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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC. 20549
                               ------------------
                                    FORM 10-K
(MARK ONE)

/X/  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(D) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 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                     (I.R.S. Employer
       Incorporation or organization)                    Identification No.)

                 11290 PYRITES WAY, GOLD RIVER, CALIFORNIA 95670
                    (Address of principal executive offices)

                                 (916) 853-3300
              (Registrant's telephone number, including area code)
                               ------------------

           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

TITLE OF EACH CLASS                         NAME OF EXCHANGE ON WHICH REGISTERED
        NONE                                                NONE
           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

                         COMMON STOCK, $0.001 PAR VALUE
                                (Title of Class)
                               ------------------

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities 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 / /

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/

     The aggregate  market value of  registrant's  voting and non-voting  common
equity held by nonaffiliates of registrant, based upon the closing sale price of
the common stock on March 21, 2001, as reported on the Nasdaq  National  Market,
was  approximately  $25,225,006.  Shares of common  stock held by each  officer,
director  and  holder of 5% or more of the  outstanding  common  stock have been
excluded in that such persons may be deemed to be affiliates. This determination
of affiliate  status is not  necessarily  a conclusive  determination  for other
purposes.

     Outstanding  shares of registrant's  common stock,  $0.001 par value, as of
March 21, 2001: 42,326,482.

                       DOCUMENTS INCORPORATED BY REFERENCE

     Parts of the  definitive  Proxy  Statement  for  registrant's  2001  Annual
Meeting of Stockholders  to be filed with the Commission  pursuant to Regulation
14A not later  than 120 days after the end of the  fiscal  year  covered by this
Report are incorporated by reference into Part III of this Form 10-K Report.

<PAGE>

                                     PART I

     THIS  REPORT  INCLUDES  A  NUMBER  OF  FORWARD-LOOKING   STATEMENTS.   SUCH
STATEMENTS  REFLECT  OUR  CURRENT  VIEWS WITH  RESPECT TO FUTURE  EVENTS AND OUR
POTENTIAL FINANCIAL  PERFORMANCE AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT
COULD CAUSE OUR ACTUAL RESULTS AND FINANCIAL  POSITION TO DIFFER MATERIALLY FROM
WHAT WE SAY IN THIS REPORT.  THESE FACTORS INCLUDE,  BUT ARE NOT LIMITED TO, OUR
ABILITY TO GENERATE SIGNIFICANT REVENUES FROM OUR CORE BUSINESS;  OUR ABILITY TO
ACHIEVE OR MAINTAIN  PROFITABILITY;  OUR RELIANCE ON AUTOMOBILE  INSURANCE;  OUR
ABILITY TO EXPAND OUR OPERATIONS;  OUR RELIANCE ON A LIMITED NUMBER OF INSURANCE
COMPANIES FOR OUR CURRENT REVENUES;  AND THE SUCCESS OF OUR ONLINE RELATIONSHIPS
IN  ATTRACTING  CONSUMERS TO OUR WEBSITE.  WE MORE FULLY DISCUSS THESE AND OTHER
RISK  FACTORS IN "ITEM  7--MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL
CONDITION AND OPERATING RESULTS--FACTORS THAT MAY AFFECT OUR FUTURE PERFORMANCE"
AND ELSEWHERE IN THIS REPORT AND IN OUR OTHER FILINGS WITH THE SEC.

ITEM 1.  BUSINESS

THE INSWEB ONLINE INSURANCE MARKETPLACE

     InsWeb operates a leading online insurance marketplace that enables
consumers to comparison shop online and obtain insurance company-sponsored
quotes for a variety of products, including automobile, term life and
homeowners insurance, as well as annuities. InsWeb's marketplace capitalizes
upon the advantages of the Internet to electronically match consumers and
insurance companies, providing consumers with the insurance they need and
insurance companies with the customers they want. InsWeb has combined
extensive knowledge  of the insurance industry, technological expertise and
close relationships with a significant number of insurance companies to
develop a sophisticated, integrated online marketplace. InsWeb's marketplace
enables consumers to efficiently research insurance-related topics, search
for, analyze and compare insurance products, apply for and receive insurance
company-sponsored quotes for actual coverage and to purchase coverage through
InsWeb's insurance agency. In addition, InsWeb provides insurance companies
with pre-qualified consumers at substantially lower acquisition costs, as
well as the scalable, cost-efficient distribution capabilities of InsWeb's
Internet-based model.

     THE QUOTE GENERATION AND PURCHASE PROCESS

     The quote generation and purchase process involves the following steps:

     -    data entry by the consumer;

     -    electronic underwriting;

     -    electronic rating and generation of price quotes;

     -    presentation of quotes to the consumer;

     -    delivery of leads to InsWeb's agency and/or a participating  insurance
          company; and

     -    purchase of the insurance policy.

     Quotes obtained through the online marketplace are free to consumers, while
participating insurance companies pay transaction fees to InsWeb generally based
on the  delivery  of  qualified  leads,  or a  commission  from  the  sale of an
insurance policy through InsWeb's insurance agency,  InsWeb Insurance  Services,
Inc.

    DATA ENTRY. To initiate a shopping session,  a consumer  completes an online
form that requests  information such as the consumer's age, address and coverage
requirements,  a process  that InsWeb  estimates  takes  approximately  10 to 25
minutes,  depending on the type of insurance  sought and the  complexity  of the
consumer's  profile.  The quote form captures a comprehensive set of information
designed to address each of the participating  insurance companies' underwriting
and rating  criteria.  To assist  consumers in evaluating and  fulfilling  their
insurance  needs,  InsWeb  provides  consumers a variety of interactive  website
features and insurance-related  information. In addition, InsWeb provides online
help and customer  service  throughout the data entry  process.  The consumer is
required to complete only one form to obtain quotes for a


                                     -2-
<PAGE>

particular type of insurance from those  participating  companies  offering that
type of insurance in the  consumer's  state who have  qualified  that  consumer.
Throughout  the data entry  process,  consumers are presented with the option of
saving  their data into their  personal  insurance  profile.  Consumers  who are
returning  to the  online  marketplace  can  simply  enter  their  user name and
password to retrieve  information  they entered  during  previous  visits.  This
information can be used to automatically complete portions of the quote form for
other insurance  products.  Because the information  insurance  companies use to
underwrite,  rate and provide  quotes to a consumer  is entered  directly by the
consumer, the insurance companies can reduce or eliminate the expense associated
with  collecting  consumer  data.  Moreover,  information  entered  directly  by
consumers typically contains fewer errors than information provided orally to an
agent or insurance company representative,  who must then enter that information
manually into the insurance company's system.

    UNDERWRITING.  InsWeb's  software  uses  criteria set by each  participating
insurance  company to analyze a consumer's  data and  determine  whether it fits
within the  insurance  company's  targeted  risk  profile.  InsWeb's  system can
provide  rapid  feedback  to an  insurance  company  regarding  the impact  that
particular  criteria  are having on the number of leads  being  directed to that
company,  and also  permits  individual  criteria to be easily added or removed.
Electronic  underwriting  eliminates  the expense of screening and quoting risks
that an  insurance  company  ultimately  may  not  want  to  accept.  Electronic
underwriting  also ensures that  consumers are only  presented  with quotes from
companies who are interested in doing business with them.

    RATING.  InsWeb  integrates each of its participating  insurance  companies'
rating  criteria  into its online  marketplace  through  one of  several  rating
solutions, depending on InsWeb's preference. These solutions include:

     -    a  customized  interface  between  InsWeb's  site  and  the  insurance
          company's own rating engine;

     -    an interface between InsWeb's site and a third-party rating engine; or

     -    an integration of the insurance  company's rating criteria into one of
          InsWeb's proprietary rating engines.

In  each  case,  the  rating  process  is  developed  in  conjunction  with  the
participating insurance company.

    PRESENTATION  OF  QUOTES.  After a  consumer  has  completed  the form for a
particular  product and has requested  quotes,  the consumer is presented with a
"quote pad." The quote pad contains the logos of insurance companies  interested
in providing  quotes,  along with prices for the  insurance  companies  offering
instant  quotes.  The  quote  pad also  informs  the  consumer  which  insurance
companies  will provide quotes on a delayed  basis,  either via e-mail,  mail or
telephone.  The response method varies among  insurance  products and companies.
Currently,  all term life and the  majority of  automobile  quotes are  provided
through  instant  quotes.  InsWeb is working  with its  participating  insurance
companies to increase implementation of instant quoting capability.

    DELIVERY  OF  LEADS.   InsWeb's   participating   insurance   companies  pay
transaction  fees to InsWeb  generally based on the delivery of qualified leads,
or a commission  from the sale of an insurance  policy through InsWeb  Insurance
Services.  Qualified  leads are produced in two ways:  for  insurance  companies
providing  instant online  quotes,  a qualified lead is produced when a consumer
clicks to request  insurance  coverage based on a specific quote;  for insurance
companies providing e-mail or other offline quotes, a qualified lead is produced
when a consumer  clicks to request the quote itself.  In either case,  InsWeb is
paid a transaction fee whether or not the consumer actually  purchases a policy.
Once a lead is generated by the consumer's request for an application or offline
quote, InsWeb transmits the lead either to InsWeb Insurance Services,  or to the
selected insurance company by e-mail,  file transfer or direct connection to the
insurance  company's  information  system.  InsWeb  provides each  participating
insurance company with  custom-formatted lead information based on the insurance
companies individual requirements.

    PURCHASE OF POLICY.  After InsWeb  generates and delivers a qualified  lead,
insurance companies,  or InsWeb Insurance Services,  may respond directly to the
interested  consumer by e-mail,  mail or  telephone to close the purchase of the
policy or direct the lead to an agent for follow-up. The delivery of a qualified
lead to the insurance  company does not require  further  involvement by InsWeb,
although InsWeb monitors  insurance  company  responses and works with companies
and agents to ensure that they are responding to leads generated from the online
insurance marketplace in a timely fashion. In addition,  InsWeb performs closing
services, through InsWeb Insurance Services, in both a traditional agency and an
online setting, for


                                     -3-
<PAGE>

some participating insurance companies.  These closing services include advising
consumers about coverage options,  confirming consumer information,  selling the
policy and taking a premium  deposit.  In either case, the ongoing  servicing of
the  insurance  policy,  after it has been sold,  is generally  performed by the
insurance company. As of December 31, 2000, InsWeb Insurance Services is closing
business on behalf of eight auto insurance carriers in four western states.

    CUSTOMER CARE. InsWeb provides  assistance to consumers  throughout the data
entry,  quote-generation,  delivery and purchase  process through  embedded help
icons,  which link to  explanations  of the  various  steps in the  process  and
through e-mail support.  InsWeb's Customer Care Center provides  additional help
to  consumers  working  through  the process of shopping  for  insurance  online
through real-time chat and live telephone support.

     PRODUCTS AND SERVICES

     Insurance companies  participating in InsWeb's online insurance marketplace
offer automobile, term life, homeowners,  renters,  condominium,  home warranty,
motorcycle and pet insurance as well as variable annuities.

    AUTOMOBILE INSURANCE.  Automobile insurance comprises the largest segment of
the consumer  insurance  market,  and, to date,  has  accounted  for most of the
consumer traffic on InsWeb's online marketplace,  and a substantial  majority of
its revenues.  At March 21, 2000,  InsWeb's online  marketplace offers quotes to
qualified  consumers in 49 states plus the District of Columbia.  The  following
table  shows,  as of March  21,  2001,  the  percentage  of the U.S.  population
residing  in states  where at least two  companies  offer  automobile  insurance
quotes on the InsWeb online marketplace:

<TABLE>
<CAPTION>

NUMBER OF COMPANIES          NUMBER OF STATES  PERCENTAGE OF U.S. POPULATION
OFFERING AUTO QUOTES                               RESIDING IN STATES AND
                                                    JURISDICTIONS COVERED
<S>                            <C>                        <C>
2 or more .................    43 plus D.C.               90.9 %
3 or more .................    33 plus D.C.               85.1 %
4 or more .................    26 plus D.C.               77.6 %
5 or more .................    20 plus D.C.               68.9 %
</TABLE>

     For the year ended December 31, 2000,  the national  average for actionable
insurance  quotes  received  by  consumers   participating  in  InsWeb's  online
marketplace  was 2.5,  of which  1.4 were  instant  quotes.  For the year  ended
December 31, 2000,  California  residents  received an average of 6.3 actionable
insurance quotes, of which 5.1 were presented instantly.

     TERM  LIFE  INSURANCE.  The  InsWeb  online  marketplace  currently  offers
comparative  quotes for term life  insurance  from six or more  companies  in 49
states plus D.C. The following table shows, as of March 31, 2001, the percentage
of the U.S.  population  residing in states where at least six  companies  offer
term life insurance quotes on the InsWeb online marketplace:

<TABLE>
<CAPTION>

NUMBER OF COMPANIES         NUMBER OF STATES         PERCENTAGE OF U.S. POPULATION
OFFERING TERM LIFE QUOTES                                RESIDING IN STATES AND
                                                          JURISDICTIONS COVERED
<S>                                        <C>                    <C>
6 or more ..............................   44 plus D.C.           97.9 %
7 or more ..............................   41 plus D.C.           96.8 %
8 or more ..............................   39 plus D.C.           89.6 %

</TABLE>

    HOMEOWNERS/RENTERS/CONDOMINIUM  INSURANCE.  As of March 21, 2001, the InsWeb
online  marketplace  offered  quotes for  homeowners,  renters  and  condominium
insurance  from  at  least  one  insurance  company  in  16  states  plus  D.C.,
representing 48.5% of the population.


                                     -4-
<PAGE>

    VARIABLE ANNUITIES.  InsWeb began offering quotes for the variable annuities
product in December 2000. A variable  annuity is a contract whereby an insurance
company  agrees to pay income to the  purchaser in the future.  The value of the
annuity  and  the  amount  of  the  income,  however,  will  vary  based  on the
performance  of underlying  investments  in specific  subaccounts  chosen by the
purchaser.  As of March 21, 2001,  there are two  insurance  companies  offering
quotes in  InsWeb's  variable  annuity  marketplace.  InsWeb  expects  that this
product offering will continue to grow throughout 2001.

     INDIVIDUAL  HEALTH  INSURANCE.  InsWeb  began  offering  individual  health
insurance  quotes in August 1998.  Individual  health  insurance  was  initially
offered in the form of preferred provider organization plans, health maintenance
organization  plans and  traditional  indemnity  plans.  In April  2000,  InsWeb
entered into a two-year linking agreement with eHealthInsurance.com  under which
InsWeb customers access a co-branded  version of  eHealthInsurance's  individual
health, small group health, and Medicare supplement insurance product offerings.
As a result,  InsWeb re-evaluated the cost to develop and market its health care
product offerings and decided to discontinue its health care initiatives,  which
were primarily  being carried out through the business and assets  acquired as a
result of InsWeb's acquisition of Benelytics, Inc. in 1998. As described in Note
19  of  the  Consolidated   Financial  Statements,   in  February  2001,  InsWeb
temporarily suspended its online health insurance quoting due to the decision by
eHealthInsurance  to  unilaterally  terminate  the  relationship.  Additionally,
eHealthInsurance  has filed suit in U.S.  District Court against InsWeb alleging
InsWeb's  failure to perform its obligations  under the linking  agreement.  See
Item 3, Legal Proceedings.

     OTHER PRODUCTS AND SERVICES.  InsWeb's online  marketplace allows consumers
to shop for home  warranty,  motorcycle  and pet  insurance in some  states.  At
present,  the InsWeb  online  marketplace  does not offer  multiple  quotes with
respect to these types of  insurance,  which are  offered by a single  insurance
company  for each  product  in the  states  in which it is  available.  InsWeb's
long-term  strategy is to expand the range of  insurance  products  and services
offered  through its online  insurance  marketplace.  From time to time,  InsWeb
licenses  its  insurance  quoting   functionality  to  insurance  companies  and
financial institutions on a selected basis.

    NON-U.S.  MARKETS.  In 1998,  InsWeb entered into a joint venture  agreement
with  SOFTBANK  Corp.  to  develop,  implement  and  market an online  insurance
marketplace in Japan and the Republic of Korea. The joint venture is carried out
exclusively through InsWeb Japan K.K., a Japanese  corporation,  in which InsWeb
owns a 25% interest.  The parties to the joint  venture  agreement are currently
negotiating a possible restructuring of InsWeb Japan K.K. The restructuring,  if
completed,  would create a holding company which would control InsWeb Japan K.K.
and other companies in which InsWeb does not have a financial interest. InsWeb's
shares in  InsWeb  Japan  K.K.  would be  exchanged  for  shares in the  holding
company.  In conjunction with the joint venture  agreement,  InsWeb also entered
into an agreement in August 1999 to provide  consulting and hosting  services to
assist  InsWeb  Japan K.K. in  developing  its  Internet  strategy.  Though this
agreement  has not  been  terminated,  and  would  continue  in the  event  of a
restructuring,  InsWeb does not expect to provide future  consulting and hosting
services to InsWeb Japan K.K.

     INSURANCE COMPANY RELATIONSHIPS

     InsWeb believes that establishing  long-term  relationships  with reputable
insurance  companies is essential to its ability to offer a desirable  insurance
marketplace on its website. InsWeb's focus is to maintain and expand the product
offerings  available on the online  marketplace by selling InsWeb's  services to
new companies and expanding InsWeb's  relationship with participating  insurance
companies.

     Once an  insurance  company  decides  to  participate  in  InsWeb's  online
insurance  marketplace,  InsWeb's  implementation  team works with the insurance
company to integrate its insurance product information,  which entails a process
of specification development, education, planning and activation. Because of the
complexity of interfacing with an insurance  company's legacy computer  systems,
the  implementation  team  conducts  a  thorough  assessment  of  the  insurance
company's business  processes,  technical  capabilities and desired interface to
develop a comprehensive  integration plan.  Although the implementation  process
can be costly and  time-consuming  for both  InsWeb and the  insurance  company,
InsWeb  believes that it  represents a  significant  commitment by the insurance
company, and that the insurance company typically views this expenditure of time
and resources as an investment in a long-term  relationship with InsWeb. Once an
insurance  company's initial  implementation is complete,  InsWeb works with the
carrier to expand its geographic coverage and add insurance products.


                                     -5-
<PAGE>

         As of March  31,  2001,  InsWeb  had  relationships  with 36  insurance
companies,  including  many large  companies with  established  brand names that
InsWeb believes are attractive to consumers. These companies include:

<TABLE>
<CAPTION>

                                                      INSURANCE COMPANIES
TYPE OF INSURANCE

<S>                         <C>                          <C>
Automobile................. AAA Michigan                 Hartford
                            AIG                          Infinity
                            American Family              Kemper Auto & Home
                            Amica Mutual                 Meridian
                            Allstate                     National Merit
                            CSE Insurance Group          New York Central Mutual
                            Electric Insurance           Progressive
                            Explorer                     Permanent General
                            Financial Indemnity          Travelers
                            GE Financial Assurance       Tri-State
                            GMAC Integon
Term Life.................. Allstate Life                North American
                            Amica Life                   Ohio National
                            CNA                          Old Republic Life
                            GE Financial Assurance       Prudential Life
                            John Hancock                 Sun Life
                            Midland Life                 Western Southern
                            MONY Life Insurance Company  Zurich Kemper
                            Northwestern Mutual Life
Homeowners/Renters/Condo... American Family              Tri-State
                            Homesite
Home Warranty.............. Cross Country
Annuities.................. American Skandia             Western Southern
</TABLE>

     To date,  InsWeb  has been  dependent  on a  limited  number  of  insurance
companies for a significant portion of its revenues. Revenues from the top three
carriers that participate in InsWeb's  marketplace  represented 34%, 53% and 64%
for the  years  ended  December  31,  2000,  1999 and  1998,  respectively.  See
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations."


     INTERACTIVE WEBSITE FEATURES AND INFORMATION

     To assist  consumers in evaluating and fulfilling  their  insurance  needs,
InsWeb  provides  consumers with a variety of interactive  website  features and
insurance-related information, including:

     -    tools to help consumers estimate their coverage  requirements for auto
          and term life insurance;

     -    research  capabilities to help consumers review the financial strength
          of insurance companies nationwide;

     -    frequently asked questions on insurance;

     -    articles on a wide variety of insurance and personal finance topics;

     -    glossaries of insurance-related terms; and

     -    on-line chat, email and 800 phone service.


                                     -6-
<PAGE>

MARKETING AND SALES

     InsWeb's  marketing  program  consists  of  a  two-pronged   effort,   with
substantial  resources directed both at attracting increased consumer traffic to
the InsWeb website, and building and expanding  relationships with participating
insurance  companies.  InsWeb  believes that  increased  traffic will  encourage
insurance  companies to develop and expand their  relationship with InsWeb,  and
that  enhancing  the  comparative  shopping   opportunities   available  through
increased  insurance  company  participation  will drive  further  increases  in
consumer traffic.

     CONSUMER MARKETING

     InsWeb's consumer  marketing program seeks to increase consumer traffic and
brand awareness through the establishment of relationships with online companies
as well as through direct offline and online consumer marketing.

     ONLINE RELATIONSHIPS.  InsWeb believes that relationships with high-profile
online  companies can drive  significant  traffic to its site.  InsWeb seeks out
relationships  with companies whose websites feature a high volume of traffic or
a substantive focus that is related to the purchase of insurance coverage,  such
as sites related to automobiles or homes. Agreements with these online companies
typically  provide that InsWeb and the online  company  will share  revenue from
transaction fees generated through the relationship,  and some require InsWeb to
also pay a fixed fee to the online  company.  Online  companies  integrate links
into  their  websites  connecting  to  InsWeb's  marketplace.   InsWeb  provides
functionality  to further  integrate  with online  companies and, in some cases,
provides  co-branding   functionality  whereby  the  online  company's  logo  is
presented  on the InsWeb  marketplace  to those  consumers  directed to InsWeb's
marketplace from a company's site. For some of InsWeb's more significant  online
relationships, including Yahoo!, InsWeb has further integrated its functionality
with  these  companies'  sites by  customizing  the  look  and feel of  InsWeb's
insurance-related    content   and   marketplace   to   replicate   the   design
characteristics  of the  online  company's  site.  Additionally,  some of  these
companies have developed customized  interfaces on their own site to link to the
InsWeb  marketplace.  InsWeb's agreements with online companies typically have a
12 to 24 month term, with either party having a right to terminate the agreement
on 30 to 90 days' notice. Notwithstanding the foregoing, the integration process
requires a significant  investment of the online  company's  time and resources,
which InsWeb believes motivates the partner to maintain a long-term relationship
with InsWeb.

     InsWeb and Yahoo!  have entered into an agreement  pursuant to which Yahoo!
offers a co-branded  version of the InsWeb online  insurance  marketplace on the
Yahoo!  website.  The agreement provides for InsWeb to be the exclusive provider
of online  insurance  quotation  services  on the  Yahoo!  site for  automobile,
homeowners and term life  insurance.  Under the agreement,  InsWeb has agreed to
pay to Yahoo!  fixed fees,  plus a portion of the associated  revenues  provided
that certain  minimum  quarterly  targets are met, for each user delivered to an
InsWeb  quote form from the  co-branded  site.  This  agreement  was  renewed in
September 2000 for a period of one year.

