Allstate Is Retiring Esurance Brand

Allstate recently announced that they are officially retiring their Esurance brand. They’ll be combining Allstate Encompass and Answer Financial into one cohesive brand offering. This change should help the company lower costs to offer more competitive prices without substantially affecting their margins.

At the moment, consumers have four lines of business available to them through Allstate: Allstate, Encompass, Financial and Esurance. The company will put all of these lines of business into one offering, which will allow consumers to access all Allstate products through one access point.

Allstate released an announcement detailing the change: “In 2020 consumers will be able to “select a method of interaction without restrictions….“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.”

Allstate purchased Esurance and its partner company, Answer Financial, back in 2011 for a cool $1 billion. The Insurance Journal detailed the financials behind the companies.

“Esurance wrote $839 million in premiums in 2010 the year before it was bought,” writes the Insurance Journal. 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.”

This consolidation is clearly an effort to make their business lines more profitable. As to the efficacy of that effort, only time will tell. Consolidation certainly seems like a good place to start.

Sources:
https://www.insurancejournal.com/news/national/2019/12/19/552548.htm

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