829              7,096,083
                                                                             -----------------       ----------------
Stockholders' equity:
Convertible preferred stock, $0.001 par value.
Authorized: 5,000,000 shares, No shares issued or outstanding                               -                      -
Common stock, $0.001 par value. Authorized: 150,000,000
         Issued and outstanding: 35,121,298 shares in 2000,                            35,121                 34,743
         and 34,742,760, shares in 1999
Paid-in capital                                                                   189,977,584            188,222,780
Accumulated other comprehensive income                                                143,271                112,843
Common stock warrants                                                                 113,071                113,071
Deferred stock compensation                                                       (2,113,696)            (2,887,995)
Accumulated deficit                                                              (87,487,261)           (74,410,620)
                                                                             -----------------       ----------------
         Total stockholders' equity                                               100,668,090            111,184,822
                                                                             -----------------       ----------------
Total liabilities and stockholders' equity                                       $109,851,919           $118,280,905
                                                                             =================       ================
</TABLE>

         The accompanying notes are an integral part of these
             condensed consolidated financial statements.

                                        3
<PAGE>

                       INSWEB CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>

                                                              FOR THE THREE MONTHS
                                                                ENDED MARCH 31,
                                                                ---------------
                                                                  (UNAUDITED)

                                                           2000                1999
                                                           ----                ----
<S>                                                  <C>                  <C>
Revenues:
   Transaction fees                                         $7,089,509           $2,868,098
   Development and maintenance fees                          1,518,484              443,373
   Other revenues                                                9,329                    -
                                                     ---------------------------------------
       Total revenues                                        8,617,322            3,311,471

Operating expenses:
   Product development                                       2,780,050            1,551,115
   Sales and marketing                                      14,303,315            3,849,213
   General and administrative                                4,809,099            2,391,979
   Amortization of intangible assets                           782,262              782,262
   Amortization of stock-based compensation                    347,163              290,000
                                                     ---------------------------------------
       Total operating expenses                             23,021,889            8,864,569
                                                     ---------------------------------------

         Loss from operations                             (14,404,567)          (5,553,098)
Other income                                                    50,510                    -
Interest income (expense), net                               1,277,416            (468,151)
                                                     ---------------------------------------

         Net loss                                        $(13,076,641)         $(6,021,249)
                                                     =======================================


Net loss per share-basic and diluted                           $(0.37)              $(0.38)
                                                     =======================================

Weighted average shares used in computing net loss
per share-basic and diluted                                 34,912,129           15,976,336
                                                     =======================================

Pro forma net loss per share-basic and diluted                 $(0.37)              $(0.24)
                                                     =======================================

Weighted average shares used in computing pro forma
net loss per share-basic and diluted                        34,912,129           25,456,204
                                                     =======================================
</TABLE>



         The accompanying notes are an integral part of these
              condensed consolidated financial statements.


                                       4

<PAGE>

                       INSWEB CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>

                                                                                         FOR THE THREE MONTHS ENDED MARCH 31,
                                                                                              2000                  1999
                                                                                              ----                  ----
                                                                                                      (UNAUDITED)
<S>                                                                                           <C>                    <C>
Cash flows from operating activities:
         Net loss                                                                             $(13,076,641)          $(6,021,249)
         Adjustments to reconcile net loss to net cash used in operating activities:
         Depreciation and amortization                                                              691,031               323,455
         Amortization of stock-based compensation                                                   347,163               290,000
         Gain on sale of equipment                                                                 (10,151)                     -
         Foreign currency translation gain on note payable                                          (4,420)                     -
         Amortization of intangible assets                                                          782,262               782,262
         Equity loss (gain) from joint venture                                                     (35,997)                 4,280
         Changes in assets and liabilities:
               Accounts receivable                                                                (429,186)           (1,375,529)
               Prepaid expenses and other current assets                                        (3,734,951)               261,790
               Deposits and other assets                                                           (25,135)                 2,875
               Accounts payable                                                                   1,255,981             (347,443)
               Accrued expenses                                                                     626,431              (34,747)
               Deferred rent                                                                         84,184                     -
               Deferred revenue                                                                     125,570                68,767
                                                                                      --------------------------------------------
                  Net cash used in operating activities                                        (13,403,859)           (6,045,539)
                                                                                      --------------------------------------------

Cash flows from investing activities:
         Sales of short term investments - net                                                   33,409,611                     -
         Purchases of property and equipment                                                    (2,315,789)             (756,764)
         Other, net                                                                                   8,112                     -
                                                                                      --------------------------------------------
                  Net cash provided by (used in) investing activities                            31,101,934             (756,764)
                                                                                      --------------------------------------------

Cash flows from financing activities:
         Proceeds from issuance preferred stock - net                                                     -            28,195,089
         Proceeds from issuance of common stock                                                           -               296,930
         Proceeds from exercise of stock options                                                  1,280,771                70,572
         Proceeds from stock issued from Employee Stock Purchase Plan                               901,547                     -
         Payment to Series B stockholder                                                                  -           (1,125,000)
         Payment of note payable to officer                                                               -              (25,000)
         Payments on line of credit from affiliate                                                        -          (19,290,000)
                                                                                      --------------------------------------------
                  Net cash provided by financing activities                                       2,182,318             8,122,591
                                                                                      --------------------------------------------


Net increase in cash and cash equivalents                                                        19,880,393             1,320,288
Cash and cash equivalents, beginning of period                                                   25,688,760             8,337,133
                                                                                      --------------------------------------------
Cash and cash equivalents, end of period                                                        $45,569,153            $9,657,421
                                                                                      ============================================

Supplemental disclosure of cash flow information:
                  Cash paid during the period for interest                                      $   15,738             $563,920
                                                                                      ============================================

Supplemental schedule of noncash financing activities:
                  Receivable for sale of Series E preferred stock                                     $   -            28,097,222
                                                                                      ============================================
</TABLE>

         The accompanying notes are an integral part of these
              condensed consolidated financial statements.


                                        5

<PAGE>

                       INSWEB CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.  BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

         The consolidated financial statements include the accounts of InsWeb
Corporation and its wholly owned subsidiaries, InsWeb Insurance Services,
Inc. (formerly Avatar Insurance Services, Inc.) and Benelytics, Inc. (the
"Company"). Benelytics, Inc. was purchased on December 31, 1998, and the
acquisition was accounted for as a purchase. As of March 31, 2000, InsWeb is
in the process of liquidating Benelytics, Inc. into InsWeb Corporation and
expects to have this liquidation completed by June 30, 2000. All significant
intercompany accounts and transactions have been eliminated in the
consolidated financial statements. Investments in 20 to 50 percent owned
affiliates are accounted for on the equity method. All common share and per
share amounts reflect a 10-for-1 split approved by the Board of Directors in
1997 and a 3-for-2 split authorized in June 1999.

         The accompanying unaudited interim financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States for interim financial information and with the instructions to
Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not contain
all of the information and footnotes required by accounting principles
generally accepted in the United States for complete financial statements. In
the opinion of management, the accompanying unaudited interim condensed
consolidated financial statements reflect all adjustments, which include only
normal recurring adjustments, necessary to present fairly the Company's
financial position as of March 31, 2000 and results of operations and cash
flows for the three months ended March 31, 2000 and 1999, respectively. The
financial data and other information disclosed in these notes to the
condensed consolidated financial statements related to these periods are
unaudited. The results for the three months ended March 31, 2000 are not
necessarily indicative of the results to be expected for the year ending
December 31, 2000.

         These condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-K as filed with the
Securities and Exchange Commission on March 30, 2000 and other information filed
with the Commission.

         SIGNIFICANT CUSTOMERS

         For the three months ended March 31, 2000, three customers accounted
for 29%, 11% and 10%, respectively, of total revenues. For the three months
ended March 31, 1999, three customers accounted for 32%, 13% and 11%,
respectively, of total revenues.

         NET LOSS PER SHARE - BASIC AND DILUTED

         Basic earnings per share is computed using the weighted average number
of shares of common stock outstanding. Diluted earnings per share reflects the
potential dilution that would occur if preferred stock had been converted and
stock options and warrants had been exercised. Common equivalent shares from
preferred stock, stock options and warrants have been excluded from the
computation of net loss per share-diluted as their effect is antidilutive.

         Pro forma net loss per share-basic and diluted represents what the net
loss per share-basic and diluted would have been assuming the conversion of the
outstanding preferred stock as of the beginning of such periods.

         RECLASSIFICATIONS

         Certain amounts in the 1999 financial statements have been
reclassified to conform with the 2000 classifications.

                                        6

<PAGE>

2.  COMPREHENSIVE LOSS

         Total comprehensive loss for the three months ended March 31, 2000 and
1999 was as follows:

<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED
                                                                   MARCH  31,
                                                            2000               1999
                                                            ----               ----
                                                                  (UNAUDITED)
<S>                                                       <C>                  <C>
Net loss                                                  $(13,076,641)        $(6,021,249)
Other comprehensive income (loss):
Foreign currency translation adjustments                        (3,772)                  -
Unrealized gain on investments                                  34,200                   -
                                                     ---------------------------------------
Total comprehensive loss                                  $(13,046,213)        $(6,021,249)
                                                     =======================================
</TABLE>


3.  CASH AND INVESTMENTS

         Cash and investments consist of the following:
<TABLE>
<CAPTION>
                                                                                        MARCH 31           DECEMBER 31,
                                                                                          2000                 1999
                                                                                          ----                 ----
                                                                                      (UNAUDITED)
Cash and cash equivalents:
<S>                                                                                   <C>                  <C>
         Cash                                                                             $2,205,582           $1,131,558
         Money market funds                                                               12,217,634           13,655,335
         Taxable municipal securities                                                      7,000,000            5,000,000
         Commercial paper                                                                 24,145,937            5,901,867
                                                                                    -----------------    -----------------
                                                                                          45,569,153           25,688,760
Short-term investments:
         Certificates of deposit                                                           5,498,285            1,500,000
         Taxable municipal securities                                                      9,400,000                    -
         Commercial paper                                                                 15,789,374           62,563,070
                                                                                    -----------------    -----------------
                                                                                          30,687,659           64,063,070

                                                                                    -----------------    -----------------
Cash, cash equivalents and short-term investments                                        $76,256,812          $89,751,830
                                                                                    =================    =================

Long-term investments - U.S. agency securities                                            $4,981,799           $4,978,761
                                                                                    =================    =================
</TABLE>


4.  RELATED PARTY TRANSACTIONS

         STOCKHOLDER AND CUSTOMER

         A stockholder, who is also a customer, accounted for $204,475 and
$176,175 of the Company's total revenues for the three months ended March 31,
2000 and 1999, respectively. This customer accounted for $202,150 and $0 of
the Company's accounts receivable at March 31, 2000 and December 31, 1999,
respectively.

