The acquisition will allow SafeAuto to grow its platform in the non-standard space. Additionally, Progressive finalized the acquisition of transportation insurer Protective Insurance Corp. ahead of schedule.
Allstate has agreed to acquire SafeAuto in a deal valued at $300 million, including a $270 million cash purchase price plus approximately $30 million in pre-close dividends of certain non-insurance assets.
The acquisition will be completed through Allstate subsidiary National General and SafeAuto will be integrated into National General's direct-to-consumer non-standard auto insurance operations.
Ohio-based SafeAuto offers direct-to-consumer car insurance that meets the minimum legal requirements in 28 states. The insurer, which was launched by Ari Deshe and Jon Diamond 27 years ago, reported $378 million in earned premium and a 95.3 combined operating ratio in 2018.
With Allstate having closed on its $4 billion acquisition of National General in early January and agreeing the same month to sell its life insurance business for $2.8 billion, it's safe to say Allstate is on the move.
“SafeAuto will accelerate our strategy of offering affordable protection solutions by lowering costs and lead to higher growth," said Peter Rendall, president at National General.
Deshe, now 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.
“Allstate is an iconic brand with superb capabilities and people that will enable SafeAuto to more rapidly scale and serve even more consumers," said Ron Davies, SafeAuto's CEO, and former vice president at Allstate.
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 transaction is expected to close by the end of the third quarter of 2021.
In other merger & acquisition news, Progressive has finalized the acquisition of transportation insurer Protective Insurance Corp. ahead of schedule. The merger, first announced in February, means that holders of Class A and Class B common shares of Protective will receive $23.30 per share in cash, without interest, for a total transaction value of approximately $338 million.
“We're pleased the transaction has closed and especially want to acknowledge the talented Protective employees who have built a strong foundation and created momentum in their markets to set us all up for success," said Karen Bailo, Progressive's commercial lines president.
Protective Insurance Corp. is a publicly traded holding company for several property-casualty insurance subsidiaries, including Protective Insurance Co., Sagamore Insurance Co. and Protective Specialty Insurance Co. The move will increase Progressive's stake in the commercial lines insurance market.
“With the closing of the merger with Progressive now complete, we look forward to starting our new chapter as part of the Progressive team," said Jeremy Edgecliffe-Johnson, Protective's CEO. “We have a long history of creating exceptional value to the motor carrier industry and are committed to become even more valuable as we move forward."
AnneMarie McPherson is IA news editor.