Allstate announced yesterday that it would sell its direct auto insurance businesses in Germany and Italy to the U.K.’s Direct Line.
The German operation, launched in 1997 has around 117,000 policies in force. The Italian branch, opened last year, has about 27,000 policies. Direct Line, a subsidiary of the Royal Bank of Scotland which began business in 1985, is the U.K.’s biggest auto insurer with around a 40 percent market share through telephone and Internet sales.
Allstate indicated it planned to concentrate on business operations in North America, while Direct Line views the acquisition as an opportunity to further expand its operations in Continental Europe. If its success in the Spanish auto market – it’s now the country’s largest direct telephone auto insurer with over 300,000 policies in force – is any indication, it will be a formidable competitor.