         AFFILIATE AND CUSTOMER

         An affiliate, who owns a majority interest in a stockholder, is also
a customer and accounted for $76,340 and $50,002 of the Company's revenues
for the three months ended March 31, 2000 and 1999, respectively. This
customer accounted for $2,085 and $15,495 of the Company's accounts
receivable at March 31, 2000 and December 31, 1999, respectively.

                                        7
<PAGE>

         MARKETING AGREEMENTS

         During the three months ended March 31, 2000 and 1999, the Company
recognized $1,245,000 and $447,500, respectively, in marketing expense under a
marketing agreement with an Internet company. A beneficial owner of a
significant number of shares of the outstanding stock of the Internet company is
a principal stockholder of the Company.

5.  INSWEB JAPAN

         In 1998, the Company entered into a Joint Venture Agreement with a
strategic partner and significant stockholder to develop, implement and
market an online insurance marketplace in Japan and the Republic of Korea.
The joint venture is carried out exclusively through a newly formed Japanese
corporation, InsWeb Japan K.K. in which the Company owns a 25% interest. In
conjunction with this agreement, the Company also entered into an agreement
to provide consulting and hosting services to assist InsWeb Japan K.K. in
developing its Internet strategy. For the three months ended March 31, 2000,
$1,202,696 was billed to InsWeb Japan K.K. under this contract and is
included in development and maintenance fees. At March 31, 2000, $319,822 of
accounts receivable was due from InsWeb Japan, K.K.

         The Company's interest in InsWeb Japan K.K. was purchased in
exchange for a promissory note due to the Company's strategic partner. The
promissory note is payable in Yen and accrues interest at 5% per annum, which
is payable quarterly on the last day of each calendar quarter. The promissory
note, together with all accrued and unpaid interest, is due and payable on
the earlier of the closing date of an initial public offering of the
securities of InsWeb Japan K.K. or December 15, 2002. Interest expense
related to this note for the three months ended March 31, 2000 was $17,464.
As of March 31, 2000 and December 31, 1999, $1,460,138 and $1,464,558 was
outstanding under the note, respectively

6.  RECENT ACCOUNTING PRONOUNCEMENTS

         In December 1999, the SEC issued Staff Accounting Bulletin ("SAB") No.
101 Revenue Recognition in Financial Statements. SAB No 101 expresses the views
of the SEC staff in applying accounting principles generally accepted in the
United States to certain revenue recognition issues. In March 2000, the SEC
issued SAB No. 101A, Amendment: Revenue Recognition in Financial Statements. SAB
101A delays the implementation date of SAB 101 for registrants with fiscal years
that begin between December 16, 1999 and March 15, 2000. InsWeb will adopt SAB
101, as required, in the second quarter of 2000 and is evaluating the effect
that such adoption may have on its consolidated results of operations and
financial position. InsWeb is assessing the impact of this SAB on its financial
position, results of operations and cash flows.

         In March 2000, the FASB issued Interpretation No. 44 (FIN No. 44),
"Accounting for Certain Transactions Involving Stock Compensation, an
interpretation of APB Opinion No. 25." FIN No. 44 will be effective July 1,
2000. This interpretation provides guidance for applying APB Opinion No. 25
"Accounting for Stock Issued to Employees." Management has not determined the
impact, if any, that adoption of FIN No. 44 will have on the Company's financial
position, results of operations and cash flows.

         In March 2000, the Emerging Issues Task Force (EITF) of the FASB
reached a consensus on Issue No. 00-2, "Accounting for Web Site Development
Costs" which provides guidance on when to capitalize versus expense costs
incurred to develop a web site. The consensus is effective for web site
development costs in quarters beginning after June 30, 2000. The Company has not
yet determined the impact, if any, this Issue will have on the Company's
financial statements.

7.  SUBSEQUENT EVENTS

STATE FARM INSURANCE

         On April 14, 2000, State Farm Insurance, which accounted for
approximately 29% of the Company's total revenues for the three months ended
March 31, 2000, informed InsWeb that it would not renew its participation
agreement with the Company. Effective May 1, 2000, State Farm is no longer a
participant in InsWeb's marketplaces for auto, term life, homeowners,
condominium and renters insurance. With State Farm's non-renewal, auto
insurance coverage is no longer available to consumers in Vermont and certain
Canadian provinces, and homeowners and renters insurance is available in
significantly fewer states. Term life offerings were not significantly
affected in any state.

                                       8
<PAGE>

eHEALTHINSURANCE

         In April 2000, InsWeb and eHealthInsurance announced the formation
of an online partnership designed to leverage the companies' respective
strengths in marketing, product offerings and customer service. Through this
effort, InsWeb customers shopping for health insurance will access
eHealthInsurance's wide selection of leading insurers, products and
comprehensive service offerings. The exclusive, two-year agreement includes
the marketing of individual health, small-group health and Medicare
supplement insurance offerings from among the insurers participating with
eHealthInsurance. As a result of this new agreement, we are negotiating the
termination of InsWeb's agreements with health insurance carriers.

                                       9
<PAGE>

PART I:           FINANCIAL INFORMATION


ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS

         InsWeb has included in this filing certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995
concerning InsWeb's business, operations and financial condition. The words or
phrases "expects," "anticipates," "intends," "plans," "believes," "seeks,"
"estimates" and similar expressions are generally intended to identify
forward-looking statements. Such forward-looking statements are subject to
various known and unknown risks and uncertainties, and InsWeb cautions you that
any forward-looking information provided by or on behalf of InsWeb is not a
guarantee of future performance. Actual results could differ materially from
those anticipated in such forward-looking statements due to a number of factors,
some of which are beyond InsWeb's control, including but not limited to InsWeb's
limited operating history, anticipated losses, the unpredictability of its
future revenues, reliance on key customers, competition, risks associated with
system development and operation risks, management of potential growth and risks
of new business areas, business combinations, and strategic alliances. All
forward-looking statements are based on information available to InsWeb on the
date hereof and InsWeb assumes no obligation to update such statements.

RECENT DEVELOPMENTS

         On April 14, 2000, State Farm Insurance, which accounted for
approximately 29% of all InsWeb revenues for the three months ended March 31,
2000 and was the Company's largest customer, informed InsWeb that it would not
renew its participation agreement with the Company. Effective May 1, 2000, State
Farm is no longer a participant in InsWeb's marketplaces for auto, term life,
homeowners, condominium and renters insurance. As a result, InsWeb expects a
material decline in revenues in the coming months. With State Farm's nonrenewal,
auto insurance coverage is no longer available to consumers in Vermont and three
Canadian provinces, and homeowners and renters insurance is available in
significantly fewer states. Term life offerings were not significantly affected
in any state.

         As a result of State Farm's decision not to renew its participation, we
have made a number of business decisions addressing our short-term business
plans in order to manage our expenses and our portfolio of cash and short-term
investments, including a reduction of our workforce in April 2000 by
approximately 10% and a reduction in our consumer marketing expenses beginning
in the second quarter of fiscal 2000.

OVERVIEW

         InsWeb operates an online insurance marketplace that enables consumers
to shop online for a variety of insurance products, including automobile, term
life, homeowners, renters and individual health insurance, and obtain insurance
company-sponsored quotes for actual coverage. In order to create this
marketplace, InsWeb has established business relationships with more than 40
insurance companies throughout the United States as of May 1, 2000.

         InsWeb's principal source of revenues is transaction fees. While quotes
obtained through InsWeb's online insurance marketplace are provided to consumers
free of charge, InsWeb's participating insurance companies pay transaction fees
to InsWeb generally based on qualified leads delivered to them electronically.
Qualified leads are produced in two ways: for insurance companies offering
consumers instant online quotes, a qualified lead is produced when a consumer
requests insurance coverage based on a specific quote; for insurance companies
providing e-mail or other offline quotes, a qualified lead is produced when the
consumer clicks to request the quote itself. In either case, transaction fees
are payable whether or not the consumer actually purchases an insurance policy
from the insurance company, and revenue from transaction fees is recognized at
the time the qualified lead is delivered to the insurance company.

         In October 1999, InsWeb began generating revenue as an insurance
agent based on activities it performs related to the sale of certain
automobile insurance policies in California. During the first quarter of
fiscal 2000, InsWeb began expansion of its agency activities to include the
sale of automobile insurance policies in Washington and Arizona. InsWeb's
subsidiary, InsWeb Insurance Services, Inc. has been appointed as an
authorized automobile insurance agent by eight participating insurance
companies in California and by one carrier in both Arizona and Washington.
InsWeb receives a commission based on a percentage of the insurance policy
premium related to each insurance policy sale where InsWeb has acted as


                                       10

<PAGE>

the insurance agent. InsWeb recognizes the revenue from these activities on the
later of the billing date or effective date of the policy sold based on a
percentage of the policy premium.

