How Allstate Got Its Name, Are You Really In Good Hands?
Allstate got its name from a popular car tire sold by Sears, the company’s history itself is full of interesting ups and downs.
Written by Serena Aburahma
Reviewed by Kathleen Flear
You would think a broad-encompassing name like
Allstate
was intended to describe how widely a company provides service. Or maybe just to assure you that your auto coverage would follow you on any road trip across the country.But in reality, Allstate was named after a tire. Yes, a tire.
The nation's second-largest property and casualty insurance company, The Allstate Corporation, has an interesting story behind its name and how it began as a
car insurance company
.How did Allstate get its name?
The idea to create an all-new automobile insurance company was birthed during a conversation as two neighbors played bridge on their way to work on a commuter train in 1930, according to
Encyclopedia.com
. Insurance broker Carl L. Odell suggested to his friend Robert E. Wood, then president and CEO of Sears, Roebuck, and Co., that an insurance company selling by direct mail could save a large amount of money paid in commissions to insurance agents, like himself.
Wood liked the idea and passed it along to the Sears board of directors, which also recognized the advantages and moved quickly to launch Allstate Insurance Company. The board selected the company's name from a brand of automobile tire sold through the famous Sears catalog.
Allstate began selling policies to consumers across the country in April 1931 through direct mail and the Sears catalog. Odell served as vice-president and secretary of the newly formed company.
Operating with a staff of 20 employees based at the Sears headquarters in Chicago, Allstate sold 4,217 policies during its first year, bringing in $118,323 in premiums. By the end of 1933, the company was servicing more than 22,000 policies and brought in its first profit of $93,000.
Let Jerry find your price in only 45 seconds
No spam · No long forms · No fees
How Allstate grew into an insurance behemoth
MORE: The Allstate Guy Is Worth a Lot More Than You'd Think
Despite the Depression in the late 1930s, Allstate saw steady growth until a pause during World War II when American manufacturing efforts were diverted to the war effort, leaving little space or money for new automobiles.
Allstate moved away from its direct mail strategy but initially located its agencies in Sears stores, keeping overhead down despite needing to pay the agents' fees.
After World War II, Allstate began a boom cycle that lasted for decades. Through the 1950s, Allstate expanded into other branches of insurance, such as commercial, property, and life. Allstate also expanded beyond the U.S. borders in 1953 when it opened operations in Canada.
The company premiered its "You're in Good Hands with Allstate" in 1950, a slogan that has served as a strong brand for the ensuing seven-plus decades.
Some bumps in the road
MORE: Allstate Recently Acquired This Budget Insurer for $300 Million
Allstate continued to experience growth well into the 1980s, expanding its insurance offerings and dipping into other arenas, such as a mutual fund and research into auto collisions. The company might have pushed too far, too fast, because, by the 1980s, insurance premiums had risen dramatically to support the other ventures.
Consumer backlash over premiums, including court battles in California, eroded the company's revenues in the late 1980s. Then, Hurricane Andrew hit Florida in 1992, causing Allstate to lose $825 million for the year.
These losses sparked an insurance crisis that nearly drove Allstate out of Florida. But subsequent protections for insurance companies again put Allstate on solid footing.
After separating from Sears to allow Sears to focus on its core business, Allstate benefited from a public offering that sold a 20 percent stake in the company and raised $2.4 billion in revenue, a record IPO at that time.
No more mayhem for Allstate at that point as it continued to grow to its current status as the No. 2 insurance company in the United States.
Getting insurance from Allstate and others
Whether you are determined to buy your next auto insurance policy from Allstate or want to consider all the best options,
Jerry
will give you the tools to make the proper decision. In addition to saving you time, Jerry can help you shave upwards of $887 per year off of your insurance bills.
4.7