     In December 1999,  InsWeb and Microsoft  entered into a two-year  agreement
pursuant to which  Microsoft's MSN Insurance Center on MSN  MoneyCentral  offers
co-branded  comparative  shopping  services  provided by InsWeb.  The  agreement
provides for InsWeb to be the exclusive  provider of online insurance  quotation
services on the MSN Insurance Center. Under the agreement,  InsWeb has agreed to
pay to MSN fixed fees for certain traffic  guarantees,  plus a fee for each user
delivered to an InsWeb quote form from the co-branded  site in excess of certain
minimums.

     In  February  2000,  InsWeb and  America  On-line  entered  into a two-year
agreement  pursuant to which America  Online offers a co-branded  version of the
InsWeb online insurance  marketplace across the Netscape  Netcenter,  Compuserve
and Digital City websites. The agreement provides for InsWeb to be the exclusive
provider of online  insurance  quotation  services on the  Netscape  website and
premier  insurance  comparison-shopping  aggregator  of insurance  offerings for
Compuserve and Digital City.  Under the  agreement,  InsWeb has agreed to pay to
AOL fixed fees for certain  impression  targets plus a fee for each clickthrough
over a cumulative  minimum  threshold.  In February 2001, InsWeb and AOL amended
the  original  contract  to  adjust  the  amount  of  fixed  fees  and  targeted
impressions for the remainder of the original term of the contract.  As a result
of this  amendment,  effective  November  1, 2001,  InsWeb will no longer be the
exclusive provider of online insurance  quotations on Netscape,  and rather will
become a preferred provider of these services.

     In January  2001,  InsWeb  acquired  from Intuit Inc.,  certain  assets and
related liabilities  associated with an online insurance shopping and purchasing
service operated by Intuit Insurance  Services,  Inc., a wholly owned subsidiary
of


                                     -7-
<PAGE>


Intuit.  In connection  with the  acquisition,  InsWeb and Intuit entered into a
license and distribution agreement,  under which, Intuit and InsWeb have granted
one another licenses to create links between their respective  websites in order
to create  and  operate a  co-branded  insurance  center.  This  agreement  also
provides  that  InsWeb  will be the  exclusive  aggregator  of  online  consumer
insurance  services for  Quicken.com,  an Intuit  website,  and that Intuit will
share in the  associated  revenues.  This agreement has been entered into for an
initial term of five years.

    TRADITIONAL  CONSUMER  MARKETING.  As part of its  branding  effort,  InsWeb
developed  a  consumer  marketing  campaign,  which  began  in 1998  with  radio
advertising  in selected  metropolitan  markets,  which was  expanded in 1999 to
include national television and syndicated radio advertising.  In the first half
of 2000,  InsWeb changed its marketing focus to emphasize more online  marketing
efforts and eliminated the radio and television marketing campaigns.

    ONLINE   DIRECT-RESPONSE   ADVERTISING.   InsWeb's  online   direct-response
advertising  is  intended  to create a  presence  for  InsWeb on a wide range of
websites  whose  audiences  closely  match its  target  audience.  InsWeb's  key
advertisements are delivered through content sponsorships,  banners and keywords
on financial, news, real estate, classifieds,  automobile, directory and general
interest sites. InsWeb's  advertisements are targeted primarily to consumers who
are actively seeking insurance.

TECHNOLOGY

     ARCHITECTURE AND INTERFACES

     Since its inception,  InsWeb has invested significant  resources to develop
and deploy its proprietary  technology platform that InsWeb believes constitutes
a significant competitive advantage.

     InsWeb's software architecture facilitates  interoperability among software
components  to  maximize  responsiveness,   flexibility  and  reliability.  This
architecture  enables  InsWeb to  efficiently  develop and deploy new  insurance
company-specific  modules for  underwriting,  rating and data delivery.  It also
simplifies the process of providing InsWeb's core marketplace  functionality for
use on  insurance  company  sites.  In order to  speed  implementation  for each
participating  insurance  company,  InsWeb has developed  transmission  software
components which allow consumer data to be custom-formatted for delivery to each
insurance company based on the requirements of the insurance  company's computer
system.  InsWeb has developed custom communication  software to provide multiple
types  of  real-time  telecommunication  links  to its  participating  insurance
companies.  These  components  provide a variety of solutions  to the  insurance
companies  to best meet their needs and  interface  with their  legacy  systems.
InsWeb has devoted  significant time and resources to maximize the efficiency of
integrating new insurance  companies into its online marketplace and to create a
flexible,  customizable  Web  interface.  InsWeb's  front-end  user interface is
accessible  to consumers  via  standard  Web  browsers  and is designed  without
unnecessary graphics that would increase download time.

     InsWeb's server software  operates on servers running the Microsoft Windows
NT operating  system.  The software is designed  for a  high-volume  transaction
processing   environment,   with  a  focus  on   reliability,   redundancy   and
around-the-clock  availability.  It is  designed to enable the system to respond
rapidly and to simultaneously  underwrite and rate a consumer's  profile against
all participating  insurance companies' criteria.  The software is also designed
for  scalability,  enabling  InsWeb to expand  processing  capacity  through the
addition of more processors and servers as transaction volumes increase.

     InsWeb  has  also  integrated  and  plans to  further  develop  systems  to
facilitate  incoming  consumers  though  InsWeb's  Customer  Care Center and the
processing  of  leads  and  sale  of  insurance   policies  through  its  agency
operations.  InsWeb's  agency  technology  systems use a combination  of our own
proprietary technologies and commercially available, licensed technologies. This
includes an array of proprietary  advanced  telephony and network tools in order
to manage leads delivered from InsWeb's  marketplace and online chat,  email and
phone calls  received  in the  customer  service  center.  InsWeb's  proprietary
automated  customer  management  system has been  developed to  communicate  and
process data with InsWeb marketplace,  outside rating services,  credit bureaus,
third-party  data  providers,  and an online credit card  processing  company to
facilitate the sale of an insurance policy to a consumer. Once a policy is sold,
data is entered  onto an agency  management  system,  where  upload and download
interfaces  between its agency management system and various carrier back office
systems have been developed to streamline the proper  fulfillment  and servicing
of sold policies.


                                     -8-
<PAGE>

     SECURITY

     InsWeb  employs  third-party  firewall  technology to protect its corporate
network from intrusion and uses proprietary designs to isolate confidential data
on its network so that only selected  information  is publicly  available on its
website.  Consumer  information  is  transmitted  to InsWeb's  site using Secure
Socket Layer  encryption  technology,  a widely used technology for transmitting
encoded  data via a Web  browser.  InsWeb  employs a number of other  encryption
methods for  delivery of consumer  information  to insurance  companies.  InsWeb
protects its system  management  functions using security models integrated with
the  operating  system.  Additionally,   some  sensitive  software  applications
incorporate proprietary authentication schemes.

     SITE OPERATIONS

     InsWeb's hardware servers, storage systems,  Internet connections,  back-up
strategies  and network are designed to allow its online  marketplace to operate
continuously. InsWeb's main Web servers are located at its headquarters facility
in Gold River, California.  InsWeb uses multiple service providers to access the
Internet over multiple  dedicated  communication  lines.  InsWeb uses a separate
server to operate the software for each primary insurance product, as well as at
least one  redundant  server  for each  core  product.  InsWeb  uses a number of
internally-developed   and   third-party   software   products  to  monitor  the
performance  and   availability  of  its  website  and  core  products.   InsWeb
continuously monitors consumer traffic,  response times and capacity to ensure a
high quality of service for consumers and insurance companies.  InsWeb maintains
a back-up facility in Irvine,  California through a third-party service provider
to ensure  the  continuous  operation  of its  online  marketplace  in case of a
failure at its main facility.

PRODUCT DEVELOPMENT

     InsWeb  devotes  significant  resources to improving  the  structure of its
products  and  delivering  additional  tools that allow  insurance  companies to
effectively reach consumers.  InsWeb generally follows a semi-quarterly  release
schedule for new versions of its online user  interface,  which may  incorporate
technology   advances,   new  product  features  and  improvements  in  consumer
interactivity.  InsWeb also devotes  resources  to refining its online  consumer
tools and research materials, as well as developing new support products. InsWeb
is also  researching  new methods of  designing  more  useful  insurance-related
material and presenting it to the consumer in a more meaningful context.

     InsWeb's product  development  expenses were approximately $10.1 million in
1998,  $8.9  million  in 1999 and $8.7  million  in  2000.  Product  development
expenses in 1998  included  approximately  $5.5  million of  purchased  software
licenses  that were  expensed  due to InsWeb's  decision  not to  integrate  the
software into its products.

PRIVACY POLICY

     InsWeb believes that the privacy of personally identifiable  information of
Internet users is becoming increasingly important as the use of the Internet for
electronic  commerce  continues to grow. InsWeb has adopted a privacy policy for
information  of users of its online  marketplace.  InsWeb does not  disclose any
personally  identifiable   information  of  a  user  to  InsWeb's  participating
insurance  companies until the user  specifically  requests  insurance  coverage
based on an instant  online  quote,  or requests an offline quote or requests to
participate in an InsWeb Rewards Program. InsWeb does not sell or otherwise make
available to any other party any personally identifiable  information concerning
its users. However, InsWeb does compile user information in its databases.  This
aggregated  statistical   information  is  analyzed  internally  by  InsWeb  for
marketing  purposes  and to improve the content and site layout of its  website.
This  information is made available in aggregate form only,  without  individual
identification of consumers,  to InsWeb's participating  insurance companies for
their use in adjusting,  refining and expanding their product offerings.  InsWeb
is a member of the Online Privacy  Alliance and a licensee of the TRUSTe Privacy
Program  and  adheres  to  their  standards  regarding  the  protection  of  the
personally identifiable information of Internet users.

COMPETITION

     The online  insurance  distribution  market is a new industry and, like the
broader   electronic   commerce  market,  is  rapidly  evolving  and  is  highly
competitive.


                                     -9-
<PAGE>

     InsWeb competes with:

     -    single  insurance  company websites that offer quotes for InsWeb's own
          insurance products online or by telephone;

     -    Web-based  information delivery services that use generic filings with
          state  regulators  to deliver  estimated  price  quotes  from  various
          insurance companies;

     -    Web-assisted   agency   distribution   services,   that   provide   an
          Internet-based   distribution   channel  for   traditional   insurance
          agencies;

     -    companies that provide quotes and sell insurance policies online;

     -    online workplace marketers that sell insurance to employees over their
          employer's intranet; and

     -    providers  of software  technology  to insurance  companies  and other
          competitors  that may target  electronic  commerce  solutions  for the
          insurance industry.

     InsWeb believes the principal bases for competition in the online insurance
distribution market include:

     -    brand awareness;

     -    variety and quality of insurance company selection;

     -    strength of  relationships  and depth of technology  integration  with
          insurance companies;

     -    accuracy of insurance quotes;

     -    breadth and pricing of insurance product selection;

     -    speed, accessibility and convenience;

     -    quality and quantity of website content; and

     -    relationships with other online companies.

GOVERNMENT REGULATION

     The insurance industry is subject to extensive regulation under state laws.
Insurance  laws and  regulations  cover all  aspects of the  insurance  process,
including sales techniques,  underwriting for eligibility,  rates, compensation,
claim payments and record keeping by licensed insurance  companies and insurance
agents.  InsWeb  performs  functions  for licensed  insurance  companies and is,
therefore,  required to comply with a complex set of rules and regulations  that
often vary from state to state.  If InsWeb  fails to comply with these rules and
regulations,  InsWeb,  an insurance  company  doing  business  with InsWeb,  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 require  changes to InsWeb's  business or
otherwise harm InsWeb's business. Furthermore, because the application of online
commerce to the  insurance  market is  relatively  new, the impact of current or
future regulations on InsWeb's business is difficult to anticipate.

     A company that does business as an insurance agent is generally required to
be licensed in any state in which it conducts  that  business.  Although  InsWeb
does not believe that its historical  activities constitute doing business as an
insurance agent under existing laws and regulations,  InsWeb has received direct
and indirect inquiries from insurance


                                    -10-
<PAGE>

regulatory  authorities in several states  suggesting that its activities may be
considered  to fall under their  licensing  jurisdiction.  Should these or other
regulatory  authorities pursue inquiries and ultimately  determine that InsWeb's
activities required licensure, InsWeb's business could be harmed.

     In order to provide the types of services  that  require a license,  InsWeb
has caused a wholly-owned  subsidiary to be licensed as an insurance agent. This
subsidiary  is  currently  licensed  in 39 states  (including  the  District  of
Columbia)  and,  in the  remaining  eleven  states  where  corporations  are not
eligible  to become  licensed,  is  licensed  through  its  officers  or through
resident  agents  that  contract  with  InsWeb.   InsWeb's  policy  is  to  post
prominently  on its  website  the  jurisdictions  in  which  the  subsidiary  is
licensed.  Links to agents that  contract  with InsWeb  will be  established  to
afford consumers access to licensed agencies.  In addition,  employees of InsWeb
who are  engaged in the sale of  insurance  are  licensed as  insurance  agents.
InsWeb's  operations  depend on the validity of and it's continued good standing
under the licenses and approvals pursuant to which InsWeb's subsidiary, licensed
officers  and  agents  operate.   Licensing  laws  and  regulations   vary  from
jurisdiction to jurisdiction.  The applicable licensing laws and regulations are
subject  to  amendment  or  interpretation  by  regulatory   authorities.   Such
authorities generally are vested with broad discretion concerning the allowance,
renewal and  revocation of licenses and  approvals.  The inability to obtain the
requisite agent licenses or other necessary licenses, permits, or authorizations
could harm InsWeb's business.

     InsWeb  transferred  responsibility  for the ongoing  operation of InsWeb's
website  in April  1999 to its  licensed  subsidiary,  and  intends  to  conduct
business  activities that require a license through this subsidiary and InsWeb's
licensed officers and agents. Offering services through this licensed subsidiary
or through  licensed  officers and agents could create  conflicts with insurance
companies that have policies prohibiting them from employing insurance agents or
from selling  insurance  through  agents that  compete with their own  exclusive
agents.  These conflicts could result in a loss of business from these insurance
companies and could harm InsWeb's business.

     InsWeb  developed  its  Customer  Care  Center  to  provide  assistance  to
consumers who visit InsWeb's  website through  real-time chat and live telephone
support.  InsWeb  believes  that the  defined  responsibilities  of the  service
representatives  staffing  the  Customer  Care Center do not require  licensure;
however,  InsWeb  intends  to  comply  with  any  licensing  requirement  of the
jurisdictions served by the Customer Care Center.

     InsWeb  faces  additional  regulatory  risk  because  most of the  laws and
regulations   governing  the  transaction  of  insurance,   including  laws  and
regulations relating to marketing and underwriting, do not currently address the
delivery of services  through  electronic  communications.  Until these laws and
regulations are revised to clarify their  applicability to electronic  commerce,
any company  offering  insurance  products and services  through the Internet or
other means of electronic  commerce will face  uncertainty as to compliance with
these laws and regulations.  InsWeb's  policies and procedures may not be deemed
acceptable by any  regulatory  body  examining its  activities in light of these
potentially different laws and regulations. Any adverse regulatory actions could
seriously harm InsWeb's business.

     In addition,  many state  insurance  codes limit the  collection and use of
personal  information  by insurance  companies,  agents,  or  insurance  service
organizations and, under certain circumstances, the payment of insurance-related
compensation to unlicensed  persons.  If InsWeb does not comply with these state
laws,  InsWeb could be subject to fines or other  enforcement  proceedings  that
could harm its business. To date, InsWeb has not been notified by any regulatory
authority that its information  practices or compensation  methodologies  do not
comply with these state laws.

INTELLECTUAL PROPERTY

     InsWeb regards its  intellectual  property as critical to its success,  and
relies upon trademark, copyright and trade secrets laws in the United States and
other  jurisdictions to protect its proprietary rights. The INSWEB mark has been
registered in the United States,  France,  Germany,  South Korea,  Japan and the
United  Kingdom,  among  others and  applications  are pending in several  other
countries.  Other U.S. and worldwide trademark applications include, but are not
limited  to,  eAgent,  InsWeb.com,  Powered  by  InsWeb,  and Where You and Your
Insurance  Really Click.  InsWeb has applied for patents on its core  technology
and related  patentable  subject matter,  however no patent has yet issued,  and
thus InsWeb  cannot  currently  prevent a competitor  from  independently  using
similar functionality.  In connection with its acquisition of assets from Intuit
in January  2001,  InsWeb  obtained the rights to patent  applications  filed by
Intuit relating to Intuit's online  insurance  shopping and purchasing  service.
InsWeb intends to continue to pursue these patents. InsWeb's pending trademark


                                    -11-
<PAGE>

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. In addition,  effective patent, copyright,
trademark,  and trade secret  protection  may be  unavailable or limited in some
foreign  countries.  InsWeb also seeks to protect its proprietary rights through
physical  and  technological   security   measures,   and  through  the  use  of
confidentiality  or license  agreements with its business  partners,  employees,
consultants,  advisors  and  others,  and  generally  to control  access to, and
distribution  and  use of,  its  software,  documentation,  business  and  other
proprietary  information.  Despite  InsWeb's  efforts to protect its proprietary
rights from unauthorized use or disclosure,  employees, consultants, advisors or
others may not maintain the confidentiality of InsWeb's proprietary information,
and this proprietary information may otherwise become known, or be independently
developed,  by  competitors.   The  steps  InsWeb  has  taken  may  not  prevent
misappropriation  of its proprietary  rights,  particularly in foreign countries
where laws or law enforcement  practices may not protect its proprietary  rights
as fully as in the U.S.

     InsWeb  licenses its  trademarks  and similar  proprietary  rights to third
parties.  While  InsWeb  attempts  to ensure  that the  quality  of its brand is
maintained by these  companies,  they may take actions that could harm the value
of InsWeb's proprietary rights or the reputation of InsWeb or its services.

     InsWeb  may  receive  notice of claims of  infringement  of other  parties'
proprietary rights or claims that its own patents or other intellectual property
rights are invalid.  From time to time InsWeb has been  subject to  infringement
claims in the  ordinary  course of its  business,  including  claims of  alleged
infringement  of the  trademark  rights  of  third  parties  by  InsWeb  and the
companies  with which it does  business.  Any of these  claims,  with or without
merit, could be time consuming to defend,  result in costly  litigation,  divert
management  attention and  resources or require  InsWeb to enter into royalty or
licensing  agreements.  Licenses may not be available on reasonable terms, if at
all,  and  the  assertion  or  prosecution  of  any  infringement  claims  could
significantly harm InsWeb's business.

EMPLOYEES

     As of December 31, 2000,  InsWeb had 143 full-time  employees,  compared to
297 at December 31, 1999. This reduction in workforce is primarily  attributable
to InsWeb's restructuring plan and relocation to the Sacramento California area.
InsWeb  expects its  workforce to increase  once the  relocation  is  completed.
InsWeb has never had a work  stoppage,  and none of its  employees are currently
represented  under  collective  bargaining  agreements.   InsWeb  considers  its
relations with its employees to be good. InsWeb believes that its future success
will depend in part on the continued  service of its senior  management  and key
technical personnel and its ability to attract,  integrate,  retain and motivate
highly qualified technical and managerial  personnel.  Competition for qualified
personnel in InsWeb's industry and geographical location is intense.  InsWeb may
not continue to be successful in attracting and retaining a sufficient number of
qualified personnel to conduct its business in the future.

EXECUTIVE OFFICERS OF THE REGISTRANT

     As of March 21, 2001, InsWeb's executive officers were as follows:

<TABLE>
<CAPTION>

NAME              POSITION WITH INSWEB                                       AGE

<S>               <C>                                                        <C>
Hussein A. Enan   Chairman of the Board and Chief Executive Officer          55
Mark P. Guthrie   President, Chief Operating Officer and Chief Financial
                  Officer (Acting)                                           39
L. Eric Loewe     Senior Vice President, General Counsel                     43
</TABLE>

     HUSSEIN A. ENAN  co-founded  InsWeb in February  1995 and has served as its
Chairman of the Board and Chief Executive Officer since its inception.  Mr. Enan
also served as InsWeb's President from May 1999 to June 2000. From March 1992 to
November  1994,  Mr. Enan was a general  partner at E.W.  Blanch,  a reinsurance
intermediary that merged with his own wholly-owned  company,  Enan & Company,  a
reinsurance  intermediary,  in March 1992.  Mr. Enan  founded  Enan & Company in
February 1979. From November 1970 to March 1979, Mr. Enan held various executive
positions at BEP International, a Canadian reinsurance intermediary.


                                    -12-
<PAGE>

     MARK P. GUTHRIE joined InsWeb in September 1997 as Senior Vice President of
Strategic  Partnerships  and has  served  as its  Executive  Vice  President  of
Operations  from July 1998 to June 2000,  as InsWeb's  Chief  Operating  Officer
since January 2000 and as InsWeb's  President and acting Chief Financial Officer
since  June  2000.  From July 1995 to August  1997,  Mr.  Guthrie  held  various
positions  with  Industrial  Indemnity,   a  nationwide  property  and  casualty
insurance  company,  most  recently  as senior  operating  officer  of  national
programs.

     L. ERIC LOEWE joined InsWeb in October 1998 as General Counsel, Legal
and Regulatory, responsible for all regulatory compliance issues, and has
served as Senior Vice President and General Counsel since September 2000.
Prior to joining InsWeb, Mr. Loewe held various positions with the National
Association of Independent Insurers from January 1980 to September 1998. As
Senior Counsel, Mr. Loewe was responsible for legislation and regulations
affecting the association's 570 member companies. Mr. Loewe is a member of
the Illinois and California bars.

ITEM 2.  PROPERTIES.

     InsWeb's corporate headquarters and its principal  administrative,  product
development,  sales and  marketing  operations  have been  relocated to a 55,000
square foot facility in the Sacramento  California  area,  which InsWeb occupies
under a lease expiring in 2010. InsWeb also leases  approximately  65,000 square
feet of office  space in Redwood  City,  California  under a lease  expiring  in
September 2008. This space was formerly  occupied by InsWeb as its  headquarters
facility. As of March 2001,  approximately one-half of the Redwood City facility
was sublet,  and InsWeb  anticipates  subleasing  the remainder of this property
during 2001.  InsWeb  believes that its new  facilities are adequate to meet its
needs for future  growth,  and there  should be no need to lease  additional  or
alternative space in the near term.

ITEM 3.  LEGAL PROCEEDINGS.

     In February 2001, InsWeb temporarily suspended its online  health-insurance
quoting  services due to the  decision by  eHealthInsurance,  formerly  InsWeb's
exclusive provider of online health-insurance  quotes, to unilaterally terminate
the  relationship.  In April 2000,  the two companies  signed a two-year  online
distribution agreement by which  eHealthInsurance  became the exclusive provider
of  individual  health,  small-group  health and Medicare  supplement  insurance
quotes  to  InsWeb  users  through  a  co-branded  website.  In  February  2001,
eHealthInsurance filed suit in the U.S. District Court for the Northern District
of California  alleging  InsWeb's  failure to perform its obligations  under the
agreement.  The complaint seeks  unspecified  compensatory and punitive damages.
InsWeb  believes  that the claims are without merit and that the outcome of this
lawsuit will not have a material adverse effect on InsWeb's  financial  results,
cash flow or financial  position.  In addition,  InsWeb filed a  countersuit  in
March 2001,  alleging that  eHealthInsurance  wrongfully  terminated the linking
agreement and pursued a course of conduct aimed at damaging InsWeb's business.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     InsWeb did not submit any matters to a vote of its security  holders during
the quarter ended December 31, 2000.


