The acquisition will be through Allstate subsidiary National General and SafeAuto will be integrated into National General’s direct-to-consumer non-standard auto insurance operations.
Total consideration includes a $270 million cash purchase price plus approximately $30 million in pre-close dividends of certain non-insurance assets.
“SafeAuto will accelerate our strategy of offering affordable protection solutions by lowering costs and lead to higher growth,” said Peter Rendall, president, National General.
Allstate closed on its $4 billion acquisition of National General in early January.
SafeAuto offers direct-to-consumer sales and customer contact centers through 1-800-SafeAuto and its website.
Ari Deshe, co-founder and chairman of SafeAuto, said that combining forces with National General with the backing of Allstate will allow SafeAuto to grow its platform in the non-standard space.
The insurer, which was launched by Deshe and Jon Diamond 27 years ago, reported $378 million in eared premium and a 95.3 combined ratio in 2018.
SafeAuto has twice announced plans for an initial public offering—in 2004 and again in 2019—but later withdrew both proposals, according to filings with the Securities and Exchange Commission (SEC).
The company says its customers are “budget-conscious” and value the flexibility and convenience of starting and stopping coverage and the ability to manage their policies through its mobile application. “Our consumer base includes, among others, people who depend on their cars to reach their jobs and take care of their families but who are unable to purchase more than minimum limits coverage, as well as singles and families who are starting out or starting over and seniors on fixed incomes,” the insurer told the SEC.
Ron Davies, SafeAuto’s CEO of nine years, formerly worked at Allstate. “Allstate is an iconic brand with superb capabilities and people that will enable SafeAuto to more rapidly scale and serve even more consumers,” he said.
The transaction is expected to close by the end of the third quarter of 2021.
Source: Insurance Journal
