Auto Insurer Offers Savings On More Than Car Insurance
09 Februar 2009 - 8:07PM
Dow Jones News
Allstate Corp. (ALL) hopes to refashion its good hands image
into a helping hand for anxious consumers: Anyone visiting an
Allstate Web site can print out a free one-day pass to Sam's Club,
the discount warehouse owned by Wal-Mart Stores Inc. (WMT).
The main message "is to demonstrate we are not only helping to
make insurance more affordable, but to make other areas of life
more affordable too," said Lisa Cochrane, vice president of
marketing at Allstate, in a recent interview.
Normally Sam's Club charges shoppers a membership fee.
Allstate's Web site also offers other specially negotiated
discounts on goods and services.
With the economy running on empty, consumers have begun cutting
back even on essential expenses like insurance to cover their homes
and cars. Some are dropping coverage altogether; others are
reducing their premiums by switching to more basic coverage or
raising deductibles. So insurers have to fight for business, even
in the downturn. This pull-back will force insurers to change and
perhaps even increase their advertising, even as many other market
segments pull back.
While auto insurers have long promoted cost savings, the
emphasis has lately been ramped up. Geico, a unit of Berkshire
Hathaway Inc. (BRKA, BRKB), has given its popular caveman
advertising characters, and their message of ease of use, a break.
Current advertisements focus on a new image: A stack of money that
represents how much drivers could save if they buy Geico.
Progressive Corp. (PGR) also runs ads touting savings for
customers.
Robert Hartwig, president of the Insurance Information
Institute, said that auto insurers have been increasing their
advertising spending for around a decade, reaching a record of
around $4.1 billion in 2007.
He expects that total to rise slightly in 2008, or perhaps stay
flat, but he doubts it will drop, even though overall premium
growth in the industry was negative in 2007 and 2008.
A recent study by the Insurance Research Council estimates that
by 2010, 16.1% of drivers may be uninsured, up from 13.8% in
2007.
"Some insurers are recasting themselves," as the market weakens,
the Insurance Information Institute's Hartwig said, to "emphasize
affordability" in the down economy.
On a new Web site Allstate launched to help consumers save
money, the company trumpets that it has been around since the Great
Depression, and knows something about hard times. "We've protected
America through twelve recessions. We'll all get through this one,
too," its Web site says.
In addition to the Sam's Club offer, Allstate offers discounts
on restaurant gift cards as well as more general tips on saving
money.
One money-saving suggestion is to visit a department store for
free perfume samples rather than buy it. "A spritz or two of your
favorite sample on your neck and you're set," the Web site
suggests.
Cochrane said, "It is all designed to let people know that
Allstate gets it. We have experience in tough times."
Longtime Allstate television spokesman and actor Dennis Haysbert
will promote the Sam's Club and other discounts on television
commercials. Other commercials have Haysbert naming rival insurers
and how much drivers saved when they switched their auto insurance
to Allstate.
Cochrane said Allstate is looking for other deals it can pass
along to consumers as bad times spread.
Sam's Club spokeswoman Susan Koehler called the Allstate
free-pass partnership a "pilot" for the company, and said it may
expand on the theme by partnering with other companies to offer
consumers a break.
As insurers narrow the focus on saving money, some Allstate ads
even suggest that customers switch insurers mid-policy, which most
consumers didn't bother to do in better times.
"You don't have to wait for your policy to expire," said
Cochrane of the new message. "We can start saving you money right
away."
The Allstate Web site is at: www.allstate.com/GoodHands.
-By Lavonne Kuykendall, Dow Jones Newswires; 312-750-4141;
lavonne.kuykendall@dowjones.com