                                    -13-
<PAGE>

                                     PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.

     InsWeb  consummated its initial public offering on July 23, 1999.  InsWeb's
common stock is quoted on the Nasdaq National Market under the symbol "INSW." As
of December 31,  2000,  there were  approximately  220  stockholders  of record.
Because  many  shares are held by brokers  and other  institutions  on behalf of
stockholders,  we are  unable  to  estimate  the total  number  of  stockholders
represented by these record  holders.  The following  table sets forth,  for the
quarters  indicated,  the high and low sales price per share of InsWeb's  common
stock as reported on the Nasdaq National Market:

<TABLE>
<CAPTION>

                                                             PRICE RANGE
                                                            QUARTER ENDED
                                                         -------------------
                                                           HIGH         LOW
<S>                                                       <C>         <C>
September 30, 1999....................................... $44.00      $15.44
December 31, 1999........................................ $35.69      $16.00
March 31, 2000........................................... $26.13      $ 9.00
June 30, 2000............................................ $10.25      $ 2.09
September 30, 2000....................................... $ 3.25      $ 1.19
December 31, 2000........................................ $ 3.00      $ 0.50
</TABLE>

         We have not paid any cash dividends on InsWeb's  capital stock.  InsWeb
currently  intends to retain future  earnings,  if any, for use in the operation
and expansion of our business and,  therefore,  we do not anticipate  paying any
cash dividends in the foreseeable future.


                                    -14-
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA.

     The  following  selected  consolidated  financial  data  should  be read in
conjunction with  "Management's  Discussion and Analysis of Financial  Condition
and Operating results" and the consolidated  financial  statements and the notes
thereto included elsewhere in this Form 10-K.

CONSOLIDATED STATEMENT OF OPERATIONS DATA:
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>

                                                                              YEAR ENDED DECEMBER 31,

                                                          -----------------------------------------------------------
<S>                                                       <C>            <C>         <C>         <C>         <C>
                                                          ------------------------------------------------------------
Revenues: .............................................       2000(1)        1999        1998        1997        1996
                                                          ------------------------------------------------------------

  Transaction fees ....................................   $ 19,561       $ 19,138    $  3,151    $    116    $      7
  Development and maintenance fees ....................      3,598          2,673         789         551         199
  Other revenues ......................................         51             29         370          83          42
                                                          ------------------------------------------------------------
     Total revenues ...................................     23,210         21,840       4,310         750         248
Operating expenses:
  Product development .................................      8,690          8,871      10,077       3,210       2,900
  Sales and marketing .................................     38,248         33,477       8,954       3,167       2,010
  General and administrative ..........................     21,179         13,474       6,640       3,259       2,730
   Amortization of intangible assets ..................      1,150          3,129        --          --          --
  Amortization of stock-based
     compensation .....................................        912          1,272         540         470        --
   Impairment of goodwill and other intangibles
     (2) ..............................................      4,418           --          --          --          --
  Restructuring charge (3) ............................      2,167           --          --          --          --
                                                          ------------------------------------------------------------
     Total operating expenses .........................     76,764         60,223      26,211      10,106       7,640
                                                          ------------------------------------------------------------
Loss from operations ..................................    (53,554)       (38,383)    (21,901)     (9,356)     (7,392)
Other income (expense), net ...........................         56           (166)        600        --          --
Interest income (expense), net ........................      4,286          2,348      (1,189)        293         122
                                                          ------------------------------------------------------------
Loss before cumulative effect of a change in
  accounting principle ................................    (49,212)       (36,201)    (22,490)     (9,063)     (7,720)
Cumulative effect of a change in accounting
  principle ...........................................     (1,635)          --          --          --          --
                                                          ------------------------------------------------------------

Net loss ..............................................   $(50,847)      $(36,201)   $(22,490)   $ (9,063)   $ (7,720)
                                                          ============================================================

Loss per share before cumulative effect of a
  change in accounting principle--basic and diluted....   $  (1.40)      $  (1.52)   $  (1.52)   $  (0.62)   $  (0.56)
                                                          ============================================================

Net loss per share--basic and diluted .................   $  (1.45)      $  (1.52)   $  (1.52)   $  (0.62)   $  (0.56)
                                                          ============================================================
Shares used in computing net loss per share--basic
  and diluted .........................................     35,143         23,864      14,813      14,601      13,055
                                                          ============================================================

</TABLE>

(1)  Reflects  the  impact of the  adoption  of SAB 101 on  revenue  recognition
     effective  January  1,  2000.  Pro forma  amounts  of net loss and  related
     diluted per share amounts,  assuming retroactive  application of the change
     in  accounting  principle  for the years ended 1997 through 2000  (previous
     amounts were not material) are as follows:

<TABLE>
<CAPTION>

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Proforma amounts reflecting the adoption of
<S>                                                 <C>         <C>         <C>        <C>
SAB 101                                             2000        1999        1998       1997
                                                -------------------------------------------

Net loss ....................................   $(49,212)   $(37,195)   $(22,817)   $(9,376)
                                                ===========================================

Net loss per share--basic and diluted .......   $  (1.40)   $  (1.56)   $  (1.54)   $ (0.64)
                                                ===========================================
</TABLE>

(2)  Represents  the  write-down  of  goodwill  and other  intangible  assets of
     Benelytics, Inc., in May 2000.  See Note 10 to the  consolidated  financial
     statements.

(3)  Charge taken in May 2000 pursuant to InsWeb's  restructuring  plan. See
     Note 9 to the consolidated financial statements.


                                    -15-
<PAGE>


CONSOLIDATED BALANCE SHEET DATA:

<TABLE>
<CAPTION>

                                                DECEMBER 31
                             -------------------------------------------------
                               2000      1999      1998      1997      1996
                             -------------------------------------------------
<S>                           <C>       <C>        <C>       <C>       <C>
Cash and cash equivalents     24,795    25,689     8,337     2,360     6,807
Short-term investments ...    26,331    64,063      --        --        --
Working capital ..........    51,657    91,631     5,497     2,040     6,739
Total assets .............    73,008   118,281    49,357     5,140    93,523
Long-term debt ...........     1,312     1,464     2,089      --        --
Total stockholders' equity    63,884   111,185    19,582     3,062     7,476

</TABLE>


                                    -16-
<PAGE>


ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     This Annual Report on Form 10-K and in particular  Management's  Discussion
and  Analysis  of  Financial   Condition  and  Results  of  Operations  contains
forward-looking   statements   with   respect  to  InsWeb's   future   financial
performance.  These forward-looking  statements are subject to various risks and
uncertainties,  including the factors described below under the caption "Factors
That May Affect  Our Future  Performance,"  and other  documents  filed with the
Securities and Exchange Commission,  that could cause InsWeb's actual results to
differ materially from historical results or those currently anticipated.

RECENT DEVELOPMENTS

     RESTRUCTURING  -  Effective  May  1,  2000,  State  Farm  Insurance,  which
accounted  for  approximately  39.5%,  31% and 14% of InsWeb's  revenues for the
years ended December 31, 1998,  1999 and 2000,  respectively,  discontinued  its
participation  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 three Canadian  provinces,  and
homeowners  and renters  insurance is available  in 33 fewer  states.  Term life
offerings were not significantly affected in any state.

     To address this  situation and other market  conditions,  InsWeb  initiated
strategic objectives to address its short-term business plans in order to manage
its expenses  and  portfolio of cash and  short-term  investments,  including an
initial  reduction  of  workforce  in  April  2000  by  approximately  10% and a
significant  reduction in consumer  marketing  expenses  beginning in the second
quarter of fiscal 2000. In May 2000, the Board of Directors  approved a decision
to restructure  InsWeb's  operations in order to enhance operating  efficiencies
and to further develop its agency  operations.  The restructuring  plan included
the closure of InsWeb's  facilities  in Redwood  City,  San Carlos and  Westlake
Village,  California and Bel Air,  Maryland,  the relocation of InsWeb's  entire
operations to the Sacramento,  California area and the discontinuance of certain
strategic initiatives. The restructuring plan was completed in the first quarter
of 2001. See Note 9 to the consolidated financial statements.

EHEALTHINSURANCE.COM - 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 could
access eHealthInsurance's selection of leading insurers, products and service
offerings. The exclusive, two-year linking agreement included 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 agreement, InsWeb negotiated termination agreements with its
participating health insurance carriers and discontinued its existing health
insurance marketplace. In February 2001, InsWeb temporarily suspended its
online health insurance quoting due to the decision by eHealthInsurance to
unilaterally terminate the relationship. Additionally, eHealthInsurance has
filed suit in U.S. District Court against InsWeb alleging InsWeb's failure to
perform its obligations under the linking agreement. The complaint seeks
unspecified compensatory and punitive damages. InsWeb believes that the
claims are without merit and that the outcome of this lawsuit will not have a
material adverse effect on InsWeb's earnings, cash flow or financial
position. In addition, InsWeb countersued eHealthInsurance on March 23, 2001
claiming that eHealthInsurance wrongfully terminated the linking agreement
and pursued a course of conduct aimed at damaging InsWeb's business.

     ACQUISITION OF INTUIT INSURANCE SERVICES - In January 2001, InsWeb acquired
from Intuit Inc.,  certain  assets and related  liabilities  associated  with an
online  insurance  shopping and purchasing  service operated by Intuit Insurance
Services,  Inc., a wholly owned  subsidiary  of Intuit in exchange for 7,019,389
shares of InsWeb's common stock. The purchase price,  based on the fair value of
the  common  stock  value  at  the  date  the  acquisition  was  announced,  was
approximately $12.5 million.  Pursuant to related  agreements,  a representative
from  Intuit  has  been  elected  to the  InsWeb  Board of  Directors,  and some
restrictions were placed on the ability of InsWeb to conduct future acquisitions
or dispositions.

     In  connection  with the  acquisition,  InsWeb  and Intuit  entered  into a
license and distribution  agreement,  under which Intuit and InsWeb have granted
one another licenses to create links between their respective  websites in order
to create  and  operate a  co-branded  insurance  center.  This  agreement  also
provides  that  InsWeb  will be the  exclusive  aggregator  of  online  consumer
insurance  services  for  Quicken.com,  an Intuit  website,  and that subject to
certain minimum clickthrough targets,  Intuit will share in associated revenues.
Intuit has also agreed to a not to compete covenant for a period of 5 years.


                                    -17-
<PAGE>

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  health   insurance,   and  obtain  insurance
company-sponsored   quotes  for  actual  coverage.   In  order  to  create  this
marketplace,  InsWeb has  established  close  relationships  with a  significant
number of insurance companies throughout the United States.

     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,
or a commission  from the sale of an insurance  policy through InsWeb  Insurance
Services.  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  either  at the  time  the  qualified  lead is  delivered  to the
insurance  company,  or when the policy is sold by InsWeb Insurance  Services or
the insurance company.

     InsWeb  also  generates   development   and   maintenance   fees  from  its
participating  insurance  companies.  InsWeb  charges a set-up fee to design and
develop customized  interfaces between an insurance company's information system
and the InsWeb site. Development fees are typically deferred until the insurance
company's  integration with the InsWeb site becomes  operational,  at which time
the  development  fees are  recognized  over the  estimated  life of the carrier
relationship,  typically 3 years.  Prior to the adoption of SEC Staff Accounting
Bulletin No. 101:  Revenue  Recognition  (SAB 101),  effective  January 1, 2000,
development  revenues  from  set-up  fees  were  recognized  when the  insurance
company's  integration  became  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  InsWeb's  online
marketplace expands and transaction fees increase.

     InsWeb  initially  focused  its  efforts on  developing  insurance  company
coverage for automobile  insurance in order to be able to offer true comparative
online shopping for this important segment of the insurance  market.  Automobile
insurance  accounted for  approximately  75% of total  revenues in 1998,  78% in
1999,and 69% in 2000. We anticipate that  automobile  insurance will continue to
account for a  significant  portion of  InsWeb's  revenues  for the  foreseeable
future.  However,  InsWeb  intends to  continue  to expand its online  insurance
marketplace  by adding new  products and  additional  insurance  companies,  and
expects  fees  related to  automobile  insurance  to  eventually  decrease  as a
percentage  of revenues as  additional  insurance  companies  and  products  are
brought online.

     InsWeb has been dependent on a limited number of insurance  companies for a
majority  of its  revenues.  Revenues  from  State  Farm  and  AIG  account  for
approximately 14% and 11%, respectively, of InsWeb's revenues for the year ended
December 31, 2000,  revenues from State Farm, AIG and American Family  accounted
for approximately 31%, 11% and 11%,  respectively,  of InsWeb's revenues for the
year ended  December 31, 1999,  and revenues  from State Farm,  AIG and Reliance
Direct accounted for approximately 40%, 16% and 10%,  respectively,  of InsWeb's
revenues for the year ended  December 31, 1998.  InsWeb  expects its revenues to
become less  concentrated  as new  insurance  companies  are added to its online
insurance marketplace.  However, because of the broad market presence of some of
InsWeb's  participating  insurance  companies,  InsWeb  expects to  continue  to
generate  a  substantial  portion  of its  revenues  from a  limited  number  of
insurance  companies for the foreseeable  future.  State Farm  discontinued  its
participation in InsWeb's online insurance marketplace as of May 1, 2000.


                                    -18-
<PAGE>

     Product  development  expenses  consist  primarily  of payroll  and related
expenses for development and technology personnel.  As discussed in the notes to
the financial statements,  management implemented EITF Issue 00-02,  "Accounting
for Website  Development Costs," during the third quarter of 2000. This resulted
in the  capitalization  of website  development  costs  directly  related to the
enhancement  and  upgrade of the InsWeb  site.  Such costs had  previously  been
expensed as period costs.  Consistent with the guidance of EITF Issue 00-02, and
other applicable accounting guidance,  all other software development costs have
been expensed as incurred.  Though  product  development  expenses  decreased in
fiscal 2000 compared to fiscal 1999, as a result of expenses  capitalized  under
EITF 00-02,  InsWeb expects that its product  development costs will continue to
increase for the foreseeable future.

     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  relationships  and  expenses
related to its customer care and insurance agency operations.  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. In
the second quarter of 2000, InsWeb began  concentrating  its consumer  marketing
program on maintaining key online relationships, and on selective cost effective
marketing  campaigns  designed to maintain consumer  awareness of InsWeb and its
online  insurance  marketplace.  As a result,  InsWeb  began  reducing  consumer
marketing  expenses in the second quarter of 2000.  Consumer  marketing expenses
are  expected  to  increase  in future  periods  as InsWeb  expands  its  agency
operations and maintains its online relationships.

     General  and  administrative  expenses  consist  primarily  of payroll  and
related  expenses  for  InsWeb's   management,   administrative  and  accounting
personnel,  expenses relating to site operations,  occupancy costs, professional
fees and other general corporate  expenses.  Although general and administrative
expenses  have  increased  in support of  InsWeb's  continued  business  and its
operations as a public company,  InsWeb expects that general and  administrative
expenses  will  decrease  over the near term due to reduced  headcount  and cost
containment measures undertaken as a result of the restructuring plans announced
in May 2000.

     In 1998, InsWeb acquired Benelytics, Inc., a developer of employee
health benefits selection and management software and reference data
products, in order to accelerate the development of its health insurance
product offerings. The total purchase price of $8.7 million consisted of
909,000 shares and warrants to purchase an aggregate of 12,000 shares of
InsWeb's common stock with an estimated fair value of approximately $8.5
million and acquisition-related expenses and assumed liabilities. Of the
total purchase price, $7.3 million was allocated to goodwill and $1.4 million
to software and other intangible assets. In April 2000, InsWeb entered into a
linking agreement with eHealthInsurance.com under which InsWeb customers
access eHealthInsurance's individual health, small group health, and Medicare
supplement insurance product offerings. As a result, InsWeb evaluated the
cost to develop and market its health care product offerings and decided to
discontinue the development of its health care initiatives, which were
primarily being carried out through the business and assets acquired as a
result of InsWeb's acquisition of Benelytics. InsWeb then evaluated the
recoverability of the goodwill and other intangibles recognized in connection
with this acquisition, and determined that the circumstances indicated an
inability to recover the carrying amount of the assets. During the second
quarter of 2000, InsWeb recorded a one-time, non-cash write down of
$4,418,000 of goodwill and other intangible assets, including the assembled
workforce and contractual relationships associated with the Benelytics
acquisition. As of December 31, 2000, all intangible assets relating to the
acquisition of Benelytics have been fully amortized or written off.

     Since its  inception,  InsWeb has incurred  significant  losses,  and as of
December 31, 2000,  InsWeb had an accumulated  deficit of $125.3 million.  These
losses, and this accumulated  deficit,  have resulted from the significant costs
incurred in the development of InsWeb's technology  platform,  the establishment
of relationships  with insurance  companies,  their  integration with the InsWeb
site, and InsWeb's marketing and sales activities. InsWeb intends to continue to
invest in product  development,  sales and marketing  and in its  administrative
infrastructure.  As a result,  InsWeb  believes  that it will  continue to incur
operating  losses during the next fiscal year.  Although  InsWeb has experienced
revenue growth in recent periods,  its operating  results for future periods are
subject to numerous  uncertainties,  and there can be no assurance that InsWeb's
revenue  growth  will  continue  or that it will be able to achieve  and sustain
profitability.  In view of the rapidly evolving nature of InsWeb's  business and
its limited operating history, InsWeb believes that period-to-period comparisons
of its operating results are not necessarily meaningful and should not be relied
upon as an indication of future performance.


                                    -19-
<PAGE>


RESULTS OF OPERATIONS

     The following table sets forth statement of operations data as a percentage
of total revenues for the periods indicated:

<TABLE>
<CAPTION>

                                                         YEAR ENDED DECEMBER 31,
                                                         2000      1999     1998
                                                         ----      ----     ----
<S>                                                      <C>       <C>       <C>
Revenues:

  Transaction fees ..................................    84.3%     87.6%     73.1%
  Development and maintenance fees ..................    15.5      12.2      18.3
  Other revenues ....................................     0.2       0.2       8.6
                                                        --------------------------
         Total revenues .............................   100.0     100.0     100.0

Operating expenses:
  Product development ...............................    37.5      40.6     233.8
  Sales and marketing ...............................   164.8     153.3     207.7
  General and administrative ........................    91.2      61.7     154.1
  Amortization of stock-based compensation ..........     3.9       5.8      12.5
  Amortization of intangible assets .................     5.0      14.3      --
  Impairment of goodwill ............................    19.0      --        --
  Restructuring charge ..............................     9.3      --        --
                                                        --------------------------
         Total operating expense ....................   330.7     275.7     608.1
                                                        --------------------------
Loss from operations ................................   (230.7)   (175.7)   (508.1)

Other income (expense) ..............................     0.2      (0.8)     13.9
Interest income, net ................................    18.5      10.7     (27.6)
                                                        --------------------------
Loss before accounting change .......................   (212.0)   (165.8)   (521.8)

Cumulative effect of a change in accounting principle    (7.1)     --        --
                                                        --------------------------
Net loss ............................................   (219.1)%  (165.8)%  (521.8)%
                                                        ===========================
</TABLE>

     The  financial  table above  reflects  the  adoption  of SAB 101  effective
January 1, 2001. See Note 3 to the consolidated financial statements.

YEARS ENDED DECEMBER 31, 2000 AND 1999

REVENUES

     TRANSACTION FEES.  Transaction fees accounted for $19.6 million,  or 84.3%,
of total  revenues in 2000,  compared to $19.1 million,  or 87.6%,  in 1999. The
increase in  transaction  fees for the year ended  December 31, 2000 compared to
the  prior  year was  primarily  the  result  of the  increased  number of leads
generated  by the  increase  in  the  number  of  completed  shopping  sessions,
partially offset by a decline in revenue  generated per shopping session and the
discontinuation  of State Farm's  participation in the InsWeb online marketplace
effective May 1, 2000. 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 year ended  December  31, 2000,  more than 2.1 million  shopping
sessions were completed at InsWeb,  a 5% increase over the 2.0 million  shopping
sessions completed in 1999. Additionally,  InsWeb recorded more than 8.0 million
unique user sessions during the year ended December 31, 2000.

     DEVELOPMENT  AND  MAINTENANCE   FEES.   Development  and  maintenance  fees
accounted for $3.6 million,  or 15.5%,  of total  revenues in 2000,  compared to
$2.7 million,  or 12.2%,  in 1999. The increase for year ended December 31, 2000
as compared


                                    -20-
<PAGE>

to the same period last year,  primarily resulted from revenue associated with a
development  agreement  with InsWeb Japan K.K.,  and to a lesser  extent,  to an
increase in the number of InsWeb's participating  insurance companies. As InsWeb
transitions to a greater number of agency based insurance carriers,  development
and maintenance fees is expected to decline in 2001.

OPERATING EXPENSES

     PRODUCT DEVELOPMENT. Product development expenses decreased to $8.7 million
in 2000 from $8.9 million in 1999.  The decrease was primarily  attributable  to
the  capitalization  of  website  development  costs  as  required  by a  recent
accounting pronouncement,  EITF 00-02. Excluding the $1.2 million capitalization
of website  development  costs,  net of  amortization,  the  increase in product
development  expenses in 2000,  was  primarily  attributed  to a higher  average
headcount  needed to support the  requirements  of InsWeb's  growing  network of
participating insurance companies, online relationships, and to design, test and
deploy  InsWeb's  product  offerings.   As  a  result  of  InsWeb'  s  announced
restructuring  plans,  product  development  expenses are expected to decline in
2001 as a result of reductions in headcount and additional  amounts  capitalized
under EITF 00-02.

     SALES  AND  MARKETING.  Sales and  Marketing  expenses  increased  to $38.2
million in 2000 from $33.5 million in 1999.  The increase was due to substantial
increases in consumer  marketing  expenses,  including  increased costs and fees
associated  with new and existing  online  relationships,  costs incurred in the
first half of the year related to national  radio and television  campaigns,  an
increase in the average number of sales and marketing  personnel,  and operating
costs  associated  with InsWeb's  Customer Care Center and associated  insurance
agency  activities.  As  InsWeb  intends  to  continue  to focus  its  marketing
activities  on online  marketing  programs,  sales and  marketing  expenses  are
expected  to  decline  in 2001  partially  offset  by  increased  personnel  and
operating costs associated with InsWeb's agency operations.

     GENERAL AND ADMINISTRATIVE.  General and administrative  expenses increased
to $21.2 million in 2000 compared to $13.5 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.  InsWeb expects that general and
administrative expenses will decrease in fiscal 2001 compared to fiscal 2000 due
to reduced headcount and cost containment measures undertaken as a result of the
announced restructuring plan announced in May 2000.

    AMORTIZATION  OF  STOCK-BASED  COMPENSATION.   Amortization  of  stock-based
compensation  decreased to $0.9 in 2000  compared to $1.3 million in 1999.  This
decrease is  attributable  to the  reduction in employees  in  conjunction  with
InsWeb's restructuring plan.