         InsWeb also generates development and maintenance fees from its
participating insurance companies. InsWeb charges a fee to design and develop
customized interfaces between an insurance company's information system and the
InsWeb site. Development fees are typically recognized when the insurance
company's integration with the InsWeb site becomes operational. Additional
development fees are charged as insurance companies add new products, increase
their geographic coverage and convert to instant quoting capability on InsWeb's
online insurance marketplace, as well as for periodic upgrades and changes to
insurance companies' information resident on the InsWeb site. InsWeb charges
maintenance fees for maintaining and servicing the programs of the individual
insurance companies and for maintaining any hardware at InsWeb's facility that
is dedicated to specific insurance companies. These maintenance fees are
typically payable monthly and are recognized as revenue ratably over the term of
the maintenance agreement. Prepaid development and maintenance fees are recorded
as deferred revenue until earned. Development and maintenance fees are expected
to account for a declining percentage of total revenues as transaction fees and
fees related to InsWeb's activities as an agent increase.

         Product development expenses consist primarily of payroll and
related expenses for development and technology personnel. To date, InsWeb
has not capitalized any of its software development costs. Because the timing
of the commercial release of its products has substantially coincided with
their technological feasibility, all software development costs have been
expensed as incurred. InsWeb expects that its product development expenses
will continue to increase for the foreseeable future. As discussed in the
notes to the financial statements, management has not yet determined the
impact, if any, EITF issue 00-2 "Accounting for Website Development Costs"
will have on the financial statements.

         Sales and marketing expenses consist primarily of payroll and
related expenses for InsWeb's sales and marketing personnel as well as
consumer marketing expenditures for advertising, public relations, promotions
and fees paid to online companies with which InsWeb has contractual
relationships. Through the first quarter of fiscal 2000, InsWeb increased its
sales and marketing expenses in order to establish and maintain relationships
with insurance companies, attract increased consumer traffic to the InsWeb
site, and develop the InsWeb brand. As a result of State Farm's announcement
not to renew its participation agreement with InsWeb and its anticipated
effect on revenues, we intend to reduce our consumer marketing expenses
beginning in the second quarter of fiscal 2000. Accordingly, InsWeb intends
to concentrate its consumer marketing program on maintaining key online
relationships and on selective advertising campaigns designed to maintain
consumer awareness of InsWeb and its online insurance marketplace. InsWeb
also intends to selectively market the InsWeb online marketplace in order to
add new insurance companies and expand and maintain relationships with
participating companies. Although InsWeb expects to reduce its sales and
marketing expenses below amounts reported for the three months ended March
31, 2000, sales and marketing expenses may nevertheless increase compared to
prior year periods.

         General and administrative expenses consist primarily of payroll and
related expenses for InsWeb's management, administrative and accounting
personnel, expenses relating to site operations, professional fees and other
general corporate expenses. InsWeb expects that, in support of its continued
business and its operations as a public company, general and administrative
expenses will continue to increase for the foreseeable future.

REVENUES

         TRANSACTION FEES. Transaction fees accounted for $7.1 million, or
82.3% of total revenues, for the three months ended March 31, 2000 compared
to $2.9 million, or 86.6% of total revenues, for the comparable period in
1999. This increase was primarily the result of the number of leads generated
by the substantial increase in the number of completed shopping sessions,
partially offset by a decline in revenue generated per shopping session. The
increase in shopping sessions resulted from increased consumer traffic due to
InsWeb's consumer marketing activities and the addition of a substantial
number of online relationships.

         During the first quarter of 2000, more than 772,000 shopping
sessions were completed at InsWeb, a 170% increase over the 286,000 shopping
sessions completed in the first quarter of 1999, and a sequential increase of
27% over the more than 610,000 shopping sessions completed in fourth quarter
1999. InsWeb recorded more than 3.9 million unique user sessions during the
first quarter of 2000, an increase of 225% over the approximately 1.2 million
unique user sessions recorded in the prior year quarter, and a sequential
increase of 44% over the 2.7 million unique user sessions in the fourth
quarter of 1999.

                                       11

<PAGE>

         DEVELOPMENT AND MAINTENANCE FEES. Development and maintenance fees
accounted for $1.5 million, or 17.6% of total revenues, for the three months
ended March 31, 2000, compared to $443,000, or 13.4% of total revenues, for
the comparable period in 1999. The increase in development and maintenance
fees resulted primarily from revenue associated with a development agreement
with InsWeb Japan K.K. To a lesser degree, the increase was attributable to
an overall increase in the number of InsWeb's participating insurance
companies.

OPERATING EXPENSES

         PRODUCT DEVELOPMENT. Product development expenses increased to $2.8
million for the three months ended March 31, 2000, from $1.5 million for the
comparable period in 1999. This increase was primarily attributable to the
hiring of additional personnel to support the requirements of InsWeb's growing
network of participating insurance companies and online relationships and to
design, test and deploy InsWeb's product offerings.

         SALES AND MARKETING. Sales and marketing expenses increased to $14.3
million for the three months ended March 31, 2000, from $3.8 million for the
comparable period in 1999. This increase was due to substantial increases in
consumer marketing expenses, including increased costs and fees associated with
new and existing online relationships, costs related to national radio and
television campaigns, an increase in sales and marketing personnel, and
operating costs associated with InsWeb's customer care center and associated
insurance agency activities.

         GENERAL AND ADMINISTRATIVE. General and administrative expenses
increased to $4.8 million for the three months ended March 31, 2000, from $2.4
million for the comparable period in 1999. This increase was primarily due to
increased personnel and related costs, increased office and occupancy costs
associated with additional leased office facilities, and increased depreciation
related to capital expenditures.

         AMORTIZATION OF STOCK-BASED COMPENSATION. Amortization of stock-based
compensation for the three months ended March 31, 2000 was $0.3 million compared
to $0.2 million for the year ended December 31, 1998. This increase was
attributable to the amortization of additional deferred compensation charges
related to certain stock option grants where the Company has determined that the
deemed fair market value on the date of grant was in excess of the exercise
price of the options.

         AMORTIZATION OF INTANGIBLE ASSETS. Amortization of intangible assets
during the three ended March 31, 2000 and 1999 was $782,000. This amount was
attributable to the acquisition of Benelytics in December 1998.

INTEREST INCOME (EXPENSE), NET

         Interest income (expense), net includes income earned on InsWeb's
invested cash and expense related to its outstanding debt obligations. Net
interest income for the three months ended March 31, 2000 was $1.3 million
compared to net interest expense of $468,000 for the comparable period in
1999. The increase in net interest income was primarily a result of the
repayment of the line of credit in fiscal 1999 with the proceeds of its
initial public offering of common stock in July 1999, and increased interest
income on cash and short-term investments in fiscal 2000.

LIQUIDITY AND CAPITAL RESOURCES

         InsWeb has financed its operations primarily through private
placements of equity securities, borrowings from an affiliate of one of its
investors and its initial public offering of its common stock in July 1999.
At March 31, 2000, InsWeb's principal source of liquidity was $76.3 million
in cash, cash equivalents and short-term investments.

         In each period, the use of cash primarily consisted of InsWeb's
operating loss before noncash items. For the three months ended March 31, 2000,
net cash used in operating activities was $13.4 million compared to $6.0 million
in the comparable period in 1999. For the three months ended March, 2000,
noncash items included amortization of intangibles of $0.8 million, depreciation
of fixed assets of $0.7 million and amortization of deferred stock compensation
of $0.3 million. Increases in prepaid assets associated with the prepayment of
online partnership agreements, partially offset by increases in accounts payable
and accrued expenses, also contributed to the cash used in operations for the
three months ended March 31, 2000.

                                       12

<PAGE>

         For the three months ended March 31, 2000, net cash provided from
investing activities was $31.1million, which primarily consisted of the purchase
of short-term investments offset by purchases of equipment and furniture. At
March 31, 2000, InsWeb had no material commitments for capital expenditures but
expects such expenditures to total approximately $6.3 million in 2000, primarily
consisting of equipment, software, furniture and leasehold improvements.

         In October 1999, InsWeb signed a 12-year lease agreement through
2011 for additional office space. To secure this lease InsWeb provided a $5.0
million letter of credit, which increases to $9.5 million in May 2000. This
letter of credit is collateralized by a pledge of its investment portfolio,
which is to be not less than 110% of the letter of credit's face value. In
April, 2000, InsWeb decided to postpone its move to this new facility based
on its foreseeable occupancy needs and is attempting to sublease the facility
for the next 36 to 42 months. Regardless of whether InsWeb is able to
sublease some or all of this facility, InsWeb expects to spend approximately
$6.6 million in leasehold improvements, fixtures and equipment in fiscal year
2000 related to this new facility. In conjunction with all other lease
agreements, InsWeb has total minimum lease obligations of $112.0 million over
the terms of the leases.

         In addition, under various marketing agreements with its online
partners, InsWeb is obligated to make minimum payments totaling $16.9 million
through April 2001.


                                       13
<PAGE>

FACTORS THAT MAY AFFECT OUR FUTURE PERFORMANCE

         OUR FUTURE BUSINESS, OPERATING RESULTS AND FINANCIAL CONDITION ARE
SUBJECT TO VARIOUS RISKS AND UNCERTAINTIES, INCLUDING THOSE DESCRIBED BELOW.

OUR BUSINESS IS DIFFICULT TO EVALUATE BECAUSE WE DID NOT BEGIN TO GENERATE
SIGNIFICANT REVENUES FROM OUR CORE BUSINESS UNTIL 1998

         We were incorporated in February 1995, but we did not begin to generate
         significant transaction fees from our online marketplace until 1998.
         Our limited operating history makes an evaluation of our future
         prospects very difficult. An investor in our common stock must consider
         the uncertainties frequently encountered by early stage companies in
         new and rapidly evolving markets. These uncertainties include:

         -        an evolving and unpredictable business model, which makes
                  prediction of future results uncertain and an investment in
                  our common stock highly speculative;

         -        the lack of a well-developed brand identity, which may limit
                  our ability to draw consumers to our website;

         -        the potential development of comparable services by
                  competitors, which may reduce our market share;

         -        the uncertainty of the extent to which the consumer market
                  will adopt the Internet as a medium for comparison shopping
                  for and purchase of insurance products, which may limit our
                  ability to generate revenue from consumers that visit our
                  online marketplace;

         -        our potential inability to successfully manage our anticipated
                  growth, which could lead to management distractions and
                  increased operating expenses;

         -        our ability to retain key employees; and

         -        our reliance on key customers and ability to retain customers.


