Allstate has announced the acquisition of insurance giant Esurance as well as its subsidiary Answer Financial. Allstate will pay in excess of $1 billion for both. The move comes in an effort to capture a bigger portion of the online market. An increasing number of consumers are shopping for insurance policies online, making Esurance a popular medium for finding affordable coverage.
The massive insurance corporation has witnessed business in its personal lines dwindle of late. Allstate is looking to expand its service to online consumers, many of whom favor the ease of electronic purchase over dealing with agents. The purchase of Esurance will allow Allstate to compete with electronic insurance goliaths Progressive and Geico.
“Consumers today expect to have their basic needs met by insurance companies,” says Thomas J. Wilson, president and CEO of Allstate. Wilson insists that the company’s physical agencies perform remarkably well in the industry and that he wants to see that performance translated into the digital world. While Allstate has been attempting to expand their direct channel for some time, this is the first successful effort they have made toward that goal.
A number of Allstate agents are concerned that this means their positions with the company may be put at risk. If the Esurance initiative proves successful, agents are worried about becoming expendable. Time will tell whether their suspicions are accurate or not.
Esurance will continue to function in the same capacity as it has prior to its acquisition by Allstate.