     AMORTIZATION  OF  INTANGIBLE  ASSETS.  Amortization  of  intangible  assets
decreased  to $1.2  million  in 2000,  compared  to $3.1  million  in 1999.  The
decrease in expense is attributable  to the write-down of the  Benelytics,  Inc.
goodwill and other intangible assets in May 2000.

     RESTRUCTURING  CHARGE.  In May 2000,  the  Board of  Directors  approved  a
decision  to  restructure  InsWeb's  operations  in order to  enhance  operating
efficiencies  and to further develop its agency  operations.  The  restructuring
plan included the closure of InsWeb's facilities in Redwood City, San Carlos and
Westlake Village,  California and Bel Air, Maryland,  the relocation of InsWeb's
entire operations to the Sacramento  California area, and the  discontinuance of
certain strategic initiatives. The restructuring plan was completed in the first
quarter  of 2001.  As a result of  InsWeb's  restructuring  plan,  in the second
quarter of 2000,  InsWeb  recorded a restructuring  charge of $1.5 million.  The
charge consisted of employee separation cost of $0.9 million,  asset impairments
related to its San Carlos facility of $1.1 million, and other exit costs of $0.5
million,  offset by a lease  termination fee of $1.0 million to be received as a
result of the  termination  of a lease on InsWeb's San Carlos  facility.  In the
third quarter of 2000, InsWeb recorded additional  restructuring charges of $0.6
million.  The charge consisted of additional  employee  separation costs of $0.1
million,  asset  impairments  of $0.2  million,  and  other  exit  costs of $0.3
million.  Other  exit costs  recorded  in the third  quarter of 2000,  primarily
represent  future rent payments for closed  facilities.  As InsWeb completed its
restructuring   plan  in  the  first  quarter  of  fiscal  2001,  no  additional
restructuring expenses are expected to be incurred with respect to this plan.

     Separately, InsWeb recorded charges for the year ended December 31, 2000 of
approximately  $4.8  million  for  retention   agreements  with  key  employees,
relocation expenses, and other transition costs. These charges were recorded in


                                    -21-
<PAGE>

product  development,  sales  and  marketing,  and  general  and  administrative
expenses, respectively. InsWeb expects to incur additional retention, relocation
and  other  transition  costs  to be  incurred  through  the  completion  of the
restructuring  period in the first quarter of 2001.  Though  InsWeb's  operating
expenditures  are  expected  to decline as a result of this  restructuring  plan
through reduced  headcount,  a reduction of depreciation from assets disposed of
and reduced occupancy expenses,  operating expenses nevertheless may increase if
the restructuring plan is not ultimately successful.

     IMPAIRMENT OF GOODWILL AND OTHER INTANGIBLES. In the second quarter of
2000, InsWeb evaluated the recoverability of the goodwill and other
intangibles recognized in connection with its acquisition of Benelytics and
determined, as a result of its partnership with eHealthInsurance announced in
April 2000, that it would be unlikely to recover the carrying amount.
Accordingly, during the second quarter of 2000, InsWeb recorded a one-time,
non-cash write-down of $4.4 million of goodwill and other intangible assets,
including the assembled workforce and contractual relationships, associated
with the Benelytics acquisition. See Note 19 to the consolidated financial
statements.

OTHER INCOME, (EXPENSE) NET

     Other  income,  net was  $56,000 in 2000  compared to a loss of $166,000 in
1999, and primarily  consisted of the gain on foreign currency  exchange rate on
its note payable to InsWeb Japan K.K. In 1999, other expense primarily consisted
of InsWeb's equity share of the net loss of InsWeb Japan K.K. As of December 31,
2000 and 1999, InsWeb owned a 25% equity interest in InsWeb Japan K.K.

INTEREST INCOME, NET

     Interest income,  net includes income earned on InsWeb's  investments,  and
the expense related to its outstanding debt obligations. Net interest income for
the year ended December 31, 2000 was $4.3 million compared to $2.4 million,  for
the same period in 1999.  The  increase in net interest  income was  primarily a
result of the  repayment  of the line of credit in fiscal 1999 from the proceeds
of InsWeb's  initial public offering of common stock in July 1999, and increased
interest income on cash and short-term investments in fiscal 2000.

YEARS ENDED DECEMBER 31, 1999 AND 1998

REVENUES

    TRANSACTION FEES. Transaction fees accounted for $19.1 million, or 87.6%,
of total revenues in 1999, compared to $3.2 million, or 73.1%, in 1998. This
increase was primarily the result of a substantial increase in the number of
completed shopping sessions and, to a lesser extent, increased revenues per
completed 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. The increase in
revenues per completed shopping session was due to increased insurance
company coverage and, to a lesser degree, increases in the average
transaction fee per qualified lead.

    DEVELOPMENT AND MAINTENANCE FEES. Development and maintenance fees
accounted for $2.7 million, or 12.2%, of total revenues in 1999, compared to
$789,000, or 18.3% in 1998. The increase in development fees resulted
primarily from an increased number of participating insurance companies whose
integration with the InsWeb online insurance marketplace became operational
during 1999. Maintenance fees increased as a result of the expansion in the
number of InsWeb's participating insurance companies. These revenues are not
subject to the provisions of SAB 101, which became effective January 1, 2000.

OPERATING EXPENSES

    PRODUCT DEVELOPMENT.  Product development expenses decreased to $8.9 million
in 1999 from $10.1 million in 1998.  This decrease was primarily due to the $5.5
million  cost of software  licenses  that were  expensed in 1998 due to InsWeb's
decision not to  integrate  the software  into its  products.  Exclusive of this
expense, product development expenses increased in 1999 over 1998, primarily due
to the hiring of  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 expanding line of product offerings.


                                    -22-
<PAGE>

    SALES AND MARKETING. Sales and marketing expenses increased to $33.5 million
in 1999  from  $9.0  million  in  1998.  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  establishing  InsWeb's  Customer Care Center to
provide additional customer service.

    GENERAL AND ADMINISTRATIVE. General and administrative expenses increased to
$13.5 million in 1999 from $6.6 million in 1998. 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  was $1.3  million  in 1999  compared  to  $500,000  in 1998.  This
increase  was   attributable  to  the   amortization   of  additional   deferred
compensation  charges  related to certain  stock option  grants where InsWeb 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 was
$3.1  million  in 1999.  This  amount was  attributable  to the  acquisition  of
Benelytics in December 1998.

OTHER INCOME (EXPENSE), NET

     Other expense in 1999 primarily  consisted of InsWeb's  equity share of the
net loss of InsWeb Japan K.K. As of December 31, 1999, InsWeb owned a 25% equity
interest in InsWeb Japan K.K. Other income,  net in 1998 represented income from
the sale of assets of InsWeb's  property and casualty  agent's line of business,
net of a $50,000 non-compete fee.

INTEREST INCOME (EXPENSE), NET

     Interest income (expense),  net includes income earned on InsWeb's invested
cash and investments and expenses related to its outstanding  debt  obligations.
Net interest income was $2.3 million in 1999,  compared to net interest  expense
of $1.2 million in 1998.  The increase in net  interest  income was  primarily a
result of the repayment of the line of credit and the investment of the proceeds
from the issuances of preferred and common stock.

LIQUIDITY AND CAPITAL RESOURCES

     At December  31, 2000,  InsWeb's  principal  source of liquidity  was $51.1
million in cash, cash equivalents and short-term investments.

     Net cash used in operating activities was $38.3 million in 2000 compared to
$32.3 million in 1999. In each period,  the use of cash  primarily  consisted of
InsWeb's  operating  loss before  non-cash  items.  In 2000,  the non-cash items
included  the  amortization  and  write-off  of  intangibles  of  $5.6  million,
amortization  of deferred  compensation  of $0.9  million,  write-down  of fixed
assets as a result of the  restructuring  of $1.3 million and  depreciation  and
amortization  of fixed assets of $3.6  million.  Increases in deposits and other
assets,  account  payable,  offset by  accounts  receivable,  security  deposits
payable and deferred revenue contributed to the cash used in operations in 2000.
In 1999,  the  non-cash  items  included  amortization  of  intangibles  of $3.1
million,  amortization of deferred compensation of $1.3 million and depreciation
and  amortization  of  fixed  assets  of $1.8  million.  Increases  in  accounts
receivable and deposits,  partially  offset by increases in accounts payable and
accrued expenses, also contributed to the cash used in operations in 1999.

     Net cash provided by investing  activities  was $34.6 million in 2000,  and
net cash used in  investing  activities  was  $74.3  million  in 1999.  Net cash
provided by investing  activities  in 2000  primarily  consisted of the sale of
short-term investments,  offset by purchases of equipment and furniture, website
development  costs,  and the  investment  in a joint  venture.  Net cash used in
investing  activities in 1999 primarily  consisted of the purchase of short-term
investments with the proceeds from the issuances of preferred and common stock.

     Net cash  provided by  financing  activities  was $2.8  million in 2000 and
$124.0  million in 1999. In 2000,  net cash  provided by financing  consisted of
proceeds  from stock  options and the employee  stock  purchase  plan.  Net cash
provided by


                                    -23-
<PAGE>

financing  activities  during 1999 primarily  consisted of net proceeds of $56.3
million from the issuance of preferred  stock,  offset by the repayment of $19.3
million in borrowings under the line of credit and net proceeds of $89.6 million
from the public offering of common stock.

     In September 2000, InsWeb signed a 10-year lease agreement through 2010 for
additional   office  space  in  the  Sacramento  area  to  house  its  corporate
headquarters and agency operations. InsWeb expects to incur additional costs for
leasehold  improvements  and furniture and equipment  associated with this lease
through the second quarter of 2001. In December 2000, InsWeb subleased a portion
of its Redwood City operating facilities and expects to sublease the rest during
fiscal 2001,  and expects  revenue from existing and future  subleases to offset
its ongoing  lease  obligation  related to the  Redwood  City  facility.  Future
minimum lease payments under the Sacramento lease are $10.6 million for the term
of the lease.

     In addition,  under various marketing  agreements with its online partners,
InsWeb is obligated to make minimum  payments  totaling  $31.5  million  through
various dates ending in 2005.

     InsWeb currently anticipates that its balances of cash and cash equivalents
and short-term investments, together with cash generated by its operations, will
be sufficient to meet its anticipated cash needs for working capital and capital
expenditures  for at  least  the  next  12  months.  Although  InsWeb  does  not
anticipate  the  need  for  additional  financing,   we  nevertheless  may  need
additional  funds to meet all of InsWeb's  anticipated  operating  needs,  or to
expand business internally or through acquisition. InsWeb cannot be certain that
additional  financing will be available when required,  on favorable terms or at
all. If InsWeb is not successful in raising additional capital as required,  its
business could be materially harmed. If additional funds were raised through the
issuance of equity securities, the percentage ownership of InsWeb's then-current
stockholders would be reduced.

RECENT ACCOUNTING PRONOUNCEMENTS

     In June 1998, the Financial  Accounting Standards Board issued Statement of
Financial Accounting Standard No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND
HEDGING  ACTIVITIES,  or SFAS No. 133. SFAS No. 133  establishes  accounting and
reporting standards for derivative instruments and hedging activities.  SFAS No.
133 is effective for fiscal years beginning after June 15, 2000. The adoption of
SFAS No.  133 in 2001 is not  expected  to have a  material  effect on  InsWeb's
results of operations or financial condition.

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  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 the preferred  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 or
          our insurance agency;


                                    -24-
<PAGE>

     -    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

     Given planned investment levels, our ability to achieve  profitability will
depend upon our ability to generate and sustain increased revenues. As a result,
we believe that we will incur  significant  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 $53.6
million for the year ended  December  31, 2000.  As of December  31,  2000,  our
accumulated  deficit was $125.3  million.  Although we  experienced  significant
revenue  growth in earlier  periods,  this  growth rate is not  sustainable  and
revenues may decrease from comparable prior year periods.  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,  or if our profitability is
delayed  we may 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


                                    -25-
<PAGE>

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
          underwriting 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.

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 A  SIGNIFICANT  PORTION 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 75% of total revenues in
the year ended  December 31, 1998,  approximately  78% of total  revenues in the
year ended  December 31, 1999 and  approximately  69% in the year ended December
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


                                    -26-
<PAGE>

     A  growing  number of  websites  offer  services  that are  similar  to and
competitive  with the  services  offered  on our online  insurance  marketplace.
Therefore,  a  positive  recognition  of our  brand is  critical  to  attracting
additional  consumers  to our  website,  strengthening  our  relationships  with
participating  insurance  companies and attracting new insurance  companies.  In
order to attract and retain consumers and insurance companies and to promote and
maintain  our  brand,  through  the first  quarter  of 2000,  we  increased  our
financial  commitment to creating and  maintaining  prominent  brand  awareness.
Beginning in the second quarter of 2000, our consumer marketing program has been
reduced and currently  consists of the  maintenance  of certain  network  online
relationships,  and other selective cost effective marketing 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  activities  on behalf of an increased  number 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; and

     -    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.
In addition, 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


                                    -27-
<PAGE>

     -    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 OR OUR INSURANCE AGENCY 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 maintain a positive recognition of our brand depends in part
on the  quality  of  the  products  and  services  consumers  receive  from  our
participating  insurance  companies or our insurance  agency,  including  timely
response  to  requests  for  quotes or  coverage.  If we are  unable to  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 to
increase  responsiveness  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.

OUR  PLAN  TO  EXPAND  OUR  ONLINE  INSURANCE  AGENCY  OPERATIONS  WILL  REQUIRE
SIGNIFICANT  RESOURCES AND WE MAY NOT BE ABLE TO GENERATE SUFFICIENT REVENUES TO
RECOVER OUR EXPENSES

Since  October  1999,  InsWeb  has been  operating  an online  insurance  agency
business in California.  Our online agency receives a commission on the sale and
renewal of the automobile insurance polices sold though its offices. Our plan to
expand our online agency  operations  requires that we attract and retain highly
skilled sales agents and customer care personnel.  We will face competition from
other agencies and insurance  companies for these agents.  In addition,  we will
need  additional  carriers  to  appoint  us as an agent and pay us  commissions.
Although  the  agency  infrastructure  is  already  in  place,   integration  of
additional  carriers into our online agency operations may take more time and be
more expensive than we project. If we are unable to implement our expansion in a
timely and  cost-effective  manner,  we may not be able to recover our costs and
our business will be harmed.


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, AIG, and GE Financial Assurance
accounted for approximately 14%, 11% and 9%,  respectively,  of our revenues for
the year ended December 31, 2000. Effective May 1, 2000, State Farm is no longer
participating  in  InsWeb's  marketplaces  for  auto,  term  life,   homeowners,
condominium  and  renters  insurance.  As a result of State  Farm's  withdrawal,
revenues  for  the  second   quarter  of  2000  from  State  Farm   declined  to
approximately  15% of  total  revenues,  and no  revenue  from  State  Farm  was
recognized for the third and fourth  quarter of 2000.  Should one or more of our
other  key  insurance  company  partners  cease  to  participate  in our  online
marketplace,  change its underwriting  criteria or geographic  coverage in a way
that  reduces the  proportion  of  consumers  that are offered  quotes from that
insurance company, or suffer a significant decline in its ratings, 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.  Although InsWeb  continually seeks new carriers to
participate in the online marketplace, we may be unable 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


                                    -28-
<PAGE>

     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 a significant
number  of  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 one 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  three  or  fewer  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.  At December 31, 2001, there were 17 jurisdictions in which
three or fewer insurance companies were offering automobile  insurance quotes on
our online  marketplace.  No  automobile  insurance  quotes are available in New
Jersey,  and as of December 31, 2000,  there were eight  jurisdictions  in which
only  one  insurance  company  is  offering  automobile  quotes  on  our  online
marketplace.  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.

     In addition,  we believe that there is a general trend toward consolidation
in the insurance  industry.  For example,  in the first quarter of 2000,  Kemper
Direct  acquired  the personal  lines  business of Reliance  Direct,  one of our
participating insurance companies. 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.   To  develop
company-sponsored  quotes for consumers,  the  integration  requires  either the
development  of a customized  interface  with the carrier's  own rating  system,
accessing a third party rating  engine of the  carrier's  choice,  or adding the
carrier's rating information into InsWeb's  proprietary  rating engines.  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.


                                    -29-
<PAGE>

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.

     We have entered into exclusive  arrangements with Yahoo! Inc. and MSN under
which our website is the exclusive insurance site included in their website, and
a significant  marketing  agreement  with AOL. For the years ended  December 31,
2000 and 1999, we received  approximately 24.5% and 10.1% of our website traffic
from these online relationships, respectively, and approximately 47.5% and 33.7%
of our traffic from all of our online relationships combined,  respectively.  In
January 2001 we entered into an agreement with Intuit,  Inc by which InsWeb will
serve as the exclusive  aggregator  of online  consumer  insurance  services for
Quicken.com(R),  QuickenInsurance and certain Quicken consumer desktop products.
Our ability to increase our revenues will depend,  in part, on increased traffic
to our  website  that we expect to generate  through  these  significant  online
relationships.

     Our relationships with online companies  typically have a 12-month term and
do not provide us with automatic renewal rights upon  termination.  In addition,
these  agreements  are  typically  terminable  by either party on 30 to 90 days'
notice.  We may not be able to  negotiate  or renew  marketing  agreements  with
online   companies  on  terms  that  are  acceptable  to  us.  The  termination,
non-renewal  or renewal on  unfavorable  terms of a  relationship  from which we
generate   significant   traffic  to  our  website   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.


                                    -30-
<PAGE>

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.

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 at both the
federal and state  levels that would limit the uses of  personally  identifiable
information  of Internet users  gathered  online or require  online  services to
establish  privacy  policies.  In addition,  the Federal  Trade  Commission  has
adopted  regulations  affecting the  information  gathering  practices of online
companies,  and it has brought suit against  several high profile  companies for
failing to adhere to the privacy  policies posted on their websites.  Many state
insurance  codes  limit  the  collection  and  use of  personal  information  by
insurance  companies,  agents,  or insurance service  organizations.  Failure to
adhere to the growing body of privacy regulations could result in administrative
actions or private litigation and harm our business.

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.


                                    -31-
<PAGE>

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 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 Gold
River,  California.  A full backup system is located in Irvine,  California.  If
both of these  locations  experienced a system  failure,  the performance of our
website would be harmed.  These systems are also vulnerable to damage from fire,
power  loss,  telecommunications  failures,  break-ins,  natural  disasters  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  underwriting  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.
Moreover, the malfunction could cause the carrier to dispute the number of leads
it  received  from  InsWeb.  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 REDUCTION IN FORCE AND PLANNED FUTURE GROWTH 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 that placed a strain on our administrative,  operational and financial
resources and increased demands on our systems and controls.  As a result of our
restructuring  plans,  however,  our  workforce  declined by  approximately  52%
between April 2000 and December 31, 2000. This reduction has occurred  through a
combination of InsWeb initiated terminations and voluntary resignations.  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.


                                    -32-
<PAGE>

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 and Chief Executive Officer; and Mark
P. Guthrie,  our 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 permanent 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, InsWeb granted stock options as incentives to executive
officers  and new  employees,  including  Mr.  Guthrie,  and  certain  other key
personnel.  As the value of these incentives are highly dependent on an increase
in the market  price of our common  stock,  we may be unable to retain  such key
employees, nor retain or recruit other officers and key employees in the future.

BECAUSE OF INTENSE  COMPETITION FOR 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.  As competition  for
personnel is intense,  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 may experience in the future,  difficulty
in hiring and retaining employees with appropriate qualifications.

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.

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


                                    -33-
<PAGE>

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 December 31, 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 other 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  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,  and $1.4  million to software  and other  intangible  assets.  In the
second  quarter of 2000,  we wrote off the  remainder of the  goodwill  from the
Benelytics acquisition.

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,  Japan,  France,  Germany,
South  Korea,  Japan 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


                                    -34-
<PAGE>

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 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 HAS FLUCTUATED  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.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE 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
impacted 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 all of our funds are invested in instruments
with  maturities  currently less than one year.  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 December
31, 2000:


                                    -35-
<PAGE>

<TABLE>
<CAPTION>

                                                 2001
                                                -----
(In thousands, except interest rates)
<S>                                        <C>
Cash and equivalents ...................   $   24,795
Average interest rate ..................        6.24%
Investments ............................   $   26,331
Average interest rate ..................        6.67%
Total investment securities ............   $   51,126
  Average interest rate ................        6.47%
</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
December 31, 2000, a near-term 10%  appreciation or  depreciation  would have an
immaterial affect on InsWeb's operating results or financial condition.

ITEM 8.  CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

     The report of Independent  Accountants,  Consolidated  Financial Statements
and Notes to Consolidated Financial Statements follow below on pages 37-62.


                                    -36-
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS



TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF
INSWEB CORPORATION:

     In our  opinion,  the  accompanying  consolidated  balance  sheets  and the
related  consolidated  statements of operations,  of stockholders' equity and of
cash flows present fairly, in all material  respects,  the financial position of
InsWeb Corporation and Subsidiaries  (InsWeb) at December 31, 2000 and 1999, and
the  results of their  operations  and of their cash flows for each of the three
years in the period ended  December  31, 2000,  in  conformity  with  accounting
principles  generally accepted in the United States of America.  These financial
statements are the responsibility of InsWeb's management;  our responsibility is
to express an opinion on these  financial  statements  based on our  audits.  We
conducted our audits of these  statements in accordance with auditing  standards
generally  accepted in the United  States of America  which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements,  assessing the accounting  principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 3 to the financial  statements,  effective January 1, 2000,
InsWeb  adopted the  provisions of Staff  Accounting  Bulletin No. 101,  REVENUE
RECOGNITION.


