Allstate to drop Esurance as part of 'transformation' plan
Northbrook-based Allstate Corp. will phase out its Esurance brand in 2020 as part of an overall "transformation growth plan" for the insurance company.
Allstate purchased Esurance in 2011 as a way to break into the online insurance industry, which was dominated at the time by companies like Progressive and Geico. Now, insurers are trying to navigate legions of agents and online systems amid a changing consumer landscape.
Under the agency's plan announced Thursday, the Allstate, Encompass and Answer Financial brands will be combined into one business model, which officials say will lower costs and support more competitive prices without reducing margins. Changes in the structure will make it easier for consumers to work with Allstate either through branded agents, online or through call centers.
Allstate CEO Tom Wilson said the move will help the Allstate brand amid competition from its rivals.
"It gives us the ability to not invest in the Esurance brand anymore and put all that money on the Allstate brand, which is hundreds of millions of dollars," Wilson told Bloomberg News in an interview. "That gives us the ability to compete more effectively and we think it will drive more growth.
"This reaffirms our commitment to Allstate agents with increased advertising, enhanced new business opportunities and higher new business compensation," Wilson added.
In addition to improving customer service, Wilson said several improvement will also be made in technology and its product lines to "enable Allstate agents to focus on growth and relationships.
"The Transformative Growth Plan will enable us to remain a strong competitor," Wilson said.
Bloomberg News contributed to this report