This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Allstate Fights Back Against Geico With Esurance and Clever Marketing

NEW YORK (TheStreet) -- Allstate (ALL) has seen customers come and go over the years to rivals like Geico, a unit of Berkshire Hathaway (BRK.B). Geico, known for its clever commercials, is now seeing competition for online customers from its competitor Allstate. Allstate, which operates a large agent network around the country, appears ready to attract new customers with a "speed matters" approach for the digital age.

At 2:53 p.m. today, Allstate was trading at $53.99, up 0.24% today, and flirting with the 52-week high of $54.30. Geico was trading at $113.67, up 0.43% for the day.

Geico has long been known for its catchphrase: "15 minutes could save you 15% or more on car insurance." This motto and an aggressive advertising campaign powered Geico to be one of the leaders in online care insurance. Berkshire Hathaway bought Geico in 1996 and has controlled it ever since.

To compete in the same online market, Allstate decided to also go the acquisition route. In 2011, Allstate bought Esurance for $1 billion. The largest publicly traded U.S. home and auto insurer, Allstate is now using Esurance to take on Geico directly. In new commercials narrated by actor John Krasinski, Esurance tells customers that "15 minutes for a quote is crazy. With Esurance, seven-and-a-half minutes could save you on car insurance. Welcome to the modern world."

While Esurance doesn't make the same promise to save 15%, it does offer an appeal to time-sensitive customers and takes a swipe at Geico. Esurance has also been a key source of growth at Allstate. In the fourth quarter, net written premiums for Esurance increased 23%. Policies increased 26.7% at Esurance in the fourth quarter. For the full fiscal year, Esurance saw net written premiums increase 27.9%. That is a key piece for Allstate, posting revenue of $34.5 billion. That's an increase of 3.6%.

Allstate is not only making it better for customers with increased speed. They are continuing to make investment in the company more attractive with an increasing dividend and share buyback plan. The company recently released it yield of more than 2% annually. Allstate also increased its share buyback to a level above $2.5 billion, representing more than 10% of current market capitalization.

Time doesn't always matter to customers -- car insurance shoppers likely care more about pricing and benefits. However, as investors will find out, Allstate is a huge insurance company growing year after year. The double-digit growth seen by Esurance is a true catalyst for the company going forward. An added marketing and promotional campaign could lead to an inflow of customers.

Allstate surprisingly increased its agency count to 11,600 at the end of 2013. The company continues to expand its physical presence in many regions in the Western and Southern parts of the U.S. With the increased push for Esurance, Allstate will continue to prove to investors that "you're in good hands."

At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,012.33 -27.16 -0.16%
S&P 500 1,991.73 -0.64 -0.03%
NASDAQ 4,546.5980 +14.4940 0.32%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs