Geico outpaces other big auto insurers in Illinois

March 20--Home-field advantage didn't mean much for Illinois-based car insurers in 2013.

The state's three biggest vehicle underwriters, all headquartered in the Land of Lincoln, saw their annual growth rates dwarfed by that of Geico, a new study shows.

The Berkshire Hathaway unit wrote 18 percent more in auto premiums in Illinois last year than it did the year before, for a total of $324.9 million, according to an analysis by SNL Financial.

Meanwhile, the two biggest players, Bloomington-based State Farm and Northbrook-based Allstate, grew by single-digit percentages, the Charlottesville, Va.-based data cruncher found.

Nationally, Geico, which sells mostly through the Internet, has surpassed Allstate to become the nation's second-biggest auto insurer.

"Geico's cost advantage is the factor that has enabled the company to gobble up market share year after year," Berkshire Hathaway Chief Executive Warren Buffett said in a recent letter to shareholders. "Our little gecko continues to tell Americans how Geico can save them important money."

Geico also offers "reliable service," Buffett said.

Geico is still well behind Allstate in Illinois, though Geico last year jumped over Farmers and Progressive to grab the No. 4 spot. It's now behind No. 3 Country Financial, whose Illinois business shrank by 0.6 percent, to $437 million, SNL senior editor Tim Zawacki told the Tribune on Monday.

"Also, Geico's growth rate in Illinois was its fastest in the state on a year-over-year basis since 1999," he said.</p>

Allstate's auto premiums in Illinois in 2013 grew by 1 percent, to $675.1 million. Spokeswoman Shaundra Turner said the number of Allstate auto policies on the books in Illinois also grew, as did its ranks of exclusive agents.

Nationally, Allstate also points out that it's still far larger than Geico when home insurance is included in personal insurance sales.

Country Financial spokesman Chris Stroisch said the decline in his company's auto premiums in 2013 was due at least partly to several auto rate reductions it has made during the past three years.

"In Illinois, cumulative auto rates for Country Financial customers have decreased by about 2 percent since 2011," he said.

Counting the costs

Although consumer prices rose 0.1 percent in February, according to numbers released Tuesday by the Bureau of Labor Statistics, prices for car insurance were up 0.3 percent, as were prices for vehicle maintenance and repair.

Elsewhere in the transportation sector, airline fares rose 1.3 percent from the previous month, records from the Labor Department unit show.

Cutting ties

Chicago-based private equity firm Wind Point Partners plans to sell portfolio company Hearthside Food Solutions of Downers Grove to Goldman Sachs and Vestar Capital.

Wind Point formed Hearthside in April 2009 with Rich Scalise, who previously was president of Ralcorp Frozen Bakery Products. He also spent 18 years with ConAgra Foods.

During the past five years, Hearthside has grown to more than $1 billion in sales and 20 U.S. facilities, including in Des Plaines, Elk Grove Village and Gibson City, Ill. It made four acquisitions under Wind Point's ownership.

Hearthside is a bakery and a contract maker of such private-label products as cookies, crackers, cereal and granola for some of the world's biggest brands.

Terms weren't disclosed.

Other food businesses Wind Point owns include Massillon, Ohio-based salty-snacks-maker Shearer's Foods; Deerfield Beach, Fla.-based ribs-maker Rupari Foods; and Tulsa, Okla.-based biscotti-maker Nonni's.

Mark Burgett, Wind Point's managing director, oversaw the deal. He joined the firm in 2004, having previously worked for Morgan Stanley and Robert W. Baird & Co. He has a bachelor's degree from Northwestern University and a master's in business administration from Columbia Business School.

Wind Point has a team of about 40 outside advisers that includes Dennis Bookshester, former chief executive of Fruit of the Loom; Bruce Carbonari, former CEO of Fortune Brands; Bill Denton, former president of housewares and office products for Newell Rubbermaid; and Jim Ringler, former vice chairman of Illinois Tool Works.

Besides Scalise, others helping to run its portfolio companies include C.J. Fraleigh, former CEO of Sara Lee's North American operations; Skip Zimbalist, former CEO of Times Mirror Magazines; and David Bere, former president of Dollar General.

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