RJ and Makay

Allstate Corp. has agreed to pay $1 billion to buy online insurance companies Esurance and Answer Financial to capture more business from customers who shop online for insurance.  Allstate is buying the companies from White Mountains Insurance Group, Ltd., a Bermuda-based financial services holding company.

Esurance, through its website and 24/7 call center, is the nation’s third-largest provider of auto insurance.  Since 2006, the company has more than doubled the number of its policies and grown premiums by an average of 20% a year.  It sells insurance in thirty states and also offers other personal lines coverage.  The company has a total of 839,000 policies in force, and added approximately 65,000 polices in 2010, an increase of 8%.

Change Sciences has released a 70 page report which looks at the online auto insurance state of the art practices. They compared 17 carriers for effort, usability, content quality, persuasiveness, the use of social media and more. The report finds that traditional carriers are catching up and surpassing their major direct-to-consumer players like Progressive and GEICO.

The report cites that traditional carriers are getting better at practicing hyper usability with a laser focus on reducing effort whenever possible and presenting the right message at the right time to their online customers. Only a few P&C carriers have figured out how to make the tools quick and easy and lead effortlessly to the quote process. Even then only a few excel at keeping consumers motivated throughout the process.