The “safe hands” people are expanding their grip on the auto insurance industry.
Allstate Corp, long a major player on the American car insurance scene, is trying to expand its online insurance sales. To that end, it has recently announced that it is in the process of acquiring Answer Financial and Esurance.
The Chigago Tribune reported on a conference call earlier this morning, in which Allstate announced that it would be purchasing both of the other companies for $1 billion. Elaborating on reasons for doing so, Allstate Chief Executive Tom Wilson said that while the company had been growing its direct-to-consumer sales, it hadn’t yet, “…captured share from other people.”
Wilson also said that he wanted his company to, “…compete aggressively in that segment of the market.”
Last year, Allstate’s direct business, which had improved by 19.8 percent over the previous year, totaled $745 million, while Esurance, which does its insurance sales entirely online, wrote $836 million in premiums in the same year.
Of course, direct sales are only a small slice of the Allstate pie. The insurer’s revenues from property-liability premiums were significantly higher than $745 million in 2010 – almost $26 billion, actually.
Allstate, currently the second-largest home- and auto insurer in the United States, was trading stock at $32.37 earlier today (down 0.5 percent). It is purchasing Answer Financial (which offers customers the opportunity to have online insurance quote comparisons) and Esurance from the White Mountain Insurance Group