Allstate plans to phase out Esurance brand
(Bloomberg) -- Eight years after buying Esurance, Allstate Corp. Chief Executive Officer Tom Wilson is getting ready to say goodbye to the online seller of home and auto coverage.
The insurer will still sell policies over the internet as it phases out the Esurance name next year and reworks how consumers are directed to its web-based platforms and agencies, according to a statement Thursday. Wilson said the move will help the Allstate brand amid competition from rivals including Berkshire Hathaway Inc.’s Geico and Progressive Corp.
“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 said Thursday in an interview. “That gives us the ability to compete more effectively and we think it will drive more growth.”
Allstate has centralized some service functions for policies that had typically been handled by agencies. The company also plans to organize its Allstate, Esurance, Encompass and Answer Financial groups into one business, a move that Wilson said should free up more money that can be spent on efforts such as new technology.
Allstate bought Esurance and Answer Financial in 2011 in a bet on selling insurance through the internet. Now, insurers are trying to navigate legions of agents and online systems amid a changing consumer landscape.
“We’re changing the nature of the work done in the Allstate agencies,” Wilson said. That will help agents “do the high value-added work of doing advice, annual plans, being an advocate in a claim, having a relationship --- things people want. This is about changing the nature of what those agencies do for our customers and the brand has therefore got to stand for that.”
Wilson argued that the moves aren’t designed to sideline the agents.
“This reaffirms our commitment,” he said. “We’re all in, our customers want you, we just need to make sure you’re doing what they want and they’re not paying you to do something they don’t want you to do,” he said about the agents.