         To address these uncertainties, we must, among other things:

         -        refine our business model;

         -        work to expand the efficiencies and geographic coverage of our
                  agency activities;

         -        enhance the brand identity of our online insurance
                  marketplace;

         -        maintain and increase our strategic alliances with other
                  online businesses to increase traffic to our website;

         -        maintain, increase and geographically diversify our base of
                  participating insurance companies;

         -        continue to ensure that our participating insurance companies
                  offer competitive insurance products;

         -        satisfy legal and regulatory requirements applicable to the
                  insurance industry; and

         -        continue to address consumer privacy concerns.

         Our business strategy may not be successful and we may not be able to
         successfully address these uncertainties. Moreover, our ability to take
         the foregoing steps may be hampered by our limited financial resources
         should we fail to rapidly increase revenues or should increased
         revenues be more than offset by increased operating expenses.

WE HAVE A HISTORY OF LOSSES, WE EXPECT FUTURE LOSSES, AND WE MAY NOT ACHIEVE OR
MAINTAIN PROFITABILITY


                                       14
<PAGE>

         Given planned investment levels, our ability to achieve profitability
         will depend upon our ability to generate and sustain substantially
         increased revenues. As a result, we believe that we will incur
         substantial operating losses for the foreseeable future. We incurred
         operating losses of $21.9 million for the year ended December 31, 1998,
         $38.4 million for the year ended December 31, 1999, and $14.4 million
         for the three months ended March 31, 2000. Additionally, as of March
         31, 2000, our accumulated deficit was $87.5 million. Although we have
         experienced significant revenue growth in recent periods, this growth
         rate is not sustainable and will decrease in the future. Our operating
         results for future periods are subject to numerous uncertainties, and
         we may not achieve sufficient revenues to become profitable. Even if we
         achieve profitability, we may not sustain or increase profitability on
         a quarterly or annual basis in the future. If we are unable to achieve
         profitability, we will need to seek additional financing to continue
         our business operations. Such financing could be on terms that are
         dilutive to our existing stockholders or could involve the issuance of
         securities that have rights and preferences that are senior to those
         associated with our common stock. Moreover, if such financing were not
         available or were available only upon terms that were unacceptable to
         us, we could be required to significantly curtail our operations.

OUR FUTURE REVENUES ARE UNPREDICTABLE, OUR OPERATING RESULTS ARE LIKELY TO
FLUCTUATE FROM QUARTER TO QUARTER, AND IF WE FAIL TO MEET THE EXPECTATIONS OF
SECURITIES ANALYSTS OR INVESTORS, OUR STOCK PRICE COULD DECLINE SIGNIFICANTLY

         Due to our limited operating history, the emerging nature of the market
         in which we compete and the high proportion of our revenues that are
         derived from consumer traffic on our website, our future revenues are
         inherently difficult to forecast. We believe that period-to-period
         comparisons of our operating results may not be meaningful, and you
         should not rely upon them as an indication of our future performance.
         Moreover, our expense levels are based largely on our investment plans
         and estimates of future revenues. We may be unable to adjust our
         spending to compensate for an unexpected shortfall in revenues.
         Accordingly, any significant shortfall in revenues relative to our
         planned expenditures would harm our results of operations and could
         cause our stock price to fall sharply, particularly following quarters
         in which our operating results fail to meet the expectations of
         securities analysts or investors.

         Factors that may cause fluctuations in our operating results include
         the following, many of which are outside our control:

         -        We may experience consumer dissatisfaction with our online
                  marketplace as we add or change features, or as the insurance
                  coverage offered by participating insurance companies varies;

         -        Consumer traffic on our online marketplace may decline as a
                  result of the announcement or introduction of a competing
                  online insurance marketplace or other new websites, products
                  or services offered by our competitors;

         -        Such consumer traffic may also fluctuate as a result of
                  changes in consumer acceptance of Internet commerce,
                  particularly in connection with shopping for insurance;

         -        Our revenues may be harmed if we lose one or more significant
                  insurance company relationships or if any of our participating
                  insurance companies merge with one another;

         -        Use of the Internet by consumers may fluctuate due to seasonal
                  factors or other uncontrollable factors affecting consumer
                  behavior and may be affected by slow Internet performance due
                  to technical problems or traffic bottlenecks on the network;

         -        Our ability to convert site visits into transaction fees
                  and/or revenue from insurance agency activities may fluctuate
                  due to changes in our user interface or other features on our
                  site or changes in the filtering criteria used by our
                  participating insurance companies to determine which consumers
                  will be offered quotes; and

         -        Our ability to generate transaction fees and/or revenue from
                  insurance agency activities may also be harmed due to
                  technical difficulties on our website that hamper a consumer's
                  ability to start or complete a shopping session.

                                       15
<PAGE>

SEASONALITY AFFECTING INSURANCE SHOPPING AND INTERNET USAGE MAY CAUSE
FLUCTUATIONS IN OUR OPERATING RESULTS

         We have experienced seasonality in our business associated with general
         slowness in the insurance industry during the year-end holiday period.
         We expect to continue to experience seasonality as our business
         matures. Because of this seasonality, investors may not be able to
         predict our annual operating results based on a quarter-to-quarter
         comparison of our operating results. We believe seasonality will have
         an ongoing impact on our business.

BECAUSE SUBSTANTIALLY ALL OF OUR REVENUE IS ATTRIBUTABLE TO AUTOMOBILE INSURANCE
SHOPPING ON OUR ONLINE MARKETPLACE, WE ARE ESPECIALLY VULNERABLE TO RISKS
RELATED TO THE ONLINE MARKET FOR AUTOMOBILE INSURANCE OR THE AUTOMOBILE
INSURANCE INDUSTRY GENERALLY

         Automobile insurance accounted for approximately 78% of our total
         revenues in the year ended December 31, 1999 and approximately 70%
         in the three months ended March 31, 2000. We anticipate that
         automobile insurance will continue to account for a substantial
         portion of our revenues for the foreseeable future. As a result, if
         we fail to attract a broad base of consumers to shop for automobile
         insurance on our site, or if changes in the automobile insurance
         industry make electronic commerce a less attractive means to shop
         for this type of insurance, our ability to generate revenue will be
         reduced and our business will be harmed. In addition, our business
         is likely to be affected by any events or changes that affect the
         automobile insurance industry as a whole.

IF WE ARE UNABLE TO PROMOTE OUR BRAND AND EXPAND OUR BRAND RECOGNITION, OUR
ABILITY TO DRAW CONSUMERS TO OUR WEBSITE WILL BE LIMITED

         A growing number of websites offer services that are similar to and
         competitive with the services offered on our online insurance
         marketplace. Therefore, establishing and maintaining our brand is
         critical to attracting additional consumers to our website,
         strengthening our relationships with participating insurance companies
         and attracting new insurance companies. If our brand does not achieve
         positive recognition in the market, our ability to draw consumers to
         our website will be limited. In order to attract and retain consumers
         and insurance companies and to promote and maintain our brand, through
         the first quarter of fiscal 2000, we increased our financial commitment
         to creating and maintaining prominent brand awareness. As a result of
         State Farm's announcement not to renew its participation agreement with
         InsWeb, we intend to reduce our consumer marketing expenses beginning
         in the second quarter of fiscal 2000. Our continued consumer marketing
         program will include the maintenance of certain of our network of
         online relationships, and selective online and print, radio and
         television advertising campaigns designed to maintain consumer
         awareness of InsWeb and our online insurance marketplace. If our
         marketing efforts do not generate a corresponding increase in revenues
         or we otherwise fail to successfully promote our brand, or if these
         efforts require excessive expenditures, our business will be harmed.
         Moreover, if visitors to our website do not perceive our existing
         services or the products and services of our participating insurance
         companies to be of high quality, or if we alter or modify our brand
         image, introduce new services or enter into new business ventures that
         are not favorably received, the value of our brand could be harmed.

OUR PLANS TO OFFER ADDITIONAL SERVICES COULD RESULT IN SIGNIFICANT EXPENDITURES,
AND WE MAY NOT GENERATE SUFFICIENT REVENUE TO OFFSET THESE EXPENDITURES

         We intend to offer additional services including, among other things:

         -        performing selected activities on behalf of insurance
                  companies as an authorized agent;

         -        adding new insurance companies and helping our existing
                  insurance companies to expand the number of states in which
                  they are offering coverage in our online marketplace;

         -        increasing the level of technology integration between our
                  platform and the systems of our participating insurance
                  companies;

         -        attempting to leverage our technology; and


                                       16
<PAGE>

         -        continuing our market presence through relationships with
                  Internet portals, financial institutions, websites oriented to
                  activities that involve the purchase of insurance, such as
                  automobile shopping sites, and other online companies.

         We may not be able to offer these additional services in a
         cost-effective or timely manner, or these efforts may not increase the
         overall market acceptance of our products and services. Expansion of
         our operations in this manner could also require significant additional
         expenditures and strain our management, financial and operational
         resources. The lack of market acceptance of these efforts, regulatory
         issues, or our inability to generate enough revenue from these expanded
         services or products to offset their cost could harm our business.

COMPETITION IN THE MARKET FOR ONLINE DISTRIBUTION OF INSURANCE IS INTENSE, AND
IF WE ARE UNABLE TO COMPETE EFFECTIVELY WITH CURRENT COMPETITORS OR NEW
COMPETITORS THAT ENTER THE MARKET, THE FEES PAID TO US BY PARTICIPATING
INSURANCE COMPANIES MAY FALL, THE FEES CHARGED BY ONLINE COMPANIES WITH WHICH WE
HAVE STRATEGIC RELATIONSHIPS MAY RISE, AND OUR MARKET SHARE MAY SUFFER

         The online insurance distribution market is a new industry and, like
         the broader electronic commerce market, is both rapidly evolving and
         highly competitive. Increased competition, particularly by companies
         offering online insurance distribution, could reduce the fees we are
         able to charge our participating insurance companies or increase the
         fees we are required to pay to online companies with which we have
         strategic relationships, resulting in reduced margins or loss of market
         share, any of which could harm our business.

