Esurance Partners With Security First Insurance to Offer Homeowners Coverage in Florida

Esurance, the online insurance quote company to be acquired by Allstate Corp., is making its first foray into the Florida homeowners market, partnering with Security First Insurance Co. to offer homeowners coverage.

"It’s a great time to enter [the Florida market] as other carriers are exiting," Esurance spokesman Danny Miller said, adding that the partnership offers an excellent bundling opportunity for Esurance, which offers a variety of products, but is known primarily for its online auto-insurance quotes.

Security First has a good presence in Florida, Miller said.

Homeowners in Florida who have received a rate increase, nonrenewal or cancellation notice from their insurer can receive a quote over the phone for a Security First policy through Esurance. They also may qualify for discounts. Over-the-phone quotes started on June 17, Miller said.

Allstate last month agreed to acquire Esurance and Answer Financial from White Mountains Insurance Group Ltd. for $700 million plus tangible book value. The acquisition is expected to have a total price of about $1 billion when it concludes in the fall (BestWire, May 18, 2011).

Esurance is the third most-shopped brand for auto insurance in direct-market distribution, Allstate said, behind market leader Geico, with an estimated 38% share, and Progressive, with a 14% share. Esurance has a 2% share, and combined with Allstate, that market share would be boosted to 4%.

Allstate plans to keep the Esurance and Answer Financial brands, which will operate independently, and will retain the senior management teams, including Gary Tolman, Esurance's president and chief executive officer.

Florida Gov. Rick Scott recently signed into law legislation designed to address many of the cost drivers in the Florida property-insurance market (BestWire, May 18, 2011).

Security First, based in Ormond Beach, Fla., had direct premiums written of $146.2 million last year, including $127.2 million in homeowners' business, according to BestLink, which provides online access to A.M. Best's database of insurance information. Its combined ratio deteriorated to 117.4 from 101.9 in 2009, according to BestLink. The company has more than 115,000 policyholders.

Esurance, launched in 1999, had some 545,000 policies in force as of the first quarter of 2011, with written premium of $839 million in 2010. The company, with 1,700 employees, sells insurance to consumers in 30 states.

The companies with the largest market share in the Florida homeowners' multiperil market last year were: Citizens Property Insurance Corp., with a 16.7% market share; State Farm Group, with 14.15%; Universal Insurance Holdings Group, with 8.71%; USAA Group, with 5.06%; and St. Johns Insurance Co. Inc., with 3.58%, according to BestLink. Security First Insurance Co. had a 1.84% market share.

The Esurance Insurance Group currently has a Best's Financial Strength Rating of A- (Excellent). The rating is under review with positive implications. The Allstate Insurance Group currently has a Best's Financial Strength Rating of A+ (Superior).(By Diana Rosenberg, senior associate editor, BestWeek)