Esurance—the Allstate unit that sold its first policy online in 1999 and now offers car insurance in 43 states, plus homeowners, renters, and motorcycle insurance—is being phased out in 2020 as a separate brand.
Technology has been at the core of the Esurance brand, with a focus on helping policyholders do things quickly and easily online or with a mobile app. The Esurance unit also used technology to build operating efficiencies and reduce expenses, which it passed on to customers in the form of lower priced premiums.
Settling auto insurance claims with digital photos is one form of innovation cited by the Allstate as it strives to adopt proactive change designed to accelerate growth in its personal property-liability business.
Prior to this change, Allstate offered four separate platforms for personal lines policyholders: Allstate, Encompass, Answer Financial and Esurance. The growth plan combines all the units into one business segment that will allow consumers to interact with all Allstate personal lines products through their choice of access.
According to a December news release, Allstate “is embarking on a Transformative Growth Plan that leverages the Allstate brand, people and technology to accelerate growth in its personal property-liability business. A leader in taking a consumer-focused approach to insurance, Allstate will expand customer access, improve customer value propositions, and increase investment in growth and technology.”
The decision to phase out the use of the Esurance brand trade name is part of the Allstate Growth Plan. The change in branding resulted in a $51 million, pre-tax charge ($40 million, after-tax) for impairment of the Esurance trade name intangible asset from the 2011 acquisition. This amount will reduce net income but will be excluded from adjusted net income.
The restructuring initiative meant that it was no longer necessary to utilize both the Allstate and Esurance brands for direct sales.
Allstate is one of the nation’s largest insurers with 136 million policies in force, protecting cars, homes, motorcycles, lives, personal devices and identities. The company employs 88,000 people.
Panel Counsel Considerations
Allstate panel counsel members will want to take note of the news and stay close to their claims adjusters. This move has some similarities taken by Nationwide in the past, which rolled up its Harleysville and Scottsdale units into the parent company (and discontinued separate panel counsel programs) several years ago.
The move also draws attention to moves within big insurance carriers to aggressively adopt technology on many fronts – pricing, claims review, online policy applications, etc. Insurance defense law firms may want to review longer term implications for their own operations and knowledge base in regard to technology.
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This article is provided for educational purposes only. It is not to be interpreted as legal advice or an opinion in regard to any topic discussed. The article should not be used as a substitute for legal advice from a licensed attorney in your state. Every situation is different and circumstances vary widely depending on the governing state law, policy provisions, and related considerations.