         Some of our current competitors have longer operating histories, larger
         customer bases, greater brand recognition and significantly greater
         financial, marketing and other resources than we do. In addition, we
         believe we will face increasing competition as the online financial
         services industry develops and evolves. Our current and future
         competitors may be able to:

         -        undertake more extensive marketing campaigns for their brands
                  and services;

         -        devote more resources to website and systems development;

         -        adopt more aggressive pricing policies; and

         -        make more attractive offers to potential employees, online
                  companies and third-party service providers.

         Accordingly, we may not be able to maintain or grow consumer traffic to
         our website and our base of participating insurance companies, our
         competitors may grow faster than we do, or companies with whom we have
         strategic relationships may discontinue their relationships with us,
         any of which would harm our business.

IF OUR PARTICIPATING INSURANCE COMPANIES DO NOT CONTINUE TO PROVIDE HIGH QUALITY
PRODUCTS AND SERVICE TO CONSUMERS, OUR BRAND WILL BE HARMED AND OUR ABILITY TO
ATTRACT CONSUMERS TO OUR WEBSITE WILL BE LIMITED

         Our ability to provide a high quality shopping experience to consumers
         depends in part on the quality of the products and services consumers
         receive from our participating insurance companies, including timely
         response to requests for quotes or coverage. If our participating
         insurance companies do not provide consumers with high-quality products
         and services, the value of our brand may be harmed and the number of
         consumers using our services may decline. We have from time to time
         received complaints from consumers who have not received a timely
         response to a request for an insurance quote. Although we have taken
         steps and proposed methods to encourage our participating insurance
         companies to be responsive to consumer requests, these steps and/or
         proposed methods may not be successful. In addition, if any of our
         major participating insurance companies were to discontinue their
         business, be downgraded by insurance company rating services or be
         financially harmed by trends in the insurance industry, our brand may
         be harmed.

BECAUSE SEVERAL OF THE INSURANCE COMPANIES WITH WHICH WE HAVE RELATIONSHIPS ARE
MAJOR STOCKHOLDERS OR ARE ASSOCIATED WITH MEMBERS OF OUR BOARD OF DIRECTORS, WE
MAY FIND IT DIFFICULT TO TERMINATE OR SUSPEND THE PARTICIPATION OF ONE OF THESE
INSURANCE COMPANIES BASED UPON THE QUALITY OF ITS SERVICE. THIS COULD, IN TURN,
CAUSE THE QUALITY OF OUR SERVICES TO DECREASE AND HARM OUR BRAND IMAGE WITH
CONSUMERS

                                       17
<PAGE>

         Several insurance companies participating in our online marketplace own
         significant portions of our outstanding stock, are affiliated with
         members of our board of directors or have close business relationships
         with members of our board. One insurance company, Nationwide, holds
         approximately 9% of our outstanding common stock, and Richard D.
         Headley, Senior Vice President and Chief Information Officer of
         Nationwide Insurance Enterprise, an affiliate of Nationwide, is a
         member of our board. Another insurance company, CNA, holds
         approximately 6% of our outstanding common stock. Most of our other
         outside directors are affiliated with companies, such as insurance
         brokerage firms, that may have substantial business dealings with many
         of the insurance companies with which we have relationships. As a
         result of such affiliations or relationships, we may find it difficult
         to terminate or suspend the participation of one of these insurance
         companies based upon the quality of its service. This could, in turn,
         cause the quality of our services to decrease and harm our brand image
         with consumers.

BECAUSE A LIMITED NUMBER OF INSURANCE COMPANIES ACCOUNT FOR A MAJORITY OF OUR
REVENUES, THE LOSS OF A SINGLE INSURANCE COMPANY RELATIONSHIP COULD RESULT IN A
SUBSTANTIAL DROP IN OUR REVENUES

         Revenues from State Farm, AIG and American Family accounted for
         approximately 31%, 11% and 11%, respectively, of our revenues for
         the year ended December 31, 1999, and revenues from State Farm, GE
         Financial Assurance and AIG accounted for approximately 29%, 11% and
         10%, respectively, of our revenues for the three months ended March
         31, 2000. In April 2000, State Farm Insurance, which accounted for
         approximately 29% of all InsWeb revenues for the three months ended
         March 31, 2000, informed InsWeb that it would not renew its
         participation agreement with InsWeb. Effective May 1, State Farm is
         no longer participating in InsWeb's marketplaces for auto, term
         life, homeowners, condominium and renters insurance. With State
         Farm's nonrenewal, auto insurance coverage is no longer available to
         consumers in Vermont and three provinces in Canada, and homeowners
         and renters insurance is available in significantly fewer states.
         Term life offerings were not significantly affected in any state. As
         a result of State Farm's withdrawal, we expect a material decline in
         revenues in the near term until additional agreements with new
         carriers can be negotiated and these carriers are integrated into
         InsWeb's marketplaces. Should one or more of our other key insurance
         company partners cease to participate in our online marketplace, or
         should it change its underwriting criteria or geographic coverage in
         a way that reduces the proportion of consumers that are offered
         quotes from that insurance company, our operating results could be
         materially harmed. Because of the broad market presence of some of
         our participating insurance companies, we expect to continue to
         generate a substantial portion of our revenues from a limited number
         of insurance companies for the foreseeable future. In addition,
         although new carriers may be signed up to participate in our online
         marketplace, these new carriers may not replace revenues lost as a
         result of State Farm's nonrenewal. Moreover, there can be no
         assurance we will be able to add any new carriers.

IN MOST JURISDICTIONS, WE RELY ON THE PARTICIPATION OF A LIMITED NUMBER OF
INSURANCE COMPANIES ON OUR ONLINE MARKETPLACE, AND THE LOSS OF ANY OF THESE
INSURANCE COMPANIES COULD MAKE OUR ONLINE MARKETPLACE LESS ATTRACTIVE TO
CONSUMERS

         Consumer demand for the services offered on our website in any
         jurisdiction is substantially dependent upon the participation of
         competing brand-name insurance companies offering competitive quotes
         for a given insurance product in that jurisdiction. Accordingly, the
         success of our business depends on our ability to attract and retain
         well-known insurance companies to participate in our marketplace.
         Although we currently have relationships with more than 40 insurance
         companies overall, in individual jurisdictions where competing
         quotes for comparable products are available on our online
         marketplace, the number of companies offering quotes ranges from two
         to 15. If we are unable to increase the number of insurance
         companies that participate in our online marketplace, particularly
         in the jurisdictions where we currently offer comparable insurance
         products from only two or three insurance companies, we may not be
         able to attract additional consumers or may lose our existing
         consumers to other online competitors offering a wider variety of
         insurance companies. As of March 31, 2000, there were 26
         jurisdictions in which three or fewer insurance companies were
         offering automobile insurance quotes on our online marketplace. Of
         those, State Farm was a participant in 25 jurisdictions and AIG is a
         participant in 15 jurisdictions. As a result of State Farm's
         nonrenewal of their contract effective on May 1, 2000, there
         currently are 10 jurisdictions in which we have only one insurance
         company offering automobile quotes on our online marketplace and two
         states in which there is no participating carrier. If any other
         insurance company participating in a number of jurisdictions
         discontinued or significantly reduced its participation in our
         online marketplace, the attractiveness of the marketplace to
         consumers in these jurisdictions would be greatly diminished.


                                       18
<PAGE>

         In addition, we believe that there is a general trend toward
         consolidation in the insurance industry. For example, in October 1999
         Allstate Corp. announced an agreement to acquire the personal lines
         business of CNA Financial Corp., one of our participating insurance
         companies. Also, in March 2000, CNA announced its intention to sell its
         life insurance and reinsurance units. In the jurisdictions where we
         currently offer comparable insurance products from three or fewer
         insurance companies, the loss of one or more of these companies,
         whether due to industry consolidation or otherwise, could materially
         reduce the selection of insurance companies available to consumers on
         our website, thereby substantially reducing the attraction of our
         online marketplace to consumers.

WE MAY HAVE DIFFICULTY INTEGRATING NEW INSURANCE COMPANIES INTO OUR ONLINE
MARKETPLACE OR AGENCY OPERATIONS, WHICH COULD HARM OUR ABILITY TO OFFER IMPROVED
COMPARISON SHOPPING OPPORTUNITIES AND THUS LIMIT THE ATTRACTIVENESS OF OUR
SERVICE TO CONSUMERS

         Integration of an insurance company into our online marketplace
         requires a significant commitment of time and resources on our part and
         on the part of the insurance company, and is a technologically
         difficult process. This integration process typically takes from three
         to six months to complete and typically requires us to expend between
         160 and 2,000 man-hours. Though integration into our agency operations
         may require fewer resources to implement than integration of an
         insurance company into our online marketplace, potential participating
         insurance companies may not be willing to invest the time and resources
         necessary to achieve this integration, or we may not be able to
         overcome the technological difficulties associated with, or devote the
         time and resources necessary to, successfully integrate the insurance
         company into our online marketplace or our agency operations.