/s/ PricewaterhouseCoopers LLP
  Sacramento, California
  January 31, 2001, except for Notes 11 and 19,
   for which the date is March 30, 2001


                                    -37-
<PAGE>

                       INSWEB CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>

                                                                                      DECEMBER 31,
                                                                                 --------------------
                                                                                  2000          1999
                                                                                  ----          ----
<S>                                                                            <C>         <C>
ASSETS
Current assets:
  Cash and cash equivalents ................................................   $  24,795    $  25,689
  Short-term investments ...................................................      26,331       64,063
                                                                                 --------------------

     Total cash, cash equivalents and short-term investments ...............      51,126       89,752
  Accounts receivable, net of allowance of $135 and $142 ...................       2,935        4,268
  Prepaid expenses and other current assets ................................       3,852        2,974
                                                                                 --------------------

     Total current assets ..................................................      57,913       96,994
Property and equipment, net ................................................       8,666        7,357
Investment in joint venture ................................................       1,908        1,449
Long-term investments in securities ........................................        --          4,979
Intangible assets, net of accumulated amortization of $0 and $3,129 ........        --          5,568
Deposits and other assets ..................................................       3,318        1,934
Capitalized website development costs, net .................................       1,203         --
                                                                                 --------------------
     Total assets ..........................................................   $  73,008    $ 118,281
                                                                                 ====================

LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
  Accounts payable .........................................................   $   1,010    $   2,108
  Accrued expenses .........................................................       2,036        3,072
  Deferred revenue .........................................................       3,124          183
  Restructuring accrual ....................................................          86         --
                                                                                 --------------------
     Total current liabilities .............................................       6,256        5,363
Note payable to strategic partner ..........................................       1,312        1,464
Tenant security deposits ...................................................       1,020           60
Other liabilities ..........................................................         536          209
                                                                                 --------------------
     Total liabilities .....................................................       9,124        7,096
                                                                                 --------------------
Commitments and contingencies (Notes 9, 11 and 19)

Stockholders' equity:
Convertible preferred stock, $0.001 par value. Authorized: 5,000 shares.  No
  shares issued or outstanding in 2000 and 1999  ...........................        --           --
Common stock, $0.001 par value. Authorized: 150,000; Issued and outstanding:
  35,273 shares in 2000 and 34,743 shares in 1999 ..........................          35           35
Paid-in capital ............................................................     189,356      188,223
Common stock warrants ......................................................         113          113
Deferred stock compensation ................................................        (309)      (2,888)
Accumulated other comprehensive (loss) income ..............................         (53)         113

Accumulated deficit ........................................................    (125,258)     (74,411)
                                                                                 --------------------

     Total stockholders' equity ............................................      63,884      111,185
                                                                                 --------------------

     Total liabilities and stockholders' equity ............................   $  73,008    $ 118,281
                                                                                 ====================

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

</TABLE>


                                    -38-
<PAGE>
                       INSWEB CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>

                                                                     FOR THE YEARS ENDED DECEMBER 31,
                                                                     2000       1999        1998
                                                                     ----       ----        ----
Revenues:
<S>                                                                  <C>         <C>         <C>
  Transaction fees................................................   $19,561     $19,138     $3,151
  Development and maintenance fees................................     3,598       2,674        789
  Other revenues..................................................        51          29        370
                                                                    --------------------------------
      Total revenues..............................................    23,210      21,841      4,310
                                                                    --------------------------------
Operating expenses:
  Product development.............................................     8,690       8,871     10,077
  Sales and marketing.............................................    38,248      33,477      8,954
  General and administrative......................................    21,179      13,474      6,640
  Amortization of intangible assets...............................     1,150       3,129          -
  Amortization of stock-based compensation........................       912       1,272        540
  Impairment of goodwill and other intangibles....................     4,418           -          -
  Restructuring charge............................................     2,167           -          -
                                                                    --------------------------------
      Total operating expenses....................................    76,764      60,223     26,211
                                                                    --------------------------------
         Loss from operations.....................................  (53,554)    (38,382)   (21,901)
Other income (expense), net.......................................        56       (166)        600
Interest income (expense), net....................................     4,286       2,347    (1,189)
                                                                    --------------------------------
         Loss before cumulative effect of a change in accounting
         principle................................................  (49,212)    (36,201)   (22,490)

Cumulative effect of a change in accounting principle.............   (1,635)           -          -
                                                                    --------------------------------
         Net loss................................................. $(50,847)   $(36,201)  $(22,490)
                                                                    ================================
Net loss per share--basic and diluted:
Loss before cumulative effect of a change in accounting
principle.........................................................   $(1.40)     $(1.52)    $(1.52)
Cumulative effect of a change in accounting principle.............    (0.05)           -          -
                                                                    --------------------------------

Net loss per share--basic and diluted.............................   $(1.45)     $(1.52)    $(1.52)
                                                                    ================================
Weighted average shares used in computing net loss per
   share--basic and diluted.......................................   35,143      23,864     14,813
                                                                    ================================
Proforma   amounts   reflecting  the  adoption
  of  SAB  101  (Note  3)  applied retroactively:
   Net loss                                                        $(49,212)   $(37,195)  $(22,817)
                                                                    ================================

   Net loss per share--basic and diluted..........................   $(1.40)     $(1.56)    $(1.54)
                                                                    ================================
</TABLE>

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


                                    -39-
<PAGE>

                     INSWEB CORPORATION AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                         CONVERTIBLE PREFERRED
                                                                 STOCK                COMMON STOCK
                                                        ------------------------ -----------------------
(IN THOUSANDS)                                                                                              PAID-IN
                                                          SHARES       AMOUNT      SHARES      AMOUNT       CAPITAL
                                                        ------------ ----------- ------------ ---------- ---------------
<S>                                                     <C>          <C>         <C>          <C>        <C>
Balances, December 31, 1997 .......................             443         $ 1       14,611        $15         $19,503
Issuance of preferred stock for cash and receivable,
   net of $1,649 in issuance costs.................             190           -                                  29,398
Issuance of common stock for acquisition...........                                      909          1           8,388
Issuance of common stock warrants in connection with
   acquisition.....................................
Exercise of stock options..........................                                      420          -             568
Deferred stock compensation........................                                                               1,618
Amortization of deferred stock compensation
Net loss...........................................
                                                        ------------ ----------- ------------ ---------- ---------------
Balances, December 31, 1998........................             633           1       15,940         16          59,475
Issuance of preferred stock for cash and receivable,
   net of $71 in issuance costs....................             186           -                                  34,929
Issuance of common stock for cash..................                                       32          -             297
Issuance of common stock in initial public offering,
   net.............................................                                    5,750          6          89,549
Conversion of preferred shares to common shares
   related to initial public offering..............           (819)         (1)       12,287         12            (11)
Deferred stock compensation........................                                                               2,347
Amortization of deferred stock compensation
Exercise of stock options..........................                                      734          1           1,637
Comprehensive income(loss):
   Cumulative translation adjustment...............
   Unrealized loss on investments..................
   Net loss........................................
Comprehensive loss.................................
                                                        ------------ ----------- ------------ ---------- ---------------
Balances, December 31, 1999........................              --          --       34,743         35         188,223
Sales of shares through employee stock purchase plan
                                                                                         102          -             936
Deferred stock compensation........................                                                             (1,667)
Amortization of deferred stock compensation
Exercise of stock options..........................                                      428          -           1,864
Comprehensive income (loss):
   Cumulative translation adjustment...............
   Unrealized gain on investments..................
   Net loss........................................
Comprehensive loss.................................
                                                        ------------ ----------- ------------ ---------- ---------------
Balances, December 31, 2000........................              --           --      35,273        $35        $189,356
                                                        ============ =========== ============ ========== ===============


<CAPTION>
                                                                                               ACCUMULATED OTHER

(IN THOUSANDS)                                          COMMON STOCK     DEFERRED STOCK  COMPREHENSIVE   ACCUMULATED
                                                          WARRANTS        COMPENSATION   INCOME (LOSS)     DEFICIT         TOTAL
                                                        ---------------- -------------- --------------- ------------- -----------
<S>                                                     <C>              <C>            <C>             <C>           <C>
Balances, December 31, 1997 .......................                  --         $(736)             --     $(15,720)      $3,063
Issuance of preferred stock for cash and receivable,
   net of $1,649 in issuance costs.................                                                                       29,398
Issuance of common stock for acquisition...........                                                                        8,389
Issuance of common stock warrants in connection with
   acquisition.....................................                 113                                                      113
Exercise of stock options..........................                                                                          568
Deferred stock compensation........................                            (1,618)                                         -
Amortization of deferred stock compensation                                        541                                       541
Net loss...........................................                                                         (22,490)    (22,490)
                                                        ---------------- -------------- --------------- ------------- -----------
Balances, December 31, 1998........................                 113        (1,813)              --      (38,210)      19,582
Issuance of preferred stock for cash and receivable,
   net of $71 in issuance costs....................                                                                       34,929
Issuance of common stock for cash..................                                                                          297
Issuance of common stock in initial public offering,
   net.............................................                                                                       89,555
Conversion of preferred shares to common shares
   related to initial public offering..............                                                                            -
Deferred stock compensation........................                            (2,347)                                         -
Amortization of deferred stock compensation                                      1,272                                     1,272
Exercise of stock options..........................                                                                        1,638
Comprehensive income(loss):
   Cumulative translation adjustment...............                                                155                       155
   Unrealized loss on investments..................                                               (42)                      (42)
   Net loss........................................                                                         (36,201)    (36,201)
                                                                                                                      ===========
Comprehensive loss.................................                                                                     (36,088)
                                                        ---------------- -------------- --------------- ------------- -----------
Balances, December 31, 1999........................                 113        (2,888)             113      (74,411)     111,185
Sales of shares through employee stock purchase plan
                                                                                                                             936
Deferred stock compensation........................                              1,667                                         -
Amortization of deferred stock compensation                                        912                                       912
Exercise of stock options..........................                                                                        1,864
Comprehensive income (loss):
   Cumulative translation adjustment...............                                              (201)                     (201)
   Unrealized gain on investments..................                                                 35                        35
   Net loss........................................                                                         (50,847)    (50,847)
                                                                                                                      -----------
                                                                                                                      -----------
Comprehensive loss.................................                                                                     (50,013)
                                                        ---------------- -------------- --------------- ------------- -----------
Balances, December 31, 2000........................                $113         $(309)           $(53)    $(125,258)     $63,884
                                                        ================ ============== =============== ============= ===========
</TABLE>


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


                                    -40-
<PAGE>



                       INSWEB CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                      FOR THE YEARS ENDED DECEMBER 31,
                                                                                  ------------------------------------
                                                                                      2000         1999         1998
                                                                                      ----         ----         ----
Cash flows from operating activities:
<S>                                                                               <C>          <C>          <C>
  Net loss ....................................................................   $ (50,847)   $ (36,201)   $ (22,490)
  Adjustments to reconcile net loss to net cash used in operating activities:
     Depreciation and amortization ............................................       3,631        1,813          985
     Amortization of stock-based compensation .................................         912        1,272          540
     Write-down of fixed assets included in restructuring charge ..............       1,269         --           --
     Amortization of intangible assets ........................................       1,150        3,129         --
     Foreign currency translation (gain) loss on note payable to strategic
     partner ..................................................................        (152)         158         --
     Equity loss from joint venture ...........................................          48           12         --
     Loss on disposal of equipment ............................................          41            3
     Impairment of goodwill ...................................................       4,418         --           --
     Loss on software license .................................................        --           --          5,450
     Income from sale of property and casualty agents business ................        --           --           (650)
     Revenue from software license agreement ..................................        --           --           (350)
     Non compete agreement expense ............................................        --           --             50
     Cumulative effect of a change in accounting principle ....................       1,635         --           --
   Changes in operating assets and liabilities:
     Accounts receivable ......................................................       1,333       (3,076)      (1,054)
     Prepaid expenses and other current assets ................................        (878)      (2,320)        (560)
     Deposits and other assets ................................................      (1,384)        (544)      (1,366)
     Accounts payable .........................................................      (1,098)       1,140          689
     Accrued expenses .........................................................      (1,036)       2,045          594
     Deferred revenue .........................................................       1,306          (44)         153
     Restructuring accrual ....................................................          86         --           --
     Tenant security deposit ..................................................         960           60
     Other liabilities ........................................................         327          209         --
     Interest received on note receivable from officers .......................        --           --             68
     Interest paid on note payable to officer .................................        --           --            (68)
                                                                                  ------------------------------------
       Net cash used in operating activities ..................................     (38,279)     (32,344)     (18,009)
                                                                                  ------------------------------------
Cash flows from investing activities:
  Redemptions (purchases) of short term investments, net ......................      42,745      (64,105)        --
  Purchases of held to maturity securities ....................................        --         (4,979)        --
  Proceeds from sale of property and equipment ................................          14           15           35
  Purchases of property and equipment .........................................      (6,223)      (5,190)      (3,973)
  Capitalized website development costs .......................................      (1,245)        --           --
  Investment in joint venture .................................................        (708)        --           --
  Cash acquired in acquisition ................................................        --           --             17
                                                                                 ------------------------------------
       Net cash provided by (used in) investing activities ....................      34,583      (74,259)      (3,921)
                                                                                 ------------------------------------
Cash flows from financing activities:
  Proceeds from issuance of preferred stock, net ..............................        --         56,280        8,048
  Proceeds from initial public offering of common stock, net ..................        --         89,555         --
  Proceeds from issuance of common stock ......................................        --            297         --
  Proceeds from sales of shares through stock plans ...........................       2,800        1,638          569
  Issuance of notes receivable from officer ...................................        --           --         (4,000)
  Proceeds from repayment of notes receivable from officer ....................        --           --          5,525


                                    -41-
<PAGE>

  Payment to former Series B stockholder ......................................        --         (4,500)        --
  Payment of note payable to officer ..........................................        --            (25)      (1,525)
  Proceeds from line of credit from affiliate .................................        --           --         23,290
  Payments on line of credit from affiliate ...................................        --        (19,290)      (4,000)
       Net cash provided by financing activities ..............................       2,800      123,955       27,907
                                                                                  ------------------------------------
Net (decrease) increase in cash and cash equivalents ..........................        (896)      17,352       (5,977)
Cash and cash equivalents, beginning of period ................................      25,689        8,337        2,360
                                                                                  ------------------------------------
Cash and cash equivalents, end of period ......................................   $  24,795    $  25,689    $   8,337
                                                                                  ====================================
Supplemental disclosure of cash activities:
  Cash paid during the period for interest ....................................   $      87    $   1,229    $     794
                                                                                  ====================================
Supplemental schedule of noncash financing activities:
Deferred stock compensation from issuance of options ..........................         $--    $   2,347    $   1,618
                                                                                  ====================================
Note payable to strategic partner for initial investment in joint venture .....         $--          $--    $   2,089
                                                                                  ====================================
Proceeds from sale of a portion of investment in joint venture used to reduce
  note payable to the strategic partner .......................................         $--    $     783          $--
                                                                                  ====================================
Issuance of common stock for acquisition of Benelytics, Inc. ..................         $--          $--    $   8,389
                                                                                  ====================================
Issuance of common stock warrants in connection with acquisition of Benelytics,
  Inc .........................................................................         $--          $--    $     113
                                                                                  ====================================
Receivable for sale of preferred stock ........................................         $--          $--    $  22,999
                                                                                  ====================================
Preferred stock issuance costs accrued but not paid ...........................         $--          $--    $   1,649
                                                                                  ====================================
Conversion of preferred stock to common stock .................................         $--    $       1          $--
                                                                                  ====================================
</TABLE>

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


                                    -42-
<PAGE>

                       INSWEB CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  BUSINESS OF INSWEB

     InsWeb Corporation,  formerly Strategic Concepts Corporation (InsWeb),  was
incorporated in the State of California on February 28, 1995 to provide, through
InsWeb's   website,   a  centralized   interactive   marketplace  for  insurance
information   and   electronic   quotation.   In  November   1996,   InsWeb  was
re-incorporated as a Delaware corporation.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     BASIS OF PRESENTATION

     The consolidated  financial  statements  include the accounts of InsWeb and
its wholly-owned subsidiaries,  InsWeb Insurance Services, Inc. (formerly Avatar
Insurance Services, Inc.) and Benelytics, Inc. Benelytics, Inc. was purchased on
December  31,  1998,  and  the  acquisition  was  accounted  for as a  purchase.
Accordingly,  the results of operations of  Benelytics,  Inc. for the year ended
December 31, 1998 are not included in the consolidated financial statements. 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.

     CASH AND CASH EQUIVALENTS

     InsWeb  considers all highly liquid  investments  with  maturities of three
months or less at the date of  purchase  to be cash  equivalents.  Cash and cash
equivalents are stated at cost, which approximates market.

     INVESTMENTS IN SECURITIES

     InsWeb accounts for its short-term investments under Statement of Financial
Accounting Standards No. 115 (SFAS No. 115),  ACCOUNTING FOR CERTAIN INVESTMENTS
IN DEBT AND EQUITY  SECURITIES.  SFAS No. 115  requires  the  classification  of
investments in debt and equity securities with readily determined fair values as
"held-to-maturity,"  "available-for-sale,"  or "trading."  Management determines
the appropriate  classification of its debt and equity securities at the time of
purchase  and  reevaluates  such  designation  as of each  balance  sheet  date.
Securities  are  classified  as  held-to-maturity  when InsWeb has the  positive
intent and ability to hold the securities to maturity.  Securities classified as
held-to-maturity   are  carried  at  amortized  cost,   which  is  adjusted  for
amortization   of  premiums  and  accretion  of  discounts  to  maturity.   Such
amortization  is included in  interest  income.  Securities  not  classified  as
held-to-maturity  are classified as  available-for-sale  and are carried at fair
value based on quoted market prices,  with unrealized  gains and losses reported
as a component of other comprehensive income (loss) in stockholders' equity. The
cost of securities sold is based on the specific identification method.

     FAIR VALUE OF FINANCIAL INSTRUMENTS

     The  carrying  amounts  of  certain  of  InsWeb's  financial   instruments,
including  cash  and  cash   equivalents,   short-term   investments,   accounts
receivable, accounts payable and accrued expenses, approximate fair value due to
their short maturities.  In addition, the carrying amount of the note payable to
the  strategic  partner is not  estimable due to the related party nature of the
note payable.

     REVENUE RECOGNITION

     Transaction  fee revenue from qualified  consumer leads is recognized  when
such lead is delivered to an insurance  company  customer,  and from commissions
upon  the  sale  of an  insurance  policy  through  InsWeb  Insurance  Services.
Transaction  fees  that  are  contingent  on the  delivery  of  certain  minimum
clickthroughs  are deferred until all contingencies  have been met.  Maintenance
revenue is  recognized  ratably over the term of the customer  agreement.  Other
revenue represents revenue from operating activities,  which are nonrecurring in
nature  and is  recognized  when the  service  is  performed  and no  additional
significant  obligations  exist.  Deferred  revenue  represents  prepayment  for
services to be rendered in the future.


                                    -43-
<PAGE>

     Prior to January 1, 2000,  InsWeb  recognized  development fee revenue from
the design and development of customized  interfaces  when the development  work
was completed and the insurance company's  integration with InsWeb's site became
operational  ("Live  Date").  As a result of the  adoption  of Staff  Accounting
Bulletin No. 101, REVENUE  RECOGNITION,  (SAB 101), discussed further in Note 3,
effective  January 1, 2000,  development  fee revenue is deferred until the Live
Date,  and then  recognized  ratably  over  the  estimated  life of the  carrier
relationship, typically three years.

     WEBSITE DEVELOPMENT COSTS

     Prior to July 1, 2000, website development costs were expensed as incurred.
Effective July 1, 2000,  InsWeb  implemented  the provisions of Emerging  Issues
Task Force Issue No. 00-02,  ACCOUNTING FOR WEB SITE  DEVELOPMENT  COSTS,  (EITF
00-02),  which  provides  guidance on accounting  for costs incurred to develop,
enhance,  and  upgrade  a  website.  The  consensus  is  effective  for  website
development costs incurred in quarters beginning after June 30, 2000. During the
year ended December 31, 2000,  InsWeb  capitalized  $1,203,000 in costs,  net of
amortization  of $42,000,  relating to the upgrade and  enhancement  of InsWeb's
website.  All other development costs, not qualifying for  capitalization  under
EITF Issue No. 00-02, are expensed as incurred.  Amounts  capitalized under this
standard are amortized over the estimated useful life of the related upgrade and
enhancement, typically three years.

     ONLINE MARKETING FEES

     InsWeb enters into  marketing  agreements  requiring  revenue  sharing from
transaction  fees,  fixed fee  payments or per unit based  charges  with various
participating  online  companies.  Revenue  sharing  from  transaction  fees are
expensed in the period the related  qualified  consumer  lead is delivered to an
insurance company customer. Fixed fee payments are capitalized,  and expensed on
a  straight-line  basis  over the term of the  agreement,  or  ratably  based on
delivery of the specified consumer traffic targets.

     ADVERTISING COSTS

     Costs related to advertising and promotion of products are charged to sales
and marketing expense as incurred.  Advertising costs charged to expense for the
years ended December 31, 2000,  1999 and 1998 were  $9,982,000,  $13,040,000 and
$2,338,000, respectively.

     INCOME TAXES

     Deferred tax assets and liabilities are determined  based on the difference
between the financial  statement and tax bases of assets and  liabilities  using
enacted tax rates in effect for the year in which the  differences  are expected
to affect taxable income. Valuation allowances are established when necessary to
reduce deferred tax assets to the amounts expected to be realized.

     PROPERTY AND EQUIPMENT

     Property and  equipment are stated at cost less  accumulated  depreciation.
Depreciation  on computer  and office  equipment,  furniture  and  fixtures  and
purchased  software  is  calculated  using  the  straight-line  method  over the
estimated useful lives of the assets, generally two to five years.  Amortization
on leasehold  improvements is calculated using the straight-line method over the
estimated  useful lives of the  improvements or the remaining life of the lease,
whichever  is shorter.  When  property  and  equipment  are retired or otherwise
disposed of, the cost and related accumulated  depreciation are removed from the
accounts and the  resulting  gain or loss is included in results of  operations.
Expenditures for maintenance and repairs are charged to expense as incurred.

     LONG-LIVED ASSETS

         InsWeb  evaluates  the  recoverability  of  its  long-lived  assets  in
accordance with SFAS No. 121, ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS
AND FOR LONG-LIVED  ASSETS TO BE DISPOSED OF. SFAS No. 121 requires  recognition
of


                                    -44-
<PAGE>

impairment  losses  related to  long-lived  assets in the event the net carrying
value of such assets exceeds the future  undiscounted cash flows attributable to
such assets. InsWeb assesses the impairment of its long-lived assets when events
or changes in circumstances indicate that the carrying value of an asset may not
be recoverable.

     INTANGIBLE ASSETS

     Intangible  assets are  recorded  at cost.  Amortization  is  provided on a
straight-line  method over the  estimated  useful  lives of the related  assets.
Purchased software, non-compete agreements,  assembled workforce and contractual
relationships  acquired  from  Benelytics,  Inc. were being  amortized  over the
estimated  useful  life  of  two  years.  Unidentified  assets  related  to  the
Benelytics,  Inc.  acquisition  allocated to goodwill were being  amortized over
three  years.  During the second  quarter  of 2000,  InsWeb  recorded a one-time
non-cash  write down of  $4,418,000  of goodwill  and other  intangible  assets,
including the assembled workforce and contractual  relationships associated with
the Benelytics, Inc. acquisition.

     DEPOSITS AND OTHER ASSETS

     Payments to  collateralize  certain lease  commitments and cash received to
collateralize  certain  sub-lease  agreements are included in deposits and other
assets.

     FOREIGN CURRENCY TRANSLATION

     The long-term note payable to strategic partner is translated from Japanese
yen into  U.S.  dollars  in  accordance  with  SFAS  No.  52,  FOREIGN  CURRENCY
TRANSLATION.  Accordingly,  it is translated at the current  exchange rate as of
the applicable balance sheet date and the resulting foreign currency gain (loss)
is included in the  consolidated  statements of  operations.  The  investment in
InsWeb Japan K.K. is  translated  into U.S.  dollars at the  applicable  balance
sheet rate and the resulting  translation  adjustment is recorded in accumulated
other comprehensive income (loss), a separate component of stockholders' equity.

     CONCENTRATION OF CREDIT RISK

     Financial  instruments which potentially subject InsWeb to concentration of
credit  risk,  as defined  by SFAS No.  105,  DISCLOSURE  OF  INFORMATION  ABOUT
FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK AND FINANCIAL INSTRUMENTS WITH
CONCENTRATIONS  OF CREDIT RISK,  consist  principally of cash, cash equivalents,
short-term  investments  and accounts  receivable.  InsWeb deposits its cash and
cash  equivalents  with a single major bank,  which  deposits may exceed federal
deposit insurance limits.

