Allstate is retiring its Esurance brand and combining its remaining Allstate, Encompass and Answer Financial personal lines brands under a single business model.
The company says dropping Esurance and creating the new business model will lower costs and allow it to charge more competitive prices without reducing margins.
It will also save money that it says it will redirect towards more support for its Allstate brand and agents.
Consumers currently can separately access Allstate personal lines products through four channels: Allstate (exclusive agents), Encompass (independent agents) and Answer Financial and Esurance (online and call center). However, a consumer’s choice of access is limited.
Placing all the units in one business segment will allow consumers to access all Allstate personal lines products through their choice of access. According to the announcement, in 2020 consumers will be able to “select a method of interaction without restrictions” and, as a result, “it will no longer be necessary to utilize both the Allstate and Esurance brands for direct sales and the Esurance brand will be phased out in 2020.”
The auto and home insurance offerings now available by the various brands will be joined in a “circle of protection” that will include personal liability and life insurance, product protection plans and identity protection.
The insurer said it plans to centralize customer service to improve consistency and further reduce costs and enable Allstate agents.
“This reaffirms our commitment to Allstate agents with increased advertising, enhanced new business opportunities and higher new business compensation. This is about leading, not following,” said Tom Wilson, chair, president and CEO.
These sellers of personal lines insurance products are part of what is known as the Allstate Protection and account for 90% of Allstate’s consolidated insurance premiums.
In 2011, Allstate paid $1 billion for Esurance and its partner insurance agency, Answer Financial, which also sells policies from other insurers. Esurance has been a leader in selling insurance directly to consumers online.
Esurance wrote $839 million in premiums in 2010 the year before it was bought. In 2018, Esurance wrote $1.9 billion in premium. It has had difficulty turning an underwriting profit. It lost $25 million on underwriting in 2018, an improvement from $56 million loss in 2017 and $124 million loss in 2016.