WE DO NOT HAVE EXCLUSIVE RELATIONSHIPS OR LONG-TERM CONTRACTS WITH INSURANCE
COMPANIES, WHICH MAY LIMIT OUR ABILITY TO RETAIN THESE INSURANCE COMPANIES AS
PARTICIPANTS IN OUR MARKETPLACE AND MAINTAIN THE ATTRACTIVENESS OF OUR SERVICES
TO CONSUMERS

         We do not have an exclusive relationship with any of the insurance
         companies whose insurance products are offered on our online
         marketplace, and thus, consumers may obtain quotes and coverage from
         these insurance companies without using our website. Our
         participating insurance companies offer their products directly to
         consumers through insurance agents, mass marketing campaigns or
         through other traditional methods of insurance distribution. These
         insurance companies can also offer their products and services over
         the Internet, either directly to consumers or through one or more of
         our online competitors, or both. In addition, most of our agreements
         with our participating insurance companies are cancelable at the
         option of either party upon 90 days' notice or less. As discussed
         above, in April 2000, State Farm Insurance, which accounted for
         approximately 29% of InsWeb's total revenues for the three months
         ended March 31, 2000, informed InsWeb that it would not renew its
         participation agreement with the Company.

TRAFFIC ON OUR WEBSITE IS HEAVILY DEPENDENT ON OUR ONLINE RELATIONSHIPS. THESE
RELATIONSHIPS MAY NOT GENERATE SUFFICIENT REVENUES TO JUSTIFY THE FEES WE PAY TO
ONLINE COMPANIES. FURTHER, OUR CONSUMER TRAFFIC MAY DECLINE IN THE EVENT AN
ONLINE RELATIONSHIP IS UNSUCCESSFUL

         We rely on relationships with a variety of Internet portals, financial
         institutions, and other online companies to attract consumers to our
         website. In a typical arrangement, the online company includes a "link"
         on its website on which a user can click to jump to our website or to a
         site that we operate under the online company's name; as part of the
         arrangement, we typically pay the online company a portion of the
         resulting transaction fees and in some cases a fixed fee. These
         relationships may not continue to generate a substantial amount of new
         traffic on our website, or the revenues generated by these
         relationships may be insufficient to justify our payment obligations.
         Furthermore, the value of these relationships is based on the continued
         positive market presence, reputation and growth of these online
         companies' websites and services. Any decline in the market presence,
         business or reputation of these online companies' websites and services
         will reduce the value of these relationships to us and could harm our
         business.


                                       19
<PAGE>

         We have entered into an arrangement with Yahoo! Inc. under which our
         site is the exclusive insurance site included in the Yahoo! Insurance
         Information Center. For the year ended December 31, 1999 and three
         months ended March 31, 2000, we received approximately 10.1% and 8.2%
         of our website traffic from our online relationship with Yahoo!,
         respectively, and approximately 33.7% and 33.1% of our traffic from all
         of our online relationships combined, respectively. In addition, in
         December 1999, we entered into a marketing agreement with Microsoft and
         in February 2000, we entered into a marketing agreement with certain
         properties owned by America Online. Our ability to increase our
         revenues will depend, in part, on increased traffic to our website that
         we expect to generate through these online relationships.

         Our relationships with online companies typically have a 12-month term
         and do not provide us with automatic renewal rights upon termination.
         For example, our agreement with Yahoo! expires in the third quarter of
         fiscal 2000. In addition, these agreements are typically terminable by
         either party on 30 to 90 days' notice. There can be no assurance we
         will be able to negotiate or renew marketing agreements with online
         companies on terms that are acceptable to us. The termination,
         nonrenewal or renewal on unfavorable terms of a relationship from which
         we generate significant traffic to our website, such as our
         relationship with Yahoo!, would harm our business. Additionally, an
         online company's failure to maintain efficient and uninterrupted
         operation of its computer and communications hardware systems would
         likely reduce the amount of traffic we receive at our site, harming our
         business.

LAWS AND REGULATIONS THAT GOVERN THE INSURANCE INDUSTRY COULD EXPOSE US, OR OUR
PARTICIPATING INSURANCE COMPANIES, OUR OFFICERS, OR AGENTS WITH WHOM WE
CONTRACT, TO LEGAL PENALTIES IF WE FAIL TO COMPLY, AND COULD REQUIRE CHANGES TO
OUR BUSINESS

         We perform functions for licensed insurance companies and are,
         therefore, required to comply with a complex set of rules and
         regulations that often vary from state to state. If we fail to comply
         with these rules and regulations, we, an insurance company doing
         business with us, our officers, or agents with whom we contract, could
         be subject to various sanctions, including censure, fines, a
         cease-and-desist order or other penalties. This risk, as well as
         changes in the regulatory climate or the enforcement or interpretation
         of existing law, could expose us to additional costs, including
         indemnification of participating insurance companies for their costs,
         and could require changes to our business or otherwise harm our
         business. Furthermore, because the application of online commerce to
         the consumer insurance market is relatively new, the impact of current
         or future regulations on InsWeb's business is difficult to anticipate.

THE RECENTLY ENACTED GRAMM-LEACH-BLILEY ACT MAY ALTER THE TRADITIONAL STRUCTURE
OF INSURANCE REGULATION AND IMPOSE NEW OR ADDITIONAL LEGAL REQUIREMENTS ON OUR
BUSINESS

         The November 1999 passage of the Gramm-Leach-Bliley Act (S.900)
         increased the potential for significant changes in the structure and
         regulation of the insurance industry. Traditionally, regulation of
         insurance has been almost exclusively the province of the states,
         including regulation of sales practices, underwriting requirements and
         claims payments. Moreover, with limited exceptions, securities firms
         and banking institutions historically were prohibited from engaging in
         the business of insurance, and were regulated by federal agencies. The
         Gramm-Leach-Bliley Act eliminated these legislative barriers between
         segments of the financial services industry. Although insurance will
         still be regulated primarily by the states, insurance entities that
         become part of a financial services institution may be indirectly
         affected by the federal regulatory requirements pertaining to banks or
         securities firms.

OUR INTENDED EXPANSION OF OUR BUSINESS, INCLUDING, IN PARTICULAR, OUR AGENCY
ACTIVITIES, WILL SUBJECT US TO ADDITIONAL REGULATIONS WHICH MAY DELAY OR PREVENT
OUR EXPANSION AND HARM OUR BUSINESS

         Over time, we intend to expand our operations to include new products
         and services and to offer existing and new products in new
         jurisdictions, which may require us to comply with additional laws and
         regulations. If we fail to adequately comply with these laws and
         regulations, our ability to offer some of our products or services in a
         particular jurisdiction could be delayed or prevented and our business
         could be harmed. Compliance with these laws and regulations and those
         of other jurisdictions into which we expand may require us to obtain
         appropriate business licenses, make necessary filings and obtain
         necessary bonds, appoint foreign agents and make periodic business
         reports.


                                       20
<PAGE>

IF WE ARE UNABLE TO SAFEGUARD THE SECURITY AND PRIVACY OF CONSUMERS' AND
PARTICIPATING INSURANCE COMPANIES' CONFIDENTIAL DATA, CONSUMERS AND INSURANCE
COMPANIES MAY NOT USE OUR SERVICES AND OUR BUSINESS MAY BE HARMED

         A significant barrier to electronic commerce and communications is the
         secure transmission of personally identifiable information of Internet
         users as well as other confidential information over public networks.
         If any compromise or breach of security were to occur, it could harm
         our reputation and expose us to possible liability. A party who is able
         to circumvent our security measures could misappropriate proprietary
         information or cause interruptions in our operations. We may be
         required to make significant expenditures to protect against security
         breaches or to alleviate problems caused by any breaches. To date, we
         have experienced no breaches in our network security. We rely on
         encryption and authentication technology licensed from third parties to
         provide the security and authentication necessary to effect secure
         transmission of confidential information, such as names, addresses,
         Social Security and credit card numbers, user names and passwords and
         insurance company rate information. Advances in computer capabilities,
         new discoveries in the field of cryptography, or other events or
         developments could result in a compromise or breach of the algorithms
         we use to protect consumers' and insurance companies' confidential
         information.

UNCERTAINTY IN THE MARKETPLACE REGARDING THE USE OF INTERNET USERS' PERSONAL
INFORMATION, OR PROPOSED LEGISLATION LIMITING SUCH USE, COULD REDUCE DEMAND FOR
OUR SERVICES AND RESULT IN INCREASED EXPENSES

         Concern among consumers and legislators regarding the use of personal
         information gathered from Internet users could create uncertainty in
         the marketplace. This could reduce demand for our services, increase
         the cost of doing business as a result of litigation costs or increased
         service delivery costs, or otherwise harm our business. Legislation has
         been proposed that would limit the uses of personally identifiable
         information of Internet users gathered online or require online
         services to establish privacy policies. Many state insurance codes
         limit the collection and use of personal information by insurance
         companies, agents, or insurance service organizations.

SYSTEM FAILURES COULD REDUCE OR LIMIT TRAFFIC ON OUR WEBSITE AND HARM OUR
ABILITY TO GENERATE REVENUE

         Since launching our online marketplace, we have experienced occasional
         minor system failures or outages which have resulted in the online
         marketplace being out of service for a period ranging from several
         minutes to three hours while our technicians brought backup systems
         online. We may experience further system failures or outages in the
         future that could disrupt the operation of our website and could harm
         our business. Our revenues depend in large part on the volume of
         traffic on our website and, more particularly, on the number of
         insurance quotes generated by our website in response to consumer
         inquiries. Accordingly, the performance, reliability and availability
         of our website, quote-generating systems and network infrastructure are
         critical to our reputation and our ability to attract a high volume of
         traffic to our website and to attract and retain participating
         insurance companies. Moreover, we believe that consumers who have a
         negative experience with an electronic commerce website may be
         reluctant to return to that site. Thus, a significant failure or outage
         affecting our systems could result in severe long-term damage to our
         business.