     InsWeb's short- and long-term investments consist of diversified investment
grade  securities.  InsWeb's  investment  policy  limits  the  amount  of credit
exposure to  investments  in any one issue,  and InsWeb  believes no significant
concentration of credit risk exists with respect to these investments.

     InsWeb's customer base is dispersed across many different geographic areas,
and most customers are in a single industry in the United States.  Collection of
trade  receivables  may be affected  by changes in  economic  or other  industry
conditions and may,  accordingly,  impact InsWeb's  overall credit risk.  InsWeb
performs  ongoing  credit  evaluations  of its customers and generally  does not
require collateral.  InsWeb reviews the need for allowances for potential credit
losses; and reserves for potential credit losses are maintained.

     SIGNIFICANT CUSTOMERS

     For the year ended December 31, 2000, two customers accounted for 13.9% and
10.8% of total revenues.  For the year ended December 31, 1999,  three customers
accounted  for  30.8%,  11.3% and 11.2% of total  revenues.  For the year  ended
December 31, 1998, three customers accounted for 39.5%, 16.3% and 10.3% of total
revenues.  At December 31, 2000, two customers  accounted for 19.3% and 19.1% of
accounts receivable. At December 31, 1999, two customers accounted for 22.3% and
20.6% of accounts receivable.


                                    -45-
<PAGE>

     STOCK SPLITS

     All common share and per share amounts  reflect a 3-for-2 split  authorized
in June 1999. All common share and per common share amounts in the  accompanying
consolidated  financial statements have been restated to give retroactive effect
to the stock split for all periods presented. Prior to giving retroactive effect
to the June 1999 stock split, net loss per share - basis and diluted - was $2.28
for the year ended December 31, 1998.

     EARNINGS PER SHARE

     Basic earnings per share is computed  using the weighted  average number of
shares of common stock outstanding while 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.

     COMPREHENSIVE INCOME

     Effective  January 1, 1998,  InsWeb adopted the provisions of SFAS No. 130,
REPORTING  COMPREHENSIVE  INCOME. SFAS 130 requires items of other comprehensive
income  (loss)  be  classified,  net of  income  taxes,  by their  nature in the
financial  statements.  For InsWeb,  other comprehensive  income (loss) includes
primarily  foreign  currency  translation  adjustments and unrealized  losses on
investments.  Prior to December 31, 1998, accumulated other comprehensive income
was  not  significant.  The  change  in  the  components  of  accumulated  other
comprehensive income (loss), net of taxes, is summarized as follows:

<TABLE>
<CAPTION>

                                                 FOREIGN CURRENCY   UNREALIZED   ACCUMULATED OTHER
                                                   TRANSLATION      LOSSES ON     COMPREHENSIVE
                                                   ADJUSTMENTS     INVESTMENTS    INCOME (LOSS)
(IN THOUSANDS)
<S>                                                 <C>            <C>             <C>
Balance, December 31, 1998 ..................        $  --          $  --           $  --
Other comprehensive (loss) income ...........          155            (42)            113
                                                    ----------------------------------------------
Balance, December 31, 1999 ..................          155            (42)            113
Other comprehensive (loss) income ...........         (201)            35            (166)
                                                    ----------------------------------------------
Balance, December 31, 2000 ..................        $ (46)         $  (7)          $ (53)
                                                    ==============================================
</TABLE>



     STOCK-BASED COMPENSATION

     InsWeb  accounts for  stock-based  employee  compensation  arrangements  in
accordance with the provisions of Accounting Principles Board No. 25, ACCOUNTING
FOR STOCK ISSUED TO EMPLOYEES,  and complies with the  disclosure  provisions of
SFAS No.  123,  ACCOUNTING  FOR  STOCK-BASED  COMPENSATION.  Under  APB No.  25,
compensation expense is based on the difference,  if any, between the fair value
of InsWeb's stock and the exercise price of the option on the measurement  date,
which is typically the date of grant.

     InsWeb accounts for options granted to non-employees in accordance with the
provisions of SFAS No. 123 and under Emerging Issues Task Force Issue No. 96-18,
ACCOUNTING  FOR EQUITY  INSTRUMENTS  THAT ARE ISSUED TO OTHER THAN EMPLOYEES FOR
ACQUIRING,  OR IN  CONJUNCTION  WITH  SELLING  GOODS AND  SERVICES.  Under these
provisions, options are recorded at their fair value on the measurement date.

     RISKS AND UNCERTAINTIES

     InsWeb is subject to all of the risks  inherent in an early stage  business
in the electronic  commerce industry.  These risks include,  but are not limited
to, a limited operating history,  limited management resources,  dependence upon
consumer  acceptance of the Internet,  Internet  related  security risks and the
changing  nature  of the  electronic  commerce  industry.  Due to the  foregoing
factors, InsWeb's operating results may be materially affected.


                                    -46-
<PAGE>


     USE OF ESTIMATES

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

     RECENT ACCOUNTING PRONOUNCEMENTS

     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 is  effective  July 1, 2000.
This  interpretation   provides  guidance  for  applying  APB  Opinion  No.  25,
"Accounting for Stock Issued to Employees." InsWeb has adopted FIN No. 44, which
had no material impact on InsWeb's financial position,  results of operations or
cash flows.

     In June 1998,  the FASB  issued  SFAS No. 133,  ACCOUNTING  FOR  DERIVATIVE
INSTRUMENTS  AND HEDGING  ACTIVITIES.  SFAS No. 133  establishes  accounting and
reporting standards for derivative instruments and for hedging activities.  SFAS
No. 133 is effective for fiscal years  beginning  after June 15, 2000.  InsWeb's
adoption of SFAS No. 133 is not expected to not have material effect on InsWeb's
results of operations, financial condition or cash flows.

     RECLASSIFICATIONS

     Certain  amounts  in  the  prior  years'  financial  statements  have  been
reclassified   to  conform  to  the  December  31,  2000   presentation.   These
reclassifications did not change previously reported total assets,  liabilities,
stockholders' equity or net loss.

3.  CHANGE IN ACCOUNTING PRINCIPLE

     Effective  January 1, 2000, InsWeb changed its revenue  recognition  policy
for set-up fees,  which are included in  development  and  maintenance  fees, to
comply with SEC Staff Accounting Bulletin No. 101: REVENUE RECOGNITION. Prior to
this accounting change, InsWeb recognized revenue from set-up fees received from
a  participating  insurance  carrier when that  carrier's  integration  with the
InsWeb site became  operational  ("Live  Date") on  InsWeb's  marketplace.  As a
result of SAB 101, InsWeb continues to defer set-up revenue until the Live Date,
but has changed its revenue recognition policy from full recognition at the Live
Date to recognizing  the revenue  ratably over the estimated life of the carrier
relationship.  This accounting change results in a cumulative effect of a change
in  accounting  principle,  for  years  prior to  2000,  of  $1,635,000,  and is
reflected in the results for the year ended  December 31, 2000.  During the year
ended December 31, 2000,  $981,000 of the  cumulative  effect for years prior to
2000,  was  recognized  as revenue.  As a result of adopting  SAB 101,  the 2000
revenues  decreased and net loss increased by  approximately  $578,000 (or $0.02
per share).  The pro forma  amounts shown on the  statements of operations  have
been adjusted for the effect of retroactive application of SAB 101.


                                    -47-
<PAGE>


     The pro forma 1999 and 1998 amounts  below are provided to show what InsWeb
would  have  reported  if the new  accounting  policy had been in effect for the
fiscal 1999 and 1998 periods presented below.

<TABLE>
<CAPTION>

                                                        FOR THE YEAR
                                                     ENDED DECEMBER 31,
                                              ----------------------------------
(IN THOUSANDS EXCEPT FOR PER SHARE                        PRO FORMA   PRO FORMA
AMOUNTS)                                          2000        1999        1998
                                              ----------------------------------
<S>                                           <C>         <C>         <C>
Total revenues                                $ 23,210    $ 20,847    $  3,983
                                              ----------------------------------
Loss before cumulative effect of a change
in accounting principle                       ($49,212)   ($37,195)    (22,817)
                                              ----------------------------------
Cumulative effect of a change in accounting
principle                                       (1,635)       --          --
                                              ----------------------------------
Net loss                                      ($50,847)   ($37,195)   ($22,817)
                                              ----------------------------------
Net loss per share - basic and diluted        ($  1.45)   ($  1.56)   ($  1.54)
                                              ----------------------------------
Weighted average shares                         35,143      23,864      14,813
                                              ----------------------------------
</TABLE>

4.  CASH AND INVESTMENTS

     Cash and investments consist of the following:

<TABLE>
<CAPTION>
                                                                       DECEMBER 31,
                                                                    2000         1999
                                                                  -----------------------
(IN THOUSANDS)
Cash and cash equivalents:
<S>                                                                <C>        <C>
  Cash .........................................................   $ 1,155     $ 1,132
  Money market funds ...........................................     5,966      13,655
  Taxable municipal securities .................................     2,200       5,000
  Commercial paper .............................................    15,474       5,902
                                                                  -----------------------
                                                                    24,795      25,689
                                                                  -----------------------
Short-term investments:
 Available for sale:
  Certificates of deposit ......................................     4,000       1,500
  Commercial paper .............................................     3,540      62,563
  Taxable municipal securities .................................    13,800          --
 Held to maturity:
  U.S. Agency securities .......................................     4,991          --
                                                                  -----------------------
                                                                    26,331      64,063
                                                                  -----------------------
Cash, cash equivalents and short-term investments ..............   $51,126     $89,752
                                                                  =======================
Long-term investments--U.S. Agency securities (held to maturity)   $    --     $ 4,979
                                                                  =======================
</TABLE>

     At  December  31,  2000  and  1999,   the  carrying   value  of  short-term
available-for  sale securities are shown net of gross unrealized  (gains)/losses
of $(153,000)  and $42,000,  respectively,  which are included as a component of
stockholders' equity, and are attributable to InsWeb's investments in commercial
paper  and  other  debt  securities.  The  fair  value of all  other  short-term
securities  approximates cost due to the short maturities of these  instruments.
At December 31, 2000, all cash,  cash  equivalents  and  short-term  investments
mature in 2001.

     At December 31, 2000 and 1999,  the fair value of InsWeb's held to maturity
securities  was  $5,072,000  and  $4,947,000,  respectively,  and included gross
unrealized gains (losses) of $81,000 and ($32,000), respectively.


                                    -48-
<PAGE>

5.  PREPAID EXPENSES AND OTHER ASSETS

     Prepaid expenses and other assets consist of the following:

                                              DECEMBER 31,
(IN THOUSANDS)                              2000      1999
                                            ----      ----

Prepaid marketing fees .................   $2,740   $1,200
Prepaid insurance ......................      512      824
Prepaid rent ...........................       81      128
Interest receivable ....................      362      344
Other ..................................      157      478
                                         -----------------
                                           $3,852   $2,974
                                         =================

6.  PROPERTY AND EQUIPMENT

         Property and equipment consist of the following:

<TABLE>
<CAPTION>
                                                      DECEMBER 31,
(IN THOUSANDS)                                      2000         1999
                                                    ----         ----
<S>                                              <C>         <C>
Computer and office equipment ................   $  5,799    $  4,807
Furniture and fixtures .......................      1,885       1,666
Leasehold improvements .......................      2,619       2,326
Purchased software ...........................      3,973       1,510
Construction in progress .....................        595          66
                                                 -----------------------
                                                   14,871      10,375
Less accumulated depreciation and amortization     (6,205)     (3,018)
                                                 -----------------------
                                                 $  8,666    $  7,357
                                                 =======================
</TABLE>

     Depreciation and amortization expense was $3,589,000, $1,813,000 and
$985,000 for the years ended December 31, 2000, 1999 and 1998, respectively.

7.  INSWEB JAPAN

     In 1998,  InsWeb  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 InsWeb Japan K.K., a Japanese  corporation,  in
which InsWeb currently owns a 25% interest.  In conjunction with this agreement,
InsWeb also entered into an agreement in August 1999 to provide  consulting  and
hosting  services  to assist  InsWeb  Japan  K.K.  in  developing  its  Internet
strategy.  For the  years  ended  December  31,  2000 and 1999,  $1,414,000  and
$355,000  was billed  under this  contract,  respectively,  and is  included  in
development and maintenance fees. At December 31, 2000 and 1999, $0 and $171,000
of accounts  receivable,  respectively,  was due from InsWeb Japan,  K.K. Though
this agreement has not been terminated, InsWeb does not expect to provide future
consulting and hosting services to InsWeb Japan K.K.

     InsWeb's  initial  interest in InsWeb Japan K.K. was  purchased in exchange
for a promissory note payable to InsWeb's strategic partner. The promissory note
is  payable  in Yen and  accrues  interest  at 5% per  annum,  which is  payable
quarterly.  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 years ended December 31, 2000 and 1999, was
$70,000 and $43,000,  respectively. As of December 31, 2000 and 1999, $1,312,000
and $1,464,000 was outstanding under the note, respectively.

     On May 14, 1999, InsWeb sold a portion of its interest in InsWeb Japan K.K.
to a common stockholder for


                                    -49-
<PAGE>

$783,000.  As a result of this sale,  InsWeb's  interest  in this joint  venture
decreased  from 40% to 25%.  InsWeb used the proceeds from the sale to partially
repay the note payable to the strategic partner. In August 2000, InsWeb invested
an additional  $708,000 as part of an additional sale of capital stock by InsWeb
Japan K.K. As a result of this additional investment,  InsWeb maintained its 25%
interest in InsWeb Japan K.K.

8.  ACCRUED EXPENSES

     Accrued expenses consist of the following:

                                             DECEMBER 31,
(IN THOUSANDS)                             2000      1999
                                           ----      ----

Accrued employee compensation ..........   $  713   $1,439
Employee stock purchase plan ...........       50      796
Accrued retention bonuses ..............    1,064     --
Accrued fee sharing ....................      207      734
Other ..................................        2      103
                                          ----------------
                                           $2,036   $3,072
                                          ================
9.  RESTRUCTURING

     In May 2000, the Board of Directors  approved the restructuring of InsWeb's
operations in order to enhance operating efficiencies and to further develop its
agency  operations.  The  restructuring  plan  included  the closure of InsWeb's
facilities in Redwood City, San Carlos and Westlake Village,  California and Bel
Air,  Maryland,   the  relocation  of  InsWeb's  operations  to  the  Sacramento
California area, and the  discontinuance of certain strategic  initiatives.  The
plan contemplated a total of approximately 190 individuals leaving InsWeb across
all functions,  of which  approximately  180 have left InsWeb as of December 31,
2000. It is expected that the restructuring  plan will be completed in the first
quarter of 2001.

     In the second  quarter  of 2000,  InsWeb  recorded a related  restructuring
charge of $1.5 million.  The charge  consisted of employee  separation  costs of
$0.9  million,  asset  impairments  of $1.1  million,  other  exit costs of $0.5
million,  offset by a lease  termination fee of $1.0 million to be received as a
result of InsWeb's termination of its lease on their San Carlos facility. In the
third quarter of 2000, InsWeb recorded additional  restructuring charges of $0.6
million based on revisions to the  restructuring  plan. The charge  consisted of
additional employee separation costs of $0.1 million,  asset impairments of $0.2
million, and other exit costs,  primarily  representing future rent payments for
facilities being exited, of $0.3 million.

     The asset  impairments,  of $1.1  million,  expensed in the second  quarter
consisted  solely  of the  write-off  of  tenant  improvements  associated  with
InsWeb's facility in San Carlos,  California. As the approved restructuring plan
calls for the relocation of InsWeb's  corporate  headquarters  to the Sacramento
California  area,  InsWeb  assigned  its 12-year  lease to an  affiliate  of the
landlord of the  property in exchange  for a portion of the future  profits,  if
any,  associated with the releasing of this property through  September 2003 and
the  release of InsWeb's  letter of credit and  security  deposit.  As a result,
InsWeb  transferred  its  interest  in the tenant  improvements  it made to this
property, and wrote down the value to zero. Additionally, the landlord agreed to
pay to InsWeb a  termination  fee of $1.0  million,  if and when,  the  landlord
formally  terminated the lease with InsWeb and a portion of future  profits,  if
any,  upon the  landlord's  re-leasing of the  facility.  In October 2000,  this
facility was  re-leased  by the original  lessor,  and the  termination  fee was
collected in full.


                                    -50-
<PAGE>

Details of the restructuring charge are as follows (IN THOUSANDS):

<TABLE>
<CAPTION>

                                                 Employee      Write-down of
                                                Termination   Property, Plant
                                                 Benefits      and Equipment     Other      Total
------------------------------------------------------------------------------------------------------
<S>                                              <C>           <C>                 <C>     <C>
2000 restructuring charge
Original estimate (2nd Quarter) ..............   $      926    $    1,066          (464)   $    1,528
Change in estimate (3rd Quarter)..............           77           203           359           639
                                                 ----------    ----------    ----------    ----------
Total restructuring charge ...................   $    1,003    $    1,269    $     (105)   $    2,167

Write-down of assets to net realizable value..                     (1,269)                     (1,269)
Lease termination fee received ...............                                    1,000         1,000
Cash payments ................................       (1,003)         --            (809)       (1,812)
                                                 ----------    ----------    ----------    ----------
Restructuring accrual as of December 31, 2000.   $     --      $     --      $       86    $       86
                                                 ==========    ==========    ==========    ==========
</TABLE>

     In addition to the severance  costs included in the  restructuring  charge,
InsWeb also has accrued  retention  bonuses of  $1,064,000 at December 31, 2000.
$4,806,000 of retention bonuses were included in operating expenses for the year
ended  December 31, 2000.  These  bonuses were offered to certain  employees for
their  commitment  to stay with  InsWeb  for  periods  of six months to one year
beginning  May  2000.  At  December  31,  2000,   InsWeb  had  future  retention
commitments  of  $1,131,000,  which are expected to be charged to expense in the
first half of fiscal 2001.

10.  IMPAIRMENT OF GOODWILL AND OTHER INTANGIBLES

     In  April   2000,   InsWeb   entered   into  a   linking   agreement   with
eHealthinsurance.com  under which InsWeb customers  accessed  eHealthInsurance's
individual health, small group health, and Medicare supplement insurance product
offerings.  As a result,  InsWeb  evaluated  the cost to develop  and market its
health care product  offerings and decided to discontinue the development of its
health care  initiatives,  which were  primarily  being  carried out through the
business and assets acquired as a result of InsWeb's  acquisition of Benelytics,
Inc. in 1998. InsWeb then evaluated the recoverability of the goodwill and other
intangibles recognized in connection with the Benelytics, Inc. acquisition,  and
determined that the circumstances indicated an inability to recover the carrying
amount of the related assets. During the second quarter of 2000, InsWeb recorded
a one-time  non-cash  write down of $4,418,000 of goodwill and other  intangible
assets,   including  the  assembled  workforce  and  contractual   relationships
associated with the Benelytics, Inc. acquisition.

11.  COMMITMENTS

     LEASES

     InsWeb leases its current office facilities under non-cancelable  operating
leases, which expire at various dates through August 2012.

     At December 31, 2000,  future minimum lease  payments under  non-cancelable
operating leases are as follows:

<TABLE>
<CAPTION>

(IN THOUSANDS)
<C>                                                                 <C>
2001 ............................................................   $ 3,241
2002 ............................................................     3,634
2003 ............................................................     3,580
2004 ............................................................     3,543
2005 ............................................................     3,341
Thereafter ......................................................    12,725
                                                                    -------
                                                                    $30,064
                                                                    =======
</TABLE>


     Rent  expense  for the years ended  December  31,  2000,  1999 and 1998 was
$1,979,000,  $1,458,000  and  $1,094,000  (net  of  sublease  rental  income  of
$749,000, $672,000 and $26,000), respectively.


                                    -51-
<PAGE>

     One of the office  leases is for a 65,000  square foot  building in Redwood
City,  California.  Under the terms of this  lease,  InsWeb is  responsible  for
taxes,  insurance and  maintenance  expenses.  This lease includes the option to
extend the term for two consecutive  five-year  periods at the expiration of the
initial  term and at the end of the  first  five-year  extension  period.  As of
December 31, 2000,  InsWeb had  subleased a portion of the Redwood City facility
under a four year  sublease  agreement.  InsWeb also received a letter of credit
and  $1,007,000  in cash to  collateralize  the lease,  and expects any sublease
revenue to offset its ongoing lease obligations.

     At  December  31,  2000,  future  sublease  revenue  under   non-cancelable
operating leases are as follows:

<TABLE>
<CAPTION>

(IN THOUSANDS)
<C>                                                                 <C>
2001 ............................................................   $ 2,801
2002 ............................................................     3,244
2003 ............................................................     3,197
2004 ............................................................     3,014
Thereafter ......................................................      --
                                                                    -------
                                                                    $12,256
                                                                    =======
</TABLE>


     In September 2000, InsWeb signed a 10-year lease agreement through 2010 for
office space in the  Sacramento  area to house its  corporate  headquarters  and
agency  operations.  InsWeb  has  options  to extend the lease at the end of the
lease  term,  and has the right of first  refusal on other  office  space in the
complex.

     MARKETING AGREEMENTS

     InsWeb  is  required  to  make  fixed  payments  under  various   marketing
agreements, which expire at various dates through 2005. In addition to the fixed
fees,  certain  of these  agreements  require  InsWeb  to pay fees for each user
delivered to InsWeb's website in excess of certain minimums.

     In February 1998, InsWeb and Yahoo!  entered into an agreement  pursuant to
which  Yahoo!  offers  a  co-branded  version  of the  InsWeb  online  insurance
marketplace on the Yahoo!  website.  The agreement provides for InsWeb to be the
exclusive provider of online insurance quotation services on the Yahoo! site for
automobile,  homeowners and term life insurance. Under the agreement, InsWeb has
agreed to pay to Yahoo!  fixed fees,  plus a portion of the associated  revenues
provided that certain minimum quarterly targets are met, for each user delivered
to an InsWeb quote form from the co-branded  site. This agreement was renewed in
September 2000 for a period of one year.

     In December 1999,  InsWeb and Microsoft  entered into a two-year  agreement
pursuant to which  Microsoft's MSN Insurance Center on MSN  MoneyCentral  offers
co-branded  comparative  shopping  services  provided by InsWeb.  The  agreement
provides for InsWeb to be the exclusive  provider of online insurance  quotation
services on the MSN Insurance Center. Under the agreement,  InsWeb has agreed to
pay to MSN fixed fees for certain traffic  guarantees,  plus a fee for each user
delivered to an InsWeb quote form from the co-branded  site in excess of certain
minimums.

     In  February  2001,  InsWeb and  America  On-line  entered  into a two-year
agreement  pursuant to which America  Online offers a co-branded  version of the
InsWeb online insurance  marketplace across the Netscape  Netcenter,  Compuserve
and Digital City websites. The agreement provides for InsWeb to be the exclusive
provider of online  insurance  quotation  services on the  Netscape  website and
premier  insurance  comparison-shopping  aggregator  of insurance  offerings for
Compuserve and Digital City.  Under the  agreement,  InsWeb has agreed to pay to
AOL fixed fees for certain  impression targets plus a fee for each click-through
over a cumulative  minimum  threshold.  In February 2001, InsWeb and AOL amended
the  original  contract  to  adjust  the  amount  of  fixed  fees  and  targeted
impressions for the remainder of the original term of the contract.  As a result
of this  amendment,  effective  November  1, 2001,  InsWeb will no longer be the
exclusive provider of online insurance  quotations on Netscape,  and rather will
become a preferred provider of these services.

