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Allstate subsidiary teams up with Wal-Mart to conquer more of the car insurance market

Esurance, a subsidiary of the American insurer Allstate Corporation, is to work together with Wal-Mart on the online auto-insurance market. The aim of the cooperation is very simple: selling more policies. At the outset the cooperation will start at 150 Wal-Mart Stores in the state of Illinois. Potential customers will be able to get a policy with a discount by internet or by phone after have signed an agreement in one of the Wal-Mart Stores.

Allstate wants to explore new ways of attracting customers. The company is faced with a few large competitors on the market, namely Geico (a subsidiary of Berkshire Hathaway, the holding owned by the most famous investor in the world – Warren Buffett) and Progressive Corporation. Progressive is a fast growing auto insurance company with a broad-based online presence.

The pilot program is only a test case, and even if it is successful it isn’t certain that the program will be extended to other areas of the United States. The program has nothing to do with Allstate itself, subsidiary company Esurance alone is taking part in the experiment. In the case of success, the program will be evaluated and possibly re-started on a larger scale. The battle for the American auto insurance market isn’t over, and, all players on the market are trying to find alternative ways of enlarging their market share.

Customers are in for a pretty good deal, as the online insurers are coming up strongly and this means that prices remain under pressure. Wal-Mart believes that expansion in the financial services sector and the auto insurance market could be very lucrative. Metlife, a major U.S. life insurer, also sells life insurance policies at Wal-Mart stores in a few American states. In the near future other distributors may perhaps sign an agreement with insurance companies to boost their profitability. This evolution augurs well for customers.

 

16/07/2014  |  Tim Harrup

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TAGS : Esurance Wal-Mart 
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