IF WE DO NOT SUCCESSFULLY ENHANCE OR EXPAND OUR TECHNOLOGY INFRASTRUCTURE TO
ACCOMMODATE INCREASES IN THE VOLUME OF TRAFFIC ON OUR WEBSITE, OUR WEBSITE MAY
NOT PERFORM AT LEVELS THAT ARE SATISFACTORY TO CONSUMERS

         We are continually enhancing and expanding our technology, quote
         generating systems, network infrastructure and other technologies to
         accommodate the volume of traffic on our website. We may be
         unsuccessful in these efforts or we may be unable to accurately project
         the rate or timing of increases in the volume of traffic on our
         website. In addition, we cannot predict whether additional network
         capacity will be available from third party suppliers as we need it.
         Also, our network or our suppliers' networks might be unable to timely
         achieve or maintain a sufficiently high capacity of data transmission
         to timely process orders or effectively download data, especially if
         our website traffic increases. Our failure to achieve or maintain high
         capacity data transmission could significantly reduce consumer demand
         for our services.

OUR FACILITIES AND SYSTEMS ARE VULNERABLE TO NATURAL DISASTERS AND OTHER
UNEXPECTED LOSSES, AND WE MAY NOT HAVE ADEQUATE INSURANCE TO COVER SUCH LOSSES

         Our computer hardware operations are located in leased facilities in
         Redwood City. A full backup system is located in Irvine, California.
         Each of these areas is susceptible to earthquakes. If both of these
         locations


                                       21
<PAGE>

         experienced a system failure, the performance of our website would be
         harmed. These systems are also vulnerable to damage from fire, floods,
         power loss, telecommunications failures, break-ins and similar events.
         If we seek to replicate our systems at other locations, we will face a
         number of technical challenges, particularly with respect to database
         replications, which we may not be able to address successfully.
         Although we carry property and business interruption insurance, our
         coverage may not be adequate to compensate us for all losses that may
         occur. Our servers may also be vulnerable to computer viruses, physical
         or electronic break-ins and similar disruptions.

WE MAY EXPERIENCE TECHNOLOGICAL PROBLEMS OR SERVICE INTERRUPTIONS WITH
INDIVIDUAL INSURANCE COMPANIES, WHICH COULD HARM THE QUALITY OF SERVICE ON OUR
WEBSITE

         Several of our participating insurance companies have chosen a
         technical solution that requires that our Web servers communicate with
         these insurance companies' computer systems in order to perform the
         filtering and risk analysis and rating functions required to generate
         quotes. Thus, the availability of quotes from a given insurance company
         may depend in large part upon the reliability of that insurance
         company's own computer systems, over which we have no control. A
         malfunction in an insurance company's computer system or in the
         Internet connection between our Web servers and the insurance company's
         system, or an excess of data traffic on that system, could result in a
         delay in the delivery of e-mail quotes or could cause an insurance
         company that provides instant quotes to go offline until the problem
         can be remedied. Further, a computer malfunction could cause an
         insurance company to quote erroneous rates, in which case the insurance
         company would be required to take itself offline until the malfunction
         can be corrected. Any technological problems with or interruption of
         communications with an insurance company's computer systems could
         materially reduce the number of competing insurance companies available
         to provide quotes, and therefore the level of service perceived by
         consumers, on our online marketplace.

OUR RECENT GROWTH AND SUBSEQUENT REDUCTION IN FORCE HAS PLACED A SIGNIFICANT
STRAIN ON OUR MANAGEMENT, SYSTEMS AND RESOURCES, AND WE MAY EXPERIENCE
DIFFICULTIES IN MANAGING OUR OPERATIONS IN THE FUTURE

         Through the quarter ended March 31, 2000, we experienced growth and
         expansion which placed a strain on our administrative, operational and
         financial resources and increased demands on our systems and controls.
         In April, 2000, as a result of State Farm's decision not to renew its
         participation on InsWeb's marketplace, we reduced our workforce by
         approximately 10%. If our management is unable to manage our resources
         effectively, our business will be harmed. This prior growth and
         subsequent reduction in force has resulted in a continuing increase in
         the level of responsibility for our management personnel. We anticipate
         that our continued operations will require us to retain our current
         personnel and to recruit, hire, train and retain new managerial,
         technical, sales and marketing personnel based on the attrition of our
         current employee base. Our ability to manage our operations
         successfully will also require us to improve our operational,
         management and financial systems and controls on a timely basis.

WE RELY ON THE SERVICES OF OUR EXECUTIVE OFFICERS AND OTHER KEY PERSONNEL, WHOSE
KNOWLEDGE OF OUR BUSINESS AND THE INSURANCE INDUSTRY AND TECHNICAL EXPERTISE
WOULD BE EXTREMELY DIFFICULT TO REPLACE

         Our future success is substantially dependent on the continued services
         and continuing contributions of our senior management and other key
         personnel, particularly Hussein A. Enan, our Chairman, President and
         Chief Executive Officer; James Corroon, Vice Chairman of the Board; and
         Mark P. Guthrie, Executive Vice President, Chief Operating Officer and
         Chief Financial Officer (acting). The loss of the services of any of
         our executive officers or other key employees could harm our business.
         For example, in March 2000, Stephen Robertson, our Chief Financial
         Officer, resigned to pursue other professional interests. This
         resignation has put additional pressure on our executive management
         team to fulfill his functional responsibilities. As of the date of
         this report, we have not recruited a new Chief Financial Officer.

         We have no long-term employment agreements with any of our key
         personnel other than Mr. Enan, whose employment agreement expires in
         July 2002. We maintain a $2 million life insurance policy on Mr.
         Enan that names us as the beneficiary, but maintain no similar
         insurance on any of our other key employees. Additionally, we have
         granted additional cash and stock option incentives in order to
         retain certain of our executive officers and certain other key
         personnel. Payment of these incentives is subject to these
         individuals completing service terms from six months to one year
         from April 2000. Mr. Enan and Mr. Corroon opted not to participate
         in this program. As the value of these incentives is highly
         dependent on an increase in the market price of our common stock,
         there can be no assurance we

                                       22
<PAGE>

         will be able to retain such key employees through or after their
         retention period nor retain or recruit other officers and key employees
         in the future.

BECAUSE OF INTENSE COMPETITION FOR TECHNICAL PERSONNEL, WE MAY NOT BE ABLE TO
RECRUIT OR RETAIN NECESSARY PERSONNEL, WHICH COULD SLOW THE PROCESS OF ADDING
NEW INSURANCE COMPANIES TO OUR WEBSITE OR OTHERWISE HARM OUR BUSINESS

         Our future success depends on our continuing ability to attract, retain
         and motivate highly skilled employees, particularly with respect to
         technology development and implementation, including integration of
         insurance companies into our online marketplace. If we are not able to
         attract and retain new personnel, particularly to expand our technology
         development and implementation team, our business will be harmed. The
         implementation of new insurance companies on our site is a
         technologically complex and labor-intensive process. Accordingly, any
         difficulty we face in attracting and retaining talented development and
         implementation personnel could slow the process of adding new insurance
         companies to our online marketplace and therefore limit our ability to
         increase the attractiveness of our services to consumers. Competition
         for personnel in our industry is intense and we have had a high
         turnover rate of employees over the last two quarters. We may be unable
         to retain our key employees or attract, assimilate or retain other
         highly qualified employees in the future. We have from time to time
         experienced, and we expect to continue to experience in the future,
         difficulty in hiring and retaining employees with appropriate
         qualifications.

OUR SUCCESS DEPENDS ON CONTINUED GROWTH OF ELECTRONIC COMMERCE, WHICH MAY NOT
ACHIEVE BROAD ACCEPTANCE BY CONSUMERS

         Our future revenues and profits are substantially dependent upon the
         widespread acceptance and use of the Internet by consumers as an
         effective medium for commerce. Rapid growth in the use of the Internet
         is a recent phenomenon, and it may not continue, or the Internet may
         not be adopted as a medium of commerce by a broad base of consumers. If
         a broad base of consumers do not adopt the Internet as a medium of
         commerce, our business may be materially adversely affected.

OUR SUCCESS DEPENDS ON THE WILLINGNESS OF CONSUMERS TO SHOP FOR AND PURCHASE
INSURANCE ON THE INTERNET INSTEAD OF BY MORE TRADITIONAL MEANS; CONSUMERS MAY
NOT BE WILLING TO DO THIS

         Shopping for and purchasing insurance on the Internet is a relatively
         untested concept, and if it does not gain widespread acceptance, our
         business may fail. Demand and market acceptance for recently introduced
         services and products on the Internet are subject to a high level of
         uncertainty, and there are few proven services and products. Our
         success will depend on our ability to engage consumers who have
         historically shopped for and purchased insurance through traditional
         distribution channels. In order for us to be successful, many of these
         consumers must be willing to utilize new ways of conducting business
         and exchanging information. In addition, a substantial proportion of
         the consumers who use our website may be using our service because it
         is new and different rather than because they believe that it offers a
         better way to shop for insurance. Such consumers may use our service
         only once or twice and then return to more familiar means of shopping
         for and purchasing insurance.

IF THE INTERNET DOES NOT CONTINUE TO DEVELOP AND RELIABLY SUPPORT THE DEMANDS
PLACED ON IT BY ELECTRONIC COMMERCE AND OTHER HIGH VOLUME APPLICATIONS, OUR
BUSINESS WILL SUFFER

         The Internet may not become a viable medium for commerce or comparison
         insurance shopping for a number of reasons, including potentially
         inadequate development of the necessary network infrastructure or
         delayed development of enabling technologies and performance
         improvements. If the Internet continues to experience significant
         growth in the number of users, levels of traffic or networks'
         capacities for transmitting large amounts of data, the Internet's
         infrastructure may not be able to support the demands placed upon it.
         The Internet has experienced a variety of outages and other delays as a
         result of damage to portions of its infrastructure, and it could face
         additional outages and delays in the future. These outages and delays
         could reduce the level of traffic and therefore the number of consumer
         insurance inquiries on our website. In addition, the Internet could
         lose its viability due to delays in the development or adoption of new
         standards and protocols required to handle increased levels of Internet
         activity, or due to increased governmental regulation. Changes in or
         insufficient availability of telecommunications services to support the
         Internet could also result in slower response times and reduced use of
         the Internet.


