"However, the total number of risks transacted remained low compared with the total market volumes and fell significantly short of targets initially set by inreon," the company added.

Set up in December 2000, inreon was designed to provide various kinds of facultative and treaty risks via the online platform.

The platform will remain in operation in the short term to support pending placement processes and client documentation and data needs, according to inreon.

Market rumors over the past several weeks suggested that Swiss Re and Munich Re, two of inreon's biggest shareholders, had grown impatient at the slow growth of the platform and wanted to see it sold or discontinued.

Swiss Re and Munich Re each own around one-third of inreon's shares, while the remaining shares are split between Accenture, Internet Capital Group, and management and staff.

The London-based reinsurance hub, ri3k, confirmed today that it had been in negotiations with inreon and representatives of Swiss Re and Munich Re for a possible acquisition of the inreon platform.

"We had some very productive discussions, but ultimately both parties couldn't come to any kind of agreement," said Alex Letts, chief executive of ri3k. "We couldn't find a basis where it made economic sense for both parties." (The shareholder backing ri3k is Brit Insurance Holdings in London.)

Mr. Letts said the tragedy for inreon is that the whole e-commerce sector is starting to rebound.

"As an example, China and Hong Kong are reporting record waves of e-commerce due to SARS," he said, referring to the Severe Acute Respiratory Syndrome epidemic.

"It's just tragic that this has happened to inreon at this time, just as everything is beginning to take off in the area of e-commerce and just as the insurance and reinsurance industry is beginning to commit itself to online transactions," Mr. Letts said.

One market source, who didn't want to be identified, said inreon failed because it was product-led, as opposed to market-led. "They offered what they thought was the right product without much consultation with customers. In the end, execution has let them down." (See related stories, NU, Dec. 16, 2002, and Jan. 27, 2003, for a two- part series on online platforms.)