Allstate completes $4bn National General acquisition
US insurer Allstate has confirmed the completion of its multi-billion dollar acquisition of National General, scaling up its personal lines business and adding billions in premiums.
The deal was announced in June 2020 amid the early height of the pandemic. Allstate agreed to buy the New York-based firm in an all-cash deal worth around $4bn, or $34.50 per share.
National General offers a suite of property-liability products through a network of independent agents, specialising in non-standard auto insurance at a time when claims plummeted under the pandemic. It generated operating income of $319m in 2019, with $5.6bn in gross premiums written.
Barry Karfunkel, Co-Chairman and CEO of National General, said combining expertise from both firms through the acquisition would form “a top-five personal lines carrier for independent agents” and expand the array of products it could offer customers.
The acquisition will add $4bn in personal lines premiums and increase Allstate’s market share in the segment by 1%, brining 10% of the overall market under its banner, according to Tom Wilson, chair, president and CEO of The Allstate Corporation.
The move will also boost Allstate’s existing independent agent business, Wilson adds: “Independent agents will now have more protection offerings for customers, with a strong technology platform creating growth opportunities for them and Allstate. National General’s accident and health business will also further expand Allstate’s circle of protection.”
Allstate remains solid during COVID-19
Allstate swiftly pivoted to virtual as the pandemic took hold in 2020, including the management of the majority of claims. Active policies in the three months to 30 September 2020 grew 27% year-on-year, up to 173m, while the firm also benefitted from fewer automotive claims due to reduced miles driven under the virus. Total revenues of $11.5b in the third quarter of 2020 increased 3.9% compared to the same period in 2019, though this was partly offset by reduced investment income.