                                       23
<PAGE>

REGULATION OF THE INTERNET IS UNSETTLED, AND FUTURE REGULATIONS COULD INHIBIT
THE GROWTH OF THE INTERNET AND OTHERWISE HARM OUR BUSINESS

         The laws governing the Internet remain largely unsettled, even in areas
         where there has been some legislative action. Furthermore, the growth
         and development of the market for electronic commerce may prompt the
         enactment of more stringent consumer protection laws that may impose
         additional burdens on companies conducting business online. The
         adoption of additional laws or regulations may inhibit the growth of
         the Internet as a medium for commerce and comparison insurance
         shopping, which could, in turn, decrease demand for our services,
         increase our cost of doing business, or otherwise harm our business. In
         addition, applicability to the Internet of existing laws governing
         issues including property ownership, copyrights and other intellectual
         property issues, taxation, libel and personal privacy is uncertain. The
         vast majority of these laws were adopted prior to the advent of the
         Internet and related technologies and, as a result, do not contemplate
         or address the unique issues of the Internet and related technologies.

OUR INTERNATIONAL OPERATIONS ARE SUBJECT TO VARIOUS RISKS

         As of May 1, 2000, our international operations consist of
         activities with and through our joint venture partner, InsWeb Japan
         K.K. (of which we currently own a 25% equity interest) to develop
         and maintain an online insurance marketplace in Japan. Though our
         foreign operations are limited, they are subject to various inherent
         risks, including:

               -    the impact of recessions in foreign economies on the level
                    of consumers' insurance shopping and purchasing behavior;

               -    greater difficulty in accounts receivable collection and
                    longer collection periods;

               -    unexpected changes in regulatory requirements, particularly
                    with respect to the insurance industry;

               -    difficulties and costs of staffing and managing foreign
                    operations;

               -    reduced protection for intellectual property rights in some
                    countries;

               -    potentially adverse tax consequences; and

               -    political and economic instability.

ANY ACQUISITIONS THAT WE UNDERTAKE COULD BE DIFFICULT TO INTEGRATE, DISRUPT OUR
BUSINESS, DILUTE STOCKHOLDER VALUE AND HARM OUR OPERATING RESULTS

         We may acquire or make investments in complementary businesses,
         technologies, services or products if appropriate opportunities arise.
         For example, in December 1998, we acquired Benelytics, Inc., a
         developer of employee health benefits selection and management software
         and reference data products. The process of integrating any acquired
         business, technology, service or product into our business and
         operations may result in unforeseen operating difficulties and
         expenditures. Integration of an acquired company also may consume much
         of our management's time and attention that would otherwise be
         available for ongoing development of our business. Moreover, the
         anticipated benefits of any acquisition may not be realized. We may be
         unable to identify, negotiate or finance future acquisitions
         successfully, or to integrate successfully any acquisitions with our
         current

                                       24
<PAGE>

         business. Future acquisitions could result in potentially dilutive
         issuances of equity securities or the incurrence of debt, contingent
         liabilities or amortization expenses related to goodwill and other
         intangible assets, any of which could harm our business. For example,
         in connection with the Benelytics acquisition, we recorded $7.3 million
         in goodwill, which will be amortized over a period of three years, and
         $1.4 million to software and other intangible assets, which will be
         amortized over two years.

WE MAY BE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS

         We regard our intellectual property as critical to our success. We rely
         on trademark, copyright and trade secret laws to protect our
         proprietary rights. We have registered the INSWEB mark in the United
         States, France, Germany, South Korea and the United Kingdom and
         applications are pending in several other countries. Other United
         States and worldwide trademark applications include, but are not
         limited to, eAgent, InsWeb.com, Powered by InsWeb, and Where You and
         Your Insurance Really Click. We have patent applications on file in the
         United States. Our trademark registration and patent applications may
         not be approved or granted, or, if granted, may be successfully
         challenged by others or invalidated through administrative process or
         litigation. Notwithstanding these laws, we may be unsuccessful in
         protecting our intellectual property rights or in obtaining patents or
         registered trademarks for which we apply.

WE MAY BE SUBJECT TO CLAIMS FOR INFRINGEMENT OF INTELLECTUAL PROPERTY, WITH OR
WITHOUT MERIT, WHICH COULD BE COSTLY TO DEFEND OR SETTLE

         We may from time to time be subject to claims of infringement of other
         parties' proprietary rights or claims that our own trademarks, patents
         or other intellectual property rights are invalid. We have been and are
         currently subject to infringement claims in the ordinary course of
         business, including claims of alleged infringement of the patent and
         trademark rights of third parties by us and companies with which we
         have business relationships. Any claims of this type, with or without
         merit, could be time-consuming to defend, result in costly litigation,
         divert management attention and resources or require us to enter into
         royalty or license agreements. License agreements may not be available
         on reasonable terms, if at all, and the assertion or prosecution of any
         infringement claims could significantly harm our business.

WE INCORPORATE THIRD-PARTY TECHNOLOGIES AND SERVICES INTO OUR ONLINE
MARKETPLACE, AND IF THE PROVIDERS OF THESE TECHNOLOGIES AND SERVICES FAIL IN A
TIMELY MANNER TO DEVELOP, LICENSE OR SUPPORT TECHNOLOGY NECESSARY TO OUR
SERVICES, MARKET ACCEPTANCE OF OUR ONLINE MARKETPLACE COULD BE HARMED

         We have incorporated technology developed by third parties into our
         online marketplace, and we will continue to incorporate third-party
         technology in our future products and services. We have limited control
         over whether or when these third-party technologies will be developed
         or enhanced. If a third-party fails to timely develop, license or
         support technology necessary to our services, market acceptance of our
         online marketplace could be harmed.

OUR STOCK PRICE MAY FLUCTUATE WIDELY, AND INTERNET STOCKS IN GENERAL HAVE BEEN
EXTREMELY VOLATILE

         The trading price of our common stock has been highly volatile and may
         be significantly affected by factors including actual or anticipated
         fluctuations in our operating results, new products or new contracts by
         us or our competitors, loss of key customers, conditions and trends in
         the electronic commerce and insurance industries, changes in financial
         estimates by securities analysts, general market conditions and other
         factors. The trading prices of many Internet stocks have experienced
         extreme price and volume fluctuations. These fluctuations often have
         been unrelated or disproportionate to the operating performance of
         these companies. These fluctuations may continue and could harm our
         stock price. Any negative change in the public's perception of the
         prospects of Internet or electronic commerce companies could also
         depress our stock price regardless of our results.

DELAWARE LAW AND OUR CHARTER DOCUMENTS CONTAIN PROVISIONS THAT COULD DISCOURAGE
OR PREVENT A POTENTIAL TAKEOVER, EVEN IF SUCH A TRANSACTION WOULD BE BENEFICIAL
TO OUR STOCKHOLDERS

         Provisions of Delaware law and our certificate of incorporation and
         bylaws could make more difficult the acquisition of us by means of a
         tender offer, a proxy contest, or otherwise, and the removal of
         incumbent officers and directors.


                                       25
<PAGE>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         InsWeb is exposed to financial market risks including changes in
         interest rates and, to a lesser degree, foreign currency exchange
         rates. The fair value of InsWeb's investment portfolio or related
         income would not be significantly affected by either a 10% increase or
         decrease in interest rates due mainly to the short term nature of the
         major portion of InsWeb's investment portfolio. InsWeb's interest
         income is sensitive to changes in the general level of U.S. interest
         rates, particularly since the majority of our funds are invested in
         instruments with maturities less than one year, except for certain U.S.
         agency securities which are designated to support our letter of credit
         whose maturity is two years. InsWeb's policy is to limit the risk of
         principal loss and ensure the safety of invested funds by limiting
         market and credit risk. Funds in excess of current operating
         requirements are invested in obligations of the U.S. government and its
         agencies and investment grade obligations of state and local
         governments and large corporations.

         The table below represents carrying amounts and related
         weighted-average interest rates by year of maturity of InsWeb's
         investment portfolio at March 31, 2000:

<TABLE>
<CAPTION>
                                                                              2000        2001        TOTAL
                                                                              ----        ----        -----
<S>                                                                          <C>          <C>         <C>
(In thousands, except interest rates)
Cash and money market funds                                                  $14,423          --      $14,423
Average interest rate                                                           4.7%          --         4.7%
Investments                                                                  $57,836      $8,980      $66,816
Average interest rate                                                           6.0%        7.0%         6.1%
Total investment securities                                                  $72,259      $8,980      $81,239
         Average interest rate                                                  5.0%        7.0%         5.9%
</TABLE>


         InsWeb's revenue and capital spending is transacted in U.S. dollars. As
         discussed in the notes to the consolidated financial statements, InsWeb
         investment in InsWeb Japan K.K. and the note payable to strategic
         partner and shareholder is denominated in Japanese Yen. InsWeb has not
         engaged in hedging transactions to reduce its exposure to fluctuations
         that may arise from changes in foreign exchange rates. Based on
         InsWeb's overall currency rate exposure at March 31, 2000 a near-term
         10% appreciation or depreciation would have an immaterial affect on
         InsWeb's operating results or financial condition.


                                       26
<PAGE>

PART II: OTHER INFORMATION


Item 6. Exhibits and Reports on Form 8-K.


   (a)      EXHIBITS
            --------

          27.1         Financial Data Schedule

   (b) Reports on Form 8-K

       Current Report dated May 3, 2000 regarding the announcement of first
       quarter results and loss of State Farm as a customer.

       Current Report dated March 1, 2000 regarding the resignation of Stephen
       Robertson, Chief Financial Officer


                                       27
<PAGE>

                               INSWEB CORPORATION
                                  (REGISTRANT)



         Dated: May 15, 2000                     /s/ Mark P. Guthrie
                                                 ------------------------
                                                 Mark P. Guthrie
                                                 Executive Vice President, Chief
                                                 Operating Officer and Chief
                                                 Financial Officer (acting)


                                       28
<PAGE>

                                  EXHIBIT INDEX

   EXHIBIT
   -------

27.1           Financial Data Schedule


                                       29