Allstate to acquire Esurance, Answer Financial

Northbrook insurance giant Allstate Corp. announced Wednesday that it will buy Esurance and Answer Financial for $700 million plus the tangible book value of the entities acquired at close.

The total price is expected to be about $1 billion. The transaction is expected to close in the fall and is anticipated to be non-dilutive to Allstate’s earnings in the second full year of ownership.

“Consumers today expect to have their specific needs met by their insurance companies. Our strategy is to focus on individual preferences and utilize different value propositions for distinct consumer segments,” said Thomas J. Wilson, Allstate’s president, chairman and chief executive officer.

He said that Esurance would allow the company to expand its ability “to serve customers that are more self-directed but still prefer a branded product. Answer Financial will strengthen our offering to individuals who want to be offered a choice between insurance carriers and are brand-neutral.”

Wilson said that will make Allstate the only company “serving all of these consumer segments with unique insurance offerings.”

Esurance is the third-largest provider of online auto insurance quotes and has a 24/7 call center. The company has more than doubled policies in force in the past five years.

Answer Financial is aimed at people who are looking for a choice among insurance companies on a self-directed basis. Customers get quote comparisons and help choosing from 20 brand-name insurance companies.

The transaction has been approved by both companies’ boards of directors and is expected to close in fall 2011. The purchase is subject to regulatory and other customary closing conditions, including review by antitrust authorities and state regulators.