Allstate is growing market share with its plans to acquire National General Holdings Corporation in a $4 billion cash deal expected to close in early 2021.
The Allstate Corporation is the nation’s largest publicly held personal lines insurer, serving approximately 16 million households through its Allstate, Encompass, and Answer Financial brand names and Allstate Financial business segment. Allstate-branded insurance products (auto, home, renters, condo, motorcycle, business, life and retirement) and services are offered through Allstate agencies, independent agencies, and Allstate exclusive financial representatives, as well as through the company directly.
The acquisition will give Allstate a greater market share in personal property liability while also significantly expanding its independent agent distribution.
National General (formerly the GMAC Insurance Group) is a specialty personal lines insurance holding company. Insurance products include personal and small business automobile, homeowners, umbrella, recreational vehicle, motorcycle, lender-placed, supplemental health, and other niche insurance products. The insurer has a significant presence in non-standard auto insurance.
Small business and commercial property insurance offered by National General includes general liability, business owners (BOP), professional liability (E&O and D&O), workers’ compensation, employment practices liability insurance (EPLI), commercial umbrella, commercial property, commercial RV, cargo coverage, and liquor liability insurance.
National General is licensed to operate in 50 states and the District of Columbia but focuses on underserved niche markets. Their core states for P&C policies are California, Florida, Louisiana, Michigan, New Jersey, New York, North Carolina, Texas, Virginia, and Washington.
National General sells insurance through a network of more than 42,300 independent agents, affinity partners, direct-response marketing programs, and retail storefronts.
What Does the Merger Mean for Panel Counsel Members?
Insurance defense law firms that are on either panel will want to stay close to their contacts in the Allstate panel counsel program as well as the National General panel counsel group to monitor news of the merger and any consolidation plans.
As we wrote in an earlier article titled “Allstate to Retire the Esurance Brand,” Esurance as a separately branded entity is being merged into parent company Allstate in 2020. The Esurance unit of Allstate sold its first policy online in 1999 and now offers car insurance in 43 states, plus homeowners, renters, and motorcycle insurance. Time will tell, but one possibility is that the National General panel counsel program will also ultimately be merged with the Allstate panel counsel program.
“Synergy” is an objective in most mergers, meaning the ability to integrate similar support functions. Panel counsel members will want to be alert to any longer-term effort to review panel composition and perhaps streamline law firm participation.
Click on the link to read about other insurance industry mergers and acquisitions.
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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.