     At December 31,  2000,  future  minimum  payments  under these  agreements,
including  the AOL amendment  and Intuit  agreement  executed in fiscal 2001, is
$13,100,000 in 2001 and $18,350,000 thereafter.


                                    -52-
<PAGE>

12.  RELATED PARTY TRANSACTIONS

     STOCKHOLDER AND CUSTOMER

     A stockholder, who is also a customer,  accounted for $881,000,  $1,023,000
and $134,000 of InsWeb's  revenue during 2000, 1999 and 1998,  respectively.  At
December  31,  2000 and 1999,  this  customer  accounted  for  $74,000 and $0 of
accounts receivable, respectively.

     NOTES PAYABLE TO OFFICERS

     From InsWeb's  inception through March 1996, InsWeb borrowed from its Chief
Executive  Officer an aggregate of $1,722,000 to cover start-up costs.  The loan
was evidenced by an uncollateralized  demand promissory note bearing interest at
6% per annum.  InsWeb paid  $197,000 on the note in 1996 and paid the  remaining
balance of $1,525,000 in September 1998.

     In December 1998,  Benelytics,  Inc. borrowed $25,000 from its President in
exchange for an  uncollateralized  demand  promissory  note bearing  interest at
4.33% per annum. The note was paid in full by InsWeb in January 1999.

     NOTES RECEIVABLE FROM OFFICERS

     In February 1996, InsWeb lent the Chief Executive Officer  $1,525,000.  The
loan  was  evidenced  by an  uncollateralized  demand  promissory  note  bearing
interest at 6% per annum.  The Chief Executive  Officer paid the note in full in
September 1998 along with accrued interest.

     In August 1998,  InsWeb lent the Chief Executive  Officer and the President
$3,000,000 and $1,000,000,  respectively,  in exchange for promissory notes. The
notes  accrued  interest at 15% per annum and were  collateralized  by shares of
InsWeb's  common stock owned by the officers.  The officers used the proceeds of
these  loans to acquire  another  stockholder's  interest  in 885,000  shares of
InsWeb's  common  stock.  These notes and accrued  interest were paid in full in
September 1998.

     AFFILIATE AND CUSTOMER

     An affiliate,  who owns a majority interest in a significant stockholder of
InsWeb, is also a customer and accounted for $322,000,  $400,000 and $248,000 of
InsWeb's  revenue  during  2000,  1999 and  1998,  respectively.  This  customer
accounted for $4,000 and $15,000 of accounts receivable at December 31, 2000 and
1999.

     STOCKHOLDER AGREEMENTS

     In November  1996,  InsWeb entered into the following  agreements  with the
then Series B preferred stockholder (the Series B stockholder).

LINE OF CREDIT AGREEMENT

     InsWeb  obtained a five-year line of credit totaling  $25,000,000  from the
Series B stockholder.  In April 1998, the line of credit commitment was assigned
to and assumed by the majority  stockholder of the Series B stockholder,  who is
also a  customer  of  InsWeb.  The  amount  available  under  the line of credit
commitment was reduced to $12,500,000 in May 1999 and was subsequently cancelled
in  conjunction  with the closing of InsWeb's  initial  public  offering in July
1999.

     Under the line of credit  agreement,  all borrowings were  uncollateralized
and bore interest at 15% per annum. The entire balance was repaid in March 1999.
Interest  expense  related to the line of credit was $0, $539,000 and $1,311,000
for the years ended December 31, 2000, 1999 and 1998, respectively.  At December
31, 2000 and 1999, there was no accrued interest payable.

ASSET PURCHASE AGREEMENT

     In March 1997,  InsWeb sold the assets of its Property and Casualty  Agents
line of business to the Series B


                                    -53-
<PAGE>

stockholder in accordance with an Asset Purchase  Agreement.  InsWeb  recognized
the  associated  income of $650,000,  net of the related  non-compete  agreement
payment, in December 1998 as other income on the statement of operations.

JOINT MARKETING AND LICENSE AGREEMENT

     In accordance with a Joint Marketing and License Agreement,  InsWeb and the
Series B  stockholder  agreed to license  certain  software to each  other.  The
transfers of the licensed software were completed in December 1998 and InsWeb is
under no further obligation to deliver  additional  software or documentation or
to provide any  maintenance  for previously  delivered  software.  The agreement
specified the following cross-licensing fees: (i) InsWeb was to pay the Series B
stockholder  $50,000 and  $5,450,000  for a non-compete  agreement and five-year
non-exclusive  licenses to certain  software  owned by the Series B stockholder,
respectively,  and (ii) the Series B stockholder  was to pay InsWeb $350,000 for
five-year  non-exclusive  licenses  to  certain  software  owned by  InsWeb.  In
addition,  the agreement  provided for the payment of  transaction  fees by each
party to the other based on revenues  resulting from the joint marketing efforts
and utilization of each other's software.

     Under the terms of the Joint  Marketing  and  License  Agreement,  InsWeb's
payments to the Series B stockholder of $5,500,000 were to be offset against the
Series B  stockholder's  payments  to InsWeb of  $1,000,000,  consisting  of the
$350,000  license fee payable under the  agreement and of the $650,000  purchase
price payable under the Asset Purchase  Agreement.  Payment was originally to be
made in November 1998.

     In December  1998,  the  parties  agreed to amend the Joint  Marketing  and
License Agreement.  The amendment eliminated the payment of transaction fees and
revised the payment terms to allow InsWeb to make four quarterly payments to the
Series B stockholder  of $1,125,000  each,  due on the first day of each quarter
beginning  January 1, 1999. The remaining amounts were paid in full during 1999.
In  1998,  InsWeb  determined  that it would  not be  integrating  the  software
licensed  from the Series B  stockholder  into its  products.  As a result,  the
$5,450,000 software licenses were recorded as product development expense.

     MARKETING AGREEMENTS

     For  the  years  ended  December  31,  2000  and  1999,  InsWeb  recognized
$4,625,000 and $4,549,000,  respectively in marketing  expense under a marketing
agreement with an Internet company.  An affiliate of the Internet company became
a principal stockholder of InsWeb on December 30, 1998.

13.  STOCKHOLDERS' EQUITY

     INITIAL PUBLIC OFFERING

     In July 1999,  InsWeb sold 5,750,000  shares of common stock  including the
exercise of the underwriters'  over-allotment  option in an underwritten  public
offering  at a price of $17.00  per  share.  InsWeb  received  net  proceeds  of
approximately  $90,000,000 after  underwriting  discount and offering  expenses.
Simultaneously  with the closing of the public  offering,  all 819,000 shares of
InsWeb's  preferred  stock were  converted  to common stock on a fifteen for one
basis.  Prior to the  conversion,  the  Series A, A-1,  B, C, D and E  preferred
stockholders held certain voting,  dividend,  liquidation and conversion rights.
No  dividends  were  declared  by the  Board of  Directors  through  the date of
conversion.  In accordance with its line of credit  agreement with its affiliate
(see Note 12),  InsWeb did not  declare or pay any  dividends  while the line of
credit was in effect.

     STOCK OPTION PLANS

     In September 1995,  InsWeb  authorized the 1995 Stock Option Plan (the 1995
Plan) under which the Board of Directors  was  authorized to grant stock options
to employees,  officers,  directors,  independent contractors and consultants of
InsWeb and its subsidiaries. In 1997, the Board of Directors terminated the 1995
Plan and provided that no further options would be granted  pursuant to the 1995
Plan,  but that the terms of the 1995 Plan would  continue to govern the options
then outstanding  under the 1995 Plan. No options remain  outstanding  under the
1995 plan as of December 31, 2000 or 1999.

     In July 1997, InsWeb authorized the 1997 Stock Option Plan (the 1997 Option
Plan) and the Senior Executive


                                    -54-
<PAGE>

Option  Plan (the  Executive  Plan).  Under the 1997 Option  Plan,  the Board of
Directors  may issue  incentive  stock  options to  employees  of InsWeb and its
subsidiaries  and may  also  issue  nonqualified  stock  options  to  employees,
officers,  directors,  independent contractors and consultants of InsWeb and its
subsidiaries.  Under  the  Executive  Plan,  the  Board of  Directors  may issue
nonqualified  stock options to  employees,  officers and directors of InsWeb and
its subsidiaries.  Following  attendance at each regularly  scheduled meeting of
the Board of Directors,  each eligible director is granted a fully-vested option
to purchase  750 shares of common  stock at the fair market value on the date of
grant.

     As of December 31, 2000,  7,920,170  total shares of InsWeb's  common stock
have been  reserved for issuance  upon  exercise of stock options under the 1997
Option Plan and the Executive  Plan.  The 1997 Option Plan was amended in August
1998,  providing  an  automatic  annual  increase  in the share  reserve,  to be
effective on the first day of each fiscal  year,  by a number of shares equal to
5% of  the  number  of  common  shares  outstanding  as of the  last  day of the
preceding fiscal year.

     Options   granted  under  the  Plans   generally   vest  in  equal  monthly
installments over a one to three-year period, except for certain options granted
to members of InsWeb's Board of Directors,  which vest immediately.  The options
expire ten years from the date of grant.

     Activity under all the Plans is as follows:

<TABLE>
<CAPTION>


(IN THOUSANDS EXCEPT EXERCISE PRICE    SHARES AVAILABLE     NUMBER OF                                    WEIGHTED AVERAGE
                                       ----------------    ----------                                    ----------------
 AMOUNTS)                                 FOR GRANT          SHARES     EXERCISE PRICE  AGGREGATE PRICE   EXERCISE PRICE
                                          ---------          ------     --------------  ---------------   --------------

<S>                                            <C>           <C>        <C>             <C>               <C>
Balances, December 31, 1997.............          607         1,546      $ 0.02-$ 2.65     $    2,604      $     1.68
Additional shares reserved .............          750            --                 --             --              --

Options granted ........................       (1,171)        1,171      $ 2.65-$ 5.00          4,513      $     3.85
Options exercised ......................           --          (419)     $ 1.30-$ 2.65           (568)     $     1.35
Options canceled .......................          201          (201)     $ 0.50-$ 2.65           (477)     $     2.38
                                              ------------------------                     --------------------------

Balances, December 31, 1998 ............          387         2,097      $ 0.02-$ 5.00          6,072      $     2.90
Additional shares reserved .............        3,602            --                 --             --              --
Options granted ........................       (3,845)        3,845      $ 9.23-$60.00         93,958      $    24.43
Options exercised ......................         --            (734)     $ 0.02-$10.67         (1,638)     $     2.23
Options canceled .......................          544          (544)     $ 0.50-$45.00         (7,728)     $    14.20
                                              ------------------------                     --------------------------

Balances, December 31, 1999 ............          688         4,664      $ 0.50-$60.00         90,664      $    19.43
Additional shares reserved .............        1,735            --                 --            --               --
Options granted ........................       (5,416)        5,416      $ 1.13-$25.75         43,844      $     8.09
Options exercised ......................           --          (428)     $ 2.16-$ 5.31         (1,895)     $     4.43
Options canceled .......................        5,367        (5,367)     $ 1.44-$60.00        (92,838)     $    17.30
                                              ------------------------                     --------------------------

Balances, December 31, 2000 ............        2,374         4,285      $ 0.50-$45.00         39,775      $     9.28
                                              ========================                     ==========================
</TABLE>

     Options outstanding and currently exercisable by exercise price at December
31, 2000 are as follows:

<TABLE>
<CAPTION>

                                                         OPTIONS OUTSTANDING                  OPTIONS CURRENTLY EXERCISABLE
                                                       ----------------------               --------------------------------
(IN THOUSANDS EXCEPT CONTRACTUAL LIFE AND          NUMBER      WEIGHTED AVERAGE REMAINING    NUMBER         WEIGHTED AVERAGE
EXERCISE PRICE AMOUNTS)                          OUTSTANDING        CONTRACTUAL LIFE        OUTSTANDING       EXERCISE PRICE
                                                 -----------        ----------------        -----------       --------------
EXERCISE PRICES
---------------
<S>                                                 <C>                      <C>                    <C>                <C>
$0.50 - $2.00..............................          190                     9.61                    12                $0.95
$2.06 -$2.16...............................         1,058                    9.55                   144                $2.16
$2.19 - $2.65..............................          234                     8.18                   129                $2.63
$2.69......................................          653                     9.30                   350                $2.69
$3.12 - $10.67.............................          716                     8.25                   436                $7.80
$10.67 - $13.75............................          163                     8.58                    74               $11.95
$14.00.....................................          824                     9.09                   257               $14.00
$14.13 - 29.44.............................          165                     8.85                    59               $19.47
$29.50.....................................          10                      8.92                    3                $29.50
$45.00.....................................          272                     8.55                    72               $45.00
                                            ----------------------------------------------------------------------------------
                                                    4,285                    9.00                  1,536               $9.10
                                            ==================================================================================

</TABLE>
     The weighted average  exercise price of options  exercisable as of December
31, 1999 and 1998, was $5.48 and $1.67, respectively.


                                    -55-
<PAGE>

     InsWeb  accounts  for  employee  and board of  director  stock  options  in
accordance  with the  provisions of APB No. 25 and FIN No. 44, and complies with
the  disclosure  provisions  of SFAS No.  123.  Under APB No.  25,  compensation
expense  is  recognized  based  on the  amount  by which  the fair  value of the
underlying  common stock exceeds the exercise  price of the stock options at the
measurement  date,  which in the case of employee stock options is typically the
date of grant. For financial reporting purposes,  InsWeb has determined that the
deemed  fair  market  value  of  InsWeb's  common  stock on the date of grant of
certain  employee  stock  options  was in  excess of the  exercise  price of the
options.  This amount is recorded as deferred  compensation,  is classified as a
reduction of  stockholders'  equity and is  amortized as a charge to  operations
over the vesting  period of the  applicable  options,  which is generally  three
years.   Consequently,   InsWeb   recorded   deferred  stock   compensation   of
$(1,667,000),  $2,347,000 and  $1,618,000,  net of  terminations  of $1,667,000,
$456,000 and $56,000,  during the years ended December 31, 2000, 1999, and 1998,
respectively.  Amortization  of stock  compensation  expense  recognized for the
years ended December 31, 2000, 1999, and 1998 totaled  $912,000,  $1,272,000 and
$541,000,  respectively.  InsWeb's  stock option grants and related  deemed fair
value are as follows:

<TABLE>
<CAPTION>

                                                              NUMBER OF OPTIONS WEIGHTED AVERAGE  WEIGHTED AVERAGE
(IN THOUSANDS EXCEPT  EXERCISE PRICE AND DEEMED FAIR VALUE        GRANTED       EXERCISE PRICE   DEEMED FAIR VALUE
  AMOUNTS)
<S>                                                                 <C>     <C>                <C>
For year ended December 31, 1998
Options granted at deemed fair value .....................            503   $       4.19       $       4.19
Options granted below deemed fair value ..................            668   $       3.55       $       6.02
                                                                   ----------------------------------------
  Total ..................................................          1,171   $       3.85       $       5.23
                                                                   ========================================
For year ended December 31, 1999
Options granted above deemed fair value ..................          1,251   $      48.40       $      17.00
Options granted at deemed fair value .....................            993   $      15.51       $      15.51
Options granted below deemed fair value ..................          1,601   $      11.23       $      12.98
                                                                   ----------------------------------------
  Total ..................................................          3,845   $      24.43       $      12.94
                                                                   ========================================
For year ended December 31, 2000
Options granted at deemed fair value .....................          5,416   $       8.09      $       8.09
                                                                   ========================================
</TABLE>


                                    -56-
<PAGE>

     Stock  compensation  is being  amortized  over the  vesting  periods of the
options on a graded vesting method. This compensation expense relates to options
awarded  to   individuals   in  all   operating   expense   categories.   Absent
cancellations,   the  amortization  of  deferred  compensation  is  expected  to
approximate $250,000 for 2001, and $59,000 for 2002.

     Had  compensation  cost for  option  grants to  employees  been  determined
consistent with SFAS No. 123, InsWeb's net loss would have been as follows:


<TABLE>
<CAPTION>
                                                                      YEAR ENDED DECEMBER 31,
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)                         2000             1999          1998
                                                                ----             ----          ----
<S>                                                           <C>           <C>           <C>
Net loss as reported ......................................   $  (50,847)   $  (36,201)   $  (22,490)
Net loss per share as reported ............................   $    (1.45)   $    (1.52)   $    (1.52)
Net loss--pro forma (computed using SFAS No. 123) .........   $  (60,864)   $  (37,663)   $  (22,539)
Net loss per share--pro forma (computed using SFAS No. 123)   $    (1.73)   $    (1.58)   $    (1.52)

</TABLE>

     The above pro forma  disclosures are not necessarily  representative of the
effects on reported  income or loss for future  years as  additional  grants are
made each year and options vest over several years.

     The per share weighted  average fair value of options granted for the years
ended  December  31,  2000,   1999,  and  1998  was  $6.66,   $2.94  and  $0.56,
respectively,  as estimated on the date of grant using the Black-Scholes options
pricing model with the following assumptions:

<TABLE>
<CAPTION>

                                              YEAR ENDED DECEMBER 31,
                                       2000             1999            1998
                                       ----             ----            ----

<S>                                   <C>            <C>             <C>
Risk-free interest rate ...........    6.1% -6.3%     4.6%-6.19%    4.6%-5.6%
Expected life .....................    2.7 years      2.5 years       3 years
Expected dividend yield ...........           --             --            --
Volatility ........................          161%       0%-147%            --

</TABLE>

     The risk-free  interest rate range  represents  the low and high end of the
range used at different points during the year. Prior to InsWeb's initial public
offering in July 1999,  InsWeb did not have actively  traded equity  securities,
and,  accordingly,  volatility was not  considered in  determining  the value of
options granted to employees.

     EMPLOYEE STOCK PURCHASE PLAN

     InsWeb has an  Employee  Stock  Purchase  Plan (the 1999 Plan)  under which
eligible  employees  may  authorize  payroll  deductions  of up to 15% of  their
compensation  to purchase shares at 85% of the lower of the fair market value of
the Common Stock on the date of  commencement of the offering or on the last day
of the six-month  purchase period. The program commenced in July 1999. In fiscal
year 2000,  102,000 shares were purchased by InsWeb and distributed to employees
at prices ranging from $1.17 to $12.38.  The weighted  average fair value of the
fiscal 2000 awards was $9.15. At December 31, 2000, InsWeb had 648,000 shares of
its Common Stock reserved for future issuance under the 1999 Plan. The number of
shares of common  stock  issuable  under  the 1999  Plan is to be  increased  by
300,000  shares each year  beginning  on January 1, 2000 and through  January 1,
2008.

14.  COMMON STOCK WARRANTS

     In connection with the acquisition of Benelytics,  Inc., InsWeb assumed all
warrants  then  outstanding  to purchase  common stock of  Benelytics,  Inc. and
converted  them into  warrants  to  purchase an  aggregate  of 12,000  shares of
InsWeb's common stock at an exercise price of $10.86 per share. The warrants are
fully exerciseable and expire on June 1, 2003. At


                                    -57-
<PAGE>

December 31, 2000 and 1999, respectively, no warrants had been exercised and all
remained outstanding. The fair value of these warrants was accounted for as part
of the purchase price for Benelytics, Inc.

15.  INCOME TAXES

     As of December 31, 2000,  InsWeb had net operating  loss  carryforwards  of
approximately   $117,500,000  for  federal  and  $79,300,000  state  income  tax
purposes. The federal and state net operating loss carryforwards begin to expire
in the years 2011 and 2004,  respectively.  InsWeb's  ability to utilize its net
operating loss  carryforwards  to offset future taxable income may be subject to
restrictions  attributable  to equity  transactions  that  result in  changes in
ownership  as  defined in the Tax Reform  Act of 1986.  These  restrictions  may
limit,  on an  annual  basis,  InsWeb's  future  use of its net  operating  loss
carryforwards.  The  amount,  if any,  of  such  limitations  has  not yet  been
determined.

     The components of the net deferred tax assets and liabilities are presented
below:

<TABLE>
<CAPTION>

                                                             DECEMBER 31,
(IN THOUSANDS)                                        2000                 1999
                                                      ----                 ----
<S>                                                  <C>             <C>
Net operating loss carryforwards .................   $     44,576    $     27,591
Tax credit carryforwards .........................             31              31
Accruals and reserves ............................          2,617             267
Other ............................................            272             335
                                                      ----------------------------

                                                           47,496          28,224
Less valuation allowance .........................        (47,496)        (28,224)
                                                      ----------------------------
Net deferred tax asset ...........................            $--             $--
                                                      ============================
</TABLE>

     Due  to  uncertainty  surrounding  the  realization  of the  favorable  tax
attributes  in future  tax  returns,  InsWeb has  placed a  valuation  allowance
against its net deferred tax asset.  The  valuation  allowance  recorded for the
years  ended  December  31,  2000,  1999  and  1998  increased  by  $19,272,000,
$12,664,000 and $9,505,000, respectively.

     The difference between the income tax benefit at the federal statutory rate
of 34% and  InsWeb's  effective  tax  rate  is due  primarily  to the  valuation
allowance  established  to offset the deferred  tax assets.  The  provision  for
income  taxes is  different  than  the  amount  computed  using  the  applicable
statutory  federal income tax rate with the difference for each year  summarized
below:

<TABLE>
<CAPTION>
                                                                DECEMBER 31,
                                                         2000      1999     1998
                                                        ------    ------   ------
<S>                                                     <C>         <C>     <C>
Federal tax benefit at statutory rate ...........       (34)%       (34)%   (34)%
State taxes, net of federal benefit .............        (3)         (3)     (6)
Nondeductible goodwill amortization .............         1           4       --
Nondeductible stock compensation ................         1           1       --
Adjustment due to increase in valuation allowance        35          32       40
                                                      ---------------------------
Provision for income taxes ......................         0%          0%       0%
                                                      ===========================
</TABLE>

16.  EMPLOYEE BENEFIT PLAN

     InsWeb has a defined  contribution plan offered to all eligible  employees,
and is qualified under section 401(k) of the Internal Revenue code.  InsWeb will
match  50% of the first 6% of  elective  contributions  made by each  qualifying
employee.  Each  participant  is 100%  vested in elective  contributions  and is
incrementally  vested one-third at the end of each of three consecutive years of
service in employer  contributions.  Employer  contributions for the years ended
December  31,  2000,  1999  and  1998  were  $308,000,  $282,000  and  $181,000,
respectively.


                                    -58-
<PAGE>

17.  BENELYTICS, INC.

     On December 31, 1998,  InsWeb  acquired  all of the  outstanding  shares of
Benelytics,  Inc. in exchange  for  909,000  shares and  warrants to purchase an
aggregate of 12,000  shares of InsWeb's  common stock valued at $9.23 per share.
Transaction  costs of $86,000 were incurred.  The  acquisition was accounted for
under the  purchase  method  of  accounting.  The  aggregate  purchase  price of
$8,588,000,  together with $172,000 of liabilities  assumed, was allocated based
on the fair value of the assets  acquired.  The  tangible  assets of $63,000 are
comprised  of cash  and  fixed  assets.  Intangible  assets  of  $1,380,000  are
comprised of purchased software, non-compete agreements, assembled workforce and
contractual relationships,  and were being amortized over two years. Goodwill of
$7,317,000  was being  amortized  over three  years.  Amortization  expense  was
$1,150,000,  $3,129,000 and $0 for the years ended  December 31, 2000,  1999 and
1998,  respectively.  During  the  second  quarter  of 2000,  InsWeb  recorded a
one-time  non-cash  write down of  $4,418,000  of goodwill and other  intangible
assets,   including  the  assembled  workforce  and  contractual   relationships
associated with the Benelytics, Inc. acquisition.

