The
Allstate unit that directly competes with
GEICO for consumers who buy auto insurance online has suffered a slip in Illinois.
Esurance, the direct insurer that Allstate acquired for $1 billion six years ago to better compete with GEICO, saw its Illinois policyholders fall by 4% over the past year to 49,317, as reported in a June 12 filing with the Illinois Department of Insurance.
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The same filing also stated that Esurance is increasing its auto insurance rates for its remaining customers by 2.7%. The spike is Esurance’s third in 18 months, as reported by the Chicago Business website. In November 2015, it raised rates by 8.2% and followed with a 3.8% bump in July 2016.
On the other hand, GEICO continues to add Illinois customers despite raising its rate along the same lines.
A filing reports that GEICO Casualty had 212,029 Illinois policyholders as of March 31, which is a 15% increase from 183,644. Since January 2015, GEICO Casualty has raised rates four separate times, by a total of 17%.
So what has enabled GEICO to yield double-digit growth amid its price hikes?
Advertising is a potential factor as GEICO continues to flood the airwaves with its advertisements even in the midst of an unusual series of rate hikes for a company that brands itself primarily by how much money it can save consumers.
Meanwhile, Allstate confessed that it has decimated Esurance’s advertising level as it spikes its prices to improve the bottom line of a unit that has never made money since Allstate’s acquisition.
Esurance’s customer erosion in Illinois is worse than in other parts of the country as its auto policies dropped 2% to 1.4 million from 1.43 million.
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