Allstate announced Tuesday it might buy nonstandard auto insurer SafeAuto for $270 million in cash contributing to $30 million price of “pre-close dividends of certain non-insurance assets.”
SafeAuto does business in 28 states and concentrates on affordable state minimum car insurance. Allstate intends to fold it into National General, which Allstate recently bought for $4 billion., following a SafeAuto purchase’s expected third-quarter closing.
“It has been an honor to have caused a lot of these past 27 years building SafeAuto right into a company focused on diving in of auto insurance simple and inexpensive,” SafeAuto co-founder and Vice Chairman Jon Diamond said inside a statement. “We're happy to turn the reins over to Allstate and National General, which together, will take Playing It Safe with SafeAuto to the next level.”
Allstate said SafeAuto would “add capabilities and distribution” to National General’s nonstandard auto insurance direct business “and leverage National General's history of acquiring and integrating companies to accelerate growth. SafeAuto broadens the company's product and distribution footprint.”
“SafeAuto will accelerate our strategy of offering affordable protection solutions by lowering costs and lead to higher growth,” National General President Peter Rendell said in a statement Tuesday.
“I am confident that combining forces with National General using the backing of Allstate will allow SafeAuto to develop its platform in the non-standard space,” SafeAuto Chairman and co-founder Ari Deshe said in a statement. “I wish to thank all of our past and present associates for his or her contributions to our success during our 27-year history.”
Allstate was the nation’s No. 4 private passenger auto insurer this past year with nearly $22.73 billion in direct premiums written and a 9.11 percent share of the market. Just before its acquisition, National General have been ranked No. 15 using more than $3.15 billion in direct premiums and a 1.26 % share.
Dun & Bradstreet has projected SafeAuto brings in $438.01 million companywide today, but not all that will probably be derived from private passenger car insurance premiums. Even if it were, the addition combined with National General revenue wouldn’t be sufficient for Allstate to dethrone Progressive because the nation’s No. 3 auto insurer. Progressive recorded a lot more than $33.17 billion in direct premiums written this past year.
“National General's integration of Allstate's independent agent businesses has made excellent progress, and also the team has the ability to integrate SafeAuto into its direct insurance business,” Allstate personal property-liability President Glenn Shapiro said inside a statement.
