Is National General the same as Allstate?

Allstate is integrating National General Accident & Health into its umbrella for Medicare supplement offerings. The new Medicare supplement carrier will be rebranded as Allstate Health Solutions. The Allstate Corporation acquired National General Holdings Corp. in January of 2021.

National General Holdings Corp. is Acquired by Allstate Insurance for $4 billion.

The massive $4 billion acquisition of National General and its subsidiaries by the insurance behemoth Allstate Corporation has caused quite a stir in the market.

These two renowned erstwhile adversaries are working together to give their customers more comprehensive coverage in the thick of the coronavirus. It’s no hidden story that the pandemic outbreak has further caused anxiety and uncertainty for insurers. The acquisition, which was wholly paid for in cash, is anticipated to revolutionize the insurance industry.

 

Value Addition of National General to AllState’s Arsenal

Illinois- based Allstate has been promising all its customers nothing less than wholesome and complete security since 1931. Their new acquisition further strengthens their promise of security and faith as National General brings to the table the long-standing experience of more than 70 years and some pretty refreshing set of coverings. Thus expanding their service brochure and client base.

The business, formerly known as GMAC Insurance, dated back to 1939 and was a division of General Motors. In 2013, it adopted the moniker “National General.”

Their 42,300 independent agents and tremendously profitable vehicle insurance policies will greatly complement Allstate’s capabilities. National General reported an operating income of $319 million in 2019 and gross yearly written premiums of $5.6 billion. The company receives about 60% of its premiums from auto insurance contracts. Personal and rental car insurance, homes, umbrellas, recreational vehicles, motorcycles, lender-placed, supplemental health, and other specialized insurance products are all offered by National General.

The difference of the deal in question will be visible to National General stockholders in the expected $34.50 per share they will receive; it is understandable why they readily approved the merger.

Allstate claimed the agreement would increase its profitability and market share regarding personal liability insurance, which covers vehicles, RV, and house insurance.

 

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Auto Insurance Overview: National General vs Allstate

There are two significant insurance providers that focus on offering auto insurance to American citizens: Allstate and National General. The discounts offered by National General are widely referred to as “SmartDiscounts.”

Generally speaking, even without applying these savings to the plans, it promises to save clients an average of $442 each year. Additionally, Allstate offers a variety of driver discounts and has excellent financial strength ratings. The scores for National General’s financial stability could use some help.

However, their great roadside assistance program is a showstopper deal indeed. Adding cherry on top, Allstate has better roadside service ratings and higher J.D. Power rankings. To find out what policy from the particular domain will suit you the best, clients may have to dig a bit deeper into the current standing of policies.

 

Is the Merger Deal Growth Oriented?

One of the biggest life insurance businesses in the world, Allstate, raised a lot of brows when it announced a significant acquisition that will increase its size. National General Holdings was purchased by the firm for $4 billion, or around $34.50 per share. Needless to say, Allstate’s reach in the autonomous agent channel has increased as a result of this transaction.

However, is bigger in this instance better?

National General is an insurer of homes, cars, and lives, much like Allstate.

Despite having a significantly smaller insurance company, National General is the second-largest U.S. lender-placed insurance company that has one of the biggest networks of independent agents to offer its products.

 

Why did Allstate Acquire National General?

The partnership between National General and independent insurance agents is a significant factor, as is clear to us by now. Currently, Allstate distributes its products mostly through its own salesforce, but increased access to independent agents will enable Allstate to acquire market share in areas where it currently has no agents. The merger would make the new business one of the top five independent agent insurance carriers.

The merger has further advantages.

National General Holdings Corp. has been a welcome addition to Allstate’s total product portfolio because of its strong position in lender-placed and higher-risk vehicle insurance products. The business targets nonstandard drivers, such as inexperienced drivers, those with driving infractions, and clients who have low credit score issues. All 50 states have granted National General permission to dispense auto insurance coverage. There is further AI growth potential in traditional car and homeowners insurance.

 

An Ambitious Step by Allstate Corporation 

This agreement was primarily drafted on a growth-oriented approach. For insurance providers like Allstate, the COVID-19 pandemic has indeed been difficult. Fewer auto insurance coverage was being offered as a result of decreased driving. When the business reported its first quarter of 2020, its sales were down 8.3%.

Allstate’s influence among the broader bandwidth of general masses through independent contractors should be widened as a result of the acquisition of the National General. Cost synergies from the deal are also anticipated, which should boost the bottom line.

 

Bigger the Stakes, Higher the Stocks

Even though Allstate is already a sizable insurance provider, adding National General has indeed strengthened its position. The agreement should result in significant revenue and earnings growth and propel Allstate into the leading independent agent insurance carrier.

To be more precise, by integrating Encompass and Allstate’s Independent Agent operations with National General, Allstate rises to the top 5 personal line carriers in the independent agent channel of distribution. Only four insurers hold a market share greater than 5%. Together, the following ten insurers own less than 30% of the market.

Allstate is taking fascinating strategic steps that could help them for years to come despite the COVID-19 outbreak.

 

Key Takeaways of the New Insurance Policies

Despite being largely recognized for its auto insurance, National General also provides house insurance and RV insurance. The business specializes in providing high-risk drivers with nonstandard auto insurance, making it a viable choice for people who have had less-than-stellar driving records and have trouble finding coverage.

  • In some areas, you may acquire quotes and buy plans online, which makes it possible for you to obtain coverage swiftly.
  • Guarantee for customer satisfaction with claims – If you are not happy with the way National General handled your claim, they will pay your deductible up to $250. Except for Washington, all states offer the claims satisfaction guarantee. However, there are certain terms and conditions applied.
  • Available SR-22 forms – In some states, drivers whose driving privileges have been suspended may need to submit an SR-22 form or a Financial Responsibility Certificate. The form attests that you adhere to the minimum liability standards set forth by law. If necessary, the National General will submit the SR-22 on your behalf to the state licensing body.

 

What Determines Your Car Insurance Cost and Availability?

Cost

Your insurance premiums are determined by a number of variables, including your age, gender, and driving history, by National General, like other auto insurance providers.

Because National General serves clients with spotty driving records, its rates are frequently significantly higher than the industry standard. For precise quotes, visit the official website of National General Holdings Corp.- An Allstate Company.

 

Availability

All 50 states have granted National General permission to provide auto insurance to their citizens.

However, prices, coverages, and discounts might differ by region, so speak with a National General agent to learn more about the insurance alternatives in your neighborhood.

 

 

Discount Eligibility on Car Insurance

Despite no longer being known as GMAC, National General continues to serve the needs of both General Motors customers and corporate personnel. Both of these organizations and anyone with an OnStar subscription gets promising discounts. The business also provides the most popular kinds of discounts. You will receive a discount if you insure more than one car with National General or if you have bought more than one policy, such as house and auto insurance.

There are reductions offered for good drivers, paperless invoicing, and full payment of the annual fee. Additionally, drivers can pay a fee to join the National General Motor Club. This service functions similarly to other well-established vehicle clubs and provides free transportation, discounted roadside assistance, towing services, and emergency expense reimbursement.

 

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Conclusion:

The coalition of Allstate and New General has definitely won brownie points on both sides. While it can be said that the operations of this merger are still in their nascent stage, it would be interesting to see the progression of Allstate post this very expensive purchase.

Sources:

https://www.allstatenewsroom.com/news/allstate-closes-acquisition-of-national-general-holdings-corp/

https://nationalgeneral.com/about-us/our-story