     The following pro forma results of operations  reflect the combined results
of InsWeb and Benelytics,  Inc. for the fiscal year ended December 31, 1998, and
has been  prepared  as though the  entities  had been  combined as of January 1,
1998.  The  proforma  results do not  reflect  any  nonrecurring  charges  which
resulted directly from the transaction.

<TABLE>
<CAPTION>

                                                     (UNAUDITED)
                                                     YEAR ENDED
                                                     DECEMBER 31,
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)                  1998
                                                     ----------
<S>                                                  <C>
Revenues .........................................   $    4,315
Net loss .........................................   $  (26,968)
Net loss per share ...............................   $    (1.72)
Shares used in computing net loss per share ......       15,678

</TABLE>

18.  SEGMENT INFORMATION

     InsWeb  adopted SFAS No. 131,  DISCLOSURES  ABOUT SEGMENTS OF AN ENTERPRISE
AND RELATED INFORMATION,  in fiscal 1999. SFAS No. 131 establishes standards for
reporting  information about operating segments.  Operating segments are defined
as components of an enterprise  about which  separate  financial  information is
available that is evaluated  regularly by the chief operating  decision maker in
deciding how to allocate resources and in assessing performance.

     InsWeb operates in one segment,  business-to-consumer  electronic insurance
services. InsWeb markets its online marketplace in the United States and Canada.
The Chief Executive Officer has been identified as the Chief Operating  Decision
Maker ("CODM") because he has final authority over resource allocation decisions
and  performance  assessment.  The CODM  does  not  receive  discrete  financial
information about any material individual components of InsWeb's operations.

19.  SUBSEQUENT EVENTS

ACQUISITION OF INTUIT INSURANCE SERVICES ASSETS

     In January 2001,  InsWeb  acquired from Intuit,  certain assets and related
liabilities  associated with an online insurance shopping and purchasing service
operated by Intuit Insurance Services, Inc., a wholly owned subsidiary of Intuit
in exchange for 7,019,389  shares of InsWeb's common stock.  The purchase price,
based on the fair value of the common  stock  value at the date the  acquisition
was  announced,   was   approximately   $12.5  million.   InsWeb  also  incurred
approximately   $525,000  in  direct  transaction  costs  associated  with  this
acquisition,  of which  $295,000  were  incurred as of December 31, 2000 and are
included in deposits  and other  assets.  InsWeb did not acquire any of Intuit's
revenue producing  relationships  with insurance  carriers.  Pursuant to related
agreements, a representative from Intuit has been elected to the InsWeb Board of
Directors,  and  certain  restrictions  were  placed on the ability of InsWeb to
conduct future acquisitions or dispositions.


                                    -59-
<PAGE>

     In  connection  with the  acquisition,  InsWeb  and Intuit  entered  into a
license and distribution agreement, under which, Intuit and InsWeb have granted
one another licenses to create links between their respective  websites in order
to create  and  operate a  co-branded  insurance  center.  This  agreement  also
provides  that  InsWeb  will be the  exclusive  aggregator  of  online  consumer
insurance  services  for  Quicken.com,  an Intuit  website,  and that subject to
certain minimum clickthrough targets, Intuit will share in associated revenues.

EHEALTHINSURANCE LITIGATION

     In February 2001, InsWeb temporarily suspended its online  health-insurance
quoting  services due to the  decision by  eHealthInsurance,  formerly  InsWeb's
exclusive provider of online health-insurance  quotes, to unilaterally terminate
the  relationship.  In April 2000,  the two companies  signed a two-year  online
distribution agreement by which  eHealthInsurance  became the exclusive provider
of  individual  health,  small-group  health and Medicare  supplement  insurance
quotes to  InsWeb's  users  through a  co-branded  website.  In  February  2001,
eHealthInsurance filed suit in the U.S. District Court for the Northern District
of California  alleging  InsWeb's  failure to perform its obligations  under the
agreement.  The complaint seeks  unspecified  compensatory and punitive damages.
InsWeb  believes  that the claims are without merit and that the outcome of this
lawsuit will not have a material adverse effect on InsWeb's  financial  results,
cash flow or financial  position.  In addition,  InsWeb filed a  countersuit  in
March 2001  alleging that  eHealthInsurance  wrongfully  terminated  the linking
agreement and pursued a course of conduct aimed at damaging InsWeb's business.

NOTE 20.  QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

<TABLE>
<CAPTION>

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)                                  QUARTER ENDED                        YEAR ENDED
                                                     --------------------------------------------------------------------
                                                       MARCH 31      JUNE 30    SEPTEMBER 30    DECEMBER 31   DECEMBER 31
                                                     --------------------------------------------------------------------
<S>                                                  <C>           <C>           <C>           <C>           <C>
FISCAL 2000:                                                           (a)           (b)
Net revenues .....................................   $    8,720    $    4,857    $    4,230    $    5,403    $   23,210
                                                     ------------------------------------------------------------------
Operating loss ...................................   $  (14,302)   $  (19,748)   $  (11,976)   $   (7,528)   $  (53,554)
                                                     ------------------------------------------------------------------
Loss before cumulative effect of a change in
accounting principle .............................   $  (12,975)   $  (18,747)   $  (10,816)   $   (6,674)   $  (49,212)
                                                     ------------------------------------------------------------------
Net loss .........................................   $  (14,610)   $  (18,747)   $  (10,816)   $   (6,674)   $  (50,847)
                                                     ------------------------------------------------------------------
Loss per share before cumulative effect of a
change in accounting principle - basic and diluted.  $    (0.36)   $    (0.53)   $    (0.30)   $    (0.19)   $    (1.40)
                                                     ------------------------------------------------------------------
Net loss per share - basic and diluted ...........   $    (0.41)   $    (0.53)   $    (0.30)   $    (0.19)   $    (1.45)
                                                     ------------------------------------------------------------------

FISCAL 1999:
Net revenues .....................................   $    3,311    $    5,060    $    7,041    $    6,429    $   21,841
                                                     ------------------------------------------------------------------
Operating loss ...................................   $   (5,553)   $   (9,261)   $  (11,063)   $  (12,505)   $  (38,382)
                                                     ------------------------------------------------------------------
Net loss .........................................   $   (6,021)   $   (8,977)   $  (10,192)   $  (11,011)   $  (36,201)
                                                     ------------------------------------------------------------------
Net loss per share - basic and diluted ...........   $    (0.38)   $    (0.56)   $    (0.36)   $    (0.16)   $    (1.52)
                                                     ------------------------------------------------------------------
FISCAL 1999 (PRO FORMA) (C):
Net revenues .....................................   $    3,061    $    4,743    $    6,657    $    6,386    $   20,847
                                                     ------------------------------------------------------------------
Operating loss ...................................   $   (5,803)   $   (9,578)   $  (11,447)   $  (12,548)   $  (39,376)
                                                     ------------------------------------------------------------------
Net loss .........................................   $   (6,271)   $   (9,294)   $  (10,576)   $  (11,054)   $  (37,195)
                                                     ------------------------------------------------------------------
Net loss per share - basic and diluted ...........   $    (0.39)   $    (0.58)   $    (0.37)   $    (0.16)   $    (1.56)
                                                     ------------------------------------------------------------------
</TABLE>

 (a) Operating  loss,  loss before  cumulative  effect of a change in accounting
     principle and net loss per share includes charge for impairment of goodwill
     of $4.4 million and restructuring charge of $1.5 million.

 (b) Operating  loss,  loss before  cumulative  effect of a change in accounting
     principle  and net loss per  share  includes  restructuring  charge of $0.6
     million.

(c)  Pro forma information shows what InsWeb would have reported if SAB 101 (see
     Note 3, above) had been in effect for the 1999 quarterly periods presented.


                                    -60-
<PAGE>

     RESTATEMENT OF QUARTERLY RESULTS

     In the quarter  ended June 30, 2000,  InsWeb  originally  recorded  certain
payments  to be  made to  terminating  employees  as  part of its  restructuring
charge.  Upon  reevaluation  of this  accounting,  InsWeb  determined that these
payments were  effectively  "stay bonuses"  which should be recognized  over the
contractual  service  period of the  related  employee,  and  excluded  from the
restructuring  charge.  This  adjustment  resulted  in a  decrease  to  InsWeb's
original  restructuring  charge  by  $1,882,000,  which  is net of  $345,000  of
severance  related charges incurred and paid in April 2000, for the three months
ended June 30, 2000 and an increase to the  restructuring  charge of $23,000 for
the three months ended  September  30, 2000.  Compensation  expense  included in
operating   expenses  has  also  been  adjusted   (increased)  by  $405,000  and
$1,270,000,  to record the amount of stay bonuses earned during the three months
ended June 30, 2000 and September 30, 2000, respectively.

     The  second  adjustment   reduced  the  asset  impairment  portion  of  the
restructuring  charge  recorded in the quarter  ended June 30, 2000,  related to
InsWeb's  termination  of the San Carlos  facility  lease.  In May 2000,  InsWeb
assigned its 12-year  lease to an  affiliate  of the  landlord in exchange  for,
among other things,  a  termination  fee of $1.0 million to be received when the
property is re-leased by the landlord.  At the time that the lease was assigned,
InsWeb wrote-off the $1.1 million of the related tenant  improvements as part of
the original  restructuring charge.  However, as re-leasing of this property and
the resulting  collection of this termination fee was probable,  this adjustment
is being made to accrue the $1.0 million fee as a reduction of the restructuring
charge recorded in the quarter ended June 30, 2000. The corresponding receivable
has been  recorded as part of deposits and other  assets at September  30, 2000.
The $1.0 million receivable was collected in full in October 2000.

     CHANGE IN ACCOUNTING PRINCIPLE

     As discussed in Note 3 above, effective January 1, 2000, InsWeb changed its
revenue  recognition  policy for set-up fees,  which are included in development
and  maintenance  fees,  to comply with SEC Staff  Accounting  Bulletin No. 101:
REVENUE Recognition.  Prior to this accounting change, InsWeb recognized revenue
from  set-up fees  received  from a  participating  insurance  carrier  when the
development work was completed and the insurance company's  integration with the
Company's site became  operational ("Live Date"). As a result of SAB 101, InsWeb
continues  to defer  set-up  revenue  until the Live Date,  but has  changed its
revenue recognition policy from full recognition at the Live Date to recognizing
the  revenue  ratably  over  the  estimated  life of the  carrier  relationship.
Additionally,  InsWeb's changed its revenue  recognition  policy for transaction
fees from  linking  agreements  that are  contingent  on the delivery of certain
minimum clickthroughs. No linking agreements with such a contingency clause were
entered  into prior to fiscal  2000.  Prior to this  change,  InsWeb  recognized
revenue  based on the  number  of  clickthroughs  delivered.  As a result of the
adoption of SAB 101, InsWeb will defer revenue on contracts with certain minimum
clickthrough  requirements until all contingencies have been met. The adjustment
for this change in  accounting  principle is unrelated to the other  restatement
adjustments described above, and results solely from the adoption of SAB 101.


                                    -61-
<PAGE>

     The effects of the restatement of the  restructuring  charge and the change
in accounting  principle on InsWeb's  consolidated  financial statements for the
three months ended March 31, 2000,  June 30, 2000 and  September 30, 2000 are as
follows:

<TABLE>
<CAPTION>
                                                                                   QUARTER ENDED
                                               ------------------------------------------------------------------------------------
                                                      MARCH 31, 2000                JUNE 30, 2000              SEPTEMBER 30, 2000
                                               ------------------------------------------------------------------------------------
<S>                                                <C>            <C>            <C>           <C>            <C>            <C>
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)                           AS                            AS                           AS
                                                AS RESTATED    ORIGINALLY     AS RESTATED    ORIGINALLY    AS RESTATED    ORIGINALLY
                                                                REPORTED                      REPORTED                     REPORTED
Net revenues                                          $8,720         $8,617         $4,857        $4,808         $4,230      $5,322
Operating Expenses                                 $(23,022)      $(23,022)      $(24,605)     $(27,428)      $(16,206)    $(14,914)
                                               -------------------------------------------------------------------------------------
Operating loss                                     $(14,302)      $(14,405)      $(19,748)     $(22,620)      $(11,976)     $(9,592)
Loss before cumulative effect of a  change
in accounting principle                            $(12,975)      $(13,077)      $(18,747)     $(21,618)      $(10,816)     $(8,432)
                                               -------------------------------------------------------------------------------------
Net loss                                           $(14,610)      $(13,077)      $(18,747)     $(21,618)      $(10,816)     $(8,432)
                                               -------------------------------------------------------------------------------------
Loss per share before cumulative effect of a
change in accounting principle - basic and
diluted                                              $(0.36)        $(0.37)        $(0.53)       $(0.62)        $(0.30)      $(0.37)
                                               -------------------------------------------------------------------------------------
Net loss per share - basic and diluted               $(0.41)        $(0.37)        $(0.53)       $(0.62)        $(0.30)      $(0.37)
                                               ------------------------------------------------------------------------------------
</TABLE>


                                    -62-
<PAGE>

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

     None.

                                    PART III

     The SEC  allows  us to  include  information  required  in this  report  by
referring to other  documents  or reports we have already  filed or will soon be
filing.  This is  called  "incorporation  by  reference."  We intend to file our
definitive  proxy  statement  pursuant to Regulation 14A not later than 120 days
after the end of the fiscal year covered by this report, and certain information
therein is incorporated in this report by reference.

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     The information required by this Item is incorporated by reference to
information set forth in our definitive proxy statement under the headings
"Proposal No. 1--Election of Directors" and "Section 16(a) Beneficial
Ownership Reporting Compliance" and in Part I of this report under the
heading "Executive Officers of the Registrant."

ITEM 11.  EXECUTIVE COMPENSATION.

     The  information  required by this Item is  incorporated  by  reference  to
information  set forth in our  definitive  proxy  statement  under  the  heading
"Executive Compensation and Other Matters."

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The  information  required by this Item is  incorporated  by  reference  to
information set forth in our definitive proxy statement under the heading "Stock
Ownership of Certain Beneficial Owners and Management."

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     The  information  required by this Item is  incorporated  by  reference  to
information  set forth in our  definitive  proxy  statement  under  the  heading
"Certain Relationships and Related Transactions."


                                    -63-
<PAGE>


                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.


     (a)  The following documents are filed as part of this Form:

          1.     Financial Statements:


                                                                            PAGE
Report of Independent Accountants.....................................        37
Consolidated Balance Sheets...........................................        38
Consolidated Statements of Operations.................................        39
Consolidated Statements of Stockholders' Equity.......................        40
Consolidated Statements of Cash Flows.................................        41
Notes to Consolidated Financial Statements............................        43


                                    -64-
<PAGE>

          2.     Financial Statement Schedules:

          The following  financial  statement schedule of InsWeb Corporation for
     the years ended  December 31, 2000,  1999 and 1998 is filed as part of this
     report and should be read in conjunction  with the  consolidated  financial
     statements of InsWeb Corporation.

          Schedule II--Valuation and Qualifying Accounts

          Other schedules have been omitted because the required  information is
     not present or not present in amounts  sufficient to require  submission of
     the  schedules  or because  the  information  required  is  included in the
     consolidated financial statements or notes thereto.

          3.      Exhibits:

          See Index to Exhibits.  The Exhibits listed in the accompanying  Index
     are filed as part of this report.

(b) Reports on Form 8-K during the quarter ended December 31, 2000:

          We  filed a  current  report  on Form 8-K  dated  December  18,  2000,
     announcing  InsWeb's  intent to  acquire  from  Intuit  certain  assets and
     related  liabilities  associated  with an  online  insurance  shopping  and
     purchasing  service operated by Intuit Insurance  Services,  Inc., a wholly
     owned subsidiary of Intuit.


                                    -65-
<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934 the  Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on March 29, 2001.

                                    INSWEB CORPORATION
                                    By:          /s/ HUSSEIN A. ENAN
                                           -------------------------------------
                                                      Hussein A. Enan
                                                 CHAIRMAN OF THE BOARD AND
                                                   CHIEF EXECUTIVE OFFICER

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report has been signed by the following  persons on behalf of the Registrant and
in the capacities and on the dates indicated:

<TABLE>
<CAPTION>

       SIGNATURE               TITLE                                                     DATE

<S>                          <C>                                                  <C>
  /s/ HUSSEIN A. ENAN        Chairman of the Board and Chief Executive Officer    March 30, 2001
---------------------------  (Principal Executive Officer)
    Hussein A. Enan

  /s/ JAMES M. CORROON       Vice Chairman of the Board                           March 30, 2001
---------------------------
    James M. Corroon

  /s/ MARK P. GUTHRIE         President, Chief Operating Officer and
                              Chief Financial Officer (Acting)                     March 30, 2001
---------------------------   (Principal Financial and Accounting
    Mark P. Guthrie           Officer)

 /s/ STEPHEN M. BENNETT       Director                                             March 30, 2001
---------------------------
   Stephen M. Bennett

   /s/ RONALD FISHER          Director                                             March 30, 2001
---------------------------
     Ronald Fisher

 /s/ RICHARD D. HEADLEY       Director                                             March 30, 2001
---------------------------
   Richard D. Headley

  /s/ ROBERT C. NEVINS        Director                                             March 30, 2001
---------------------------
      Robert C. Nevins

  /s/ ROBERT A. PUCCINELLI    Director                                             March 30, 2001
---------------------------
    Robert A. Puccinelli

</TABLE>


                                    -66-
<PAGE>


                       INSWEB CORPORATION AND SUBSIDIARIES
                                   SCHEDULE II
                        VALUATION AND QUALIFYING ACCOUNTS
                  YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998



<TABLE>
<CAPTION>

DESCRIPTION                                              BALANCE AT      CHARGED TO    CHARGED TO     DEDUCTIONS   BALANCE AT END
                                                        BEGINNING OF     COSTS AND    OTHER ACCOUNTS                 OF PERIOD
                                                       PERIOD EXPENSES
<S>                                                  <C>              <C>                 <C>       <C>              <C>
Year ended December 31, 2000:
Allowance for doubtful accounts ..................   $    142,000     $    144,000         $--       $  (151,000)     $   135,000

Year ended December 31, 1999:
Allowance for doubtful accounts ..................            $--     $    302,000         $--       $  (160,000)     $   142,000

Year ended December 31, 1998:
Allowance for doubtful accounts ..................   $      5,000              $--         $--       $    (5,000)             $--

</TABLE>


                                    -67-
<PAGE>




                               INSWEB CORPORATION
                                    EXHIBITS
                                       TO
                             FORM 10-K ANNUAL REPORT
                               FOR THE YEAR ENDED
                                DECEMBER 31, 2000

<TABLE>
<CAPTION>

EXHIBIT
NUMBER  DESCRIPTION OF DOCUMENT
-------------------------------
<S>       <C>
    3.1   Amended and Restated Certificate of Incorporation of Registrant. (1)
    3.2   Bylaws of Registrant. (1)
    4.1   Third Amended and Restated Investor Rights Agreement among Registrant and certain Stockholders of Registrant, dated as
          of March 31, 1999. (1)
   10.1   Form of Indemnification Agreement between Registrant and Registrant's directors and officers. (1)
   10.2   1997 Stock Option Plan. (1)
   10.3   1999 Employee Stock Purchase Plan. (1)
   10.4   Series A Preferred Stock Purchase Agreement between Registrant and Nationwide Mutual Insurance Company, dated as of
          January 30, 1996. (1)
   10.5   Stock Purchase Agreement between Registrant and Insurance Information Exchange, L.L.C., dated as of November 22, 1996 .
                                                                                                            (1)
   10.6   Non-Exclusive Joint Marketing and License Agreement between Registrant and Insurance Information Exchange, L.L.C.,
          dated as of November 22, 1996. (1)
   10.7   Asset Purchase Agreement between Registrant and Insurance Information Exchange, L.L.C., dated as of November 22, 1996 .
                                                                                                            (1)
   10.8   Letter of Credit Agreement between Registrant and AMS Services, Inc., dated as of November 22, 1996. (1)
   10.9   Assignment and Assumption Agreement by and among Registrant, AMS Services, Inc. and Continental Casualty Company, dated
          as of April 10, 1998. (1)
  10.10   Employment Agreement between Registrant and Hussein A. Enan, dated November 22, 1996. (1)
  10.11   Option Agreement between Insurance Information Exchange, L.L.C. and Hussein A. Enan, dated as of November 22, 1996. (1)
  10.12   Series C Stock Purchase Agreement between Registrant and Century Capital Partners, L.P., dated as of February 21, 1997
                                                                                                            (1)
  10.13   Subscription Agreement between Registrant and Nationwide Mutual Insurance Company, dated as of May 15, 1997. (1)
  10.14   Series D Preferred Stock Purchase Agreement by and among Registrant, SOFTBANK Ventures, Inc., SOFTVEN No. 2 Investment
          Enterprise Partnership and Century Capital Partners, L.P., dated as of December 15, 1998, as amended. (1)
  10.15   Agreement and Plan of Reorganization by and among Registrant, Benelytics Acquisition Corporation and Benelytics, Inc.,
          dated as of December 31, 1998. (1)
  10.16   Joint Venture Agreement by and between Registrant and SOFTBANK Corp., dated as of December 15, 1998. (1)
  10.17   Series E Preferred Stock Purchase Agreement by and between Registrant and SOFTBANK America Inc., dated as of February
          26, 1999. (1)
  10.18+  License Agreement between Registrant and Yahoo! Inc. dated as of February 12, 1999. (1)
  10.19+  Services Agreements between Registrant and State Farm Mutual Automobile Insurance Company dated as of September 15,
          1998. (1)
  10.20   Lease between Registrant and Spieker Properties, L.P. dated October 27, 1999. (2)
  10.21   Assignment of Lease and Profit Sharing Agreement by and between Registrant and Spieker Properties L.P. dated June 28,
                                                                                                          2000(3)
  10.22   Retention Agreement between Registrant and Mark P. Guthrie dated June 23, 2000(3)
  10.23   Lease Between Registrant and Oates/Allegheny Venture I, LLC Dated September 29, 2000(4)
   21.1   Subsidiaries of Registrant
   23.1   Consent of Independent Accountants
   23.2   Report of Independent Accountants on Financial Statement Schedule

</TABLE>


                                    -68-
<PAGE>

-----------

(1)  Previously filed with InsWeb's Registration Statement on Form S-1 (File No.
     333-78095), as amended.
(2)  Previously filed with InsWeb's Registration  Statement on Form 10-K for the
     year  ended  December  31,  2000.
(3)  Previously   filed  with  InsWeb's
     Registration  Statement  on Form 10-Q for the quarter  ended June 30, 2000.
(4)  Previously filed with InsWeb's Registration  Statement on Form 10-Q for
     the quarter ended September 30, 2000.

+Confidential treatment has been granted as to a portion of this Exhibit.