Esurance was incorporated in June 1998 as Silicon Sierra, Inc. The company was cofounded by Jean-Bernard Duler, Jeffrey Goodman, Huyen Bui, David Griffin, and Charles Wallace. Its first round of $5.5 million in venture funding was led by Trinity Ventures and Palo Alto Ventures in May 1999 with a second round of funding of $34 million in October 1999 led by Redpoint Ventures and Global Retail Ventures.
Esurance launched its website and started writing personal auto insurance in four states in December 1999, and was one of the early pioneers of online auto insurance. The company website was also one of the first to offer comparison quotes that allowed consumers to compare prices with other leading insurance companies.
In 2000 Esurance was acquired by Folksamerica Holding Company, Inc. (a subsidiary of White Mountains Insurance Group).
In 2004, Esurance was one of the first car insurance companies to offer discounts to same-sex partners. The company continues to support LGBT issues through a variety of corporate sponsorships and events, such as the Trevor Project. The company has also sponsored a number of sporting events and teams, including the US Open tennis tournament, the Golden State Warriors, and the Pac-12 Conference. Esurance also partners with auto glass claims service provider HSG on a “Save a Windshield, Plant a Tree” program that pledges to plant a tree for every Esurance customer who chooses to have their windshield repaired instead of replaced.
In May, 2011, Allstate announced that it had reached a definitive agreement with White Mountains Insurance Group to purchase Esurance and Answer Financial for approximately $1 billion. Allstate’s acquisition of Esurance was completed on October 7, 2011. The company’s headquarters will remain in San Francisco, CA.
In November 2013, Esurance pioneered online homeowners insurance purchasing by offering their own product in Wisconsin. “Today, only 2 to 3 percent of U.S. homeowners insurance is purchased online,” said Esurance President and CEO Gary Tolman in a press release. “Much like the way Esurance pioneered car insurance online, making it quick and easy to quote and buy, we’ll change how consumers shop for and buy homeowners insurance.” Esurance’s online tool automatically works with property specialists to estimate reconstruction costs related to an individual home’s characteristics as well as the current cost of labor and materials in the homeowner’s neighborhood. Coverage includes the standard homeowners policies of structure protection, personal property protection, family liability protection, water backup coverage and additional living expenses, along with customizable options such as “eco” upgrades to Energy Star rated appliances and electronic data loss recovery. The program offers 12 types of premium discounts for those who provide their own appraisal/inspection report, or for customers who bundle their auto and homeowners policies. According to Steve Lekas, Esurance’s director of Homeowner Product and Actuarial Management, a lack of consistency between carriers catering to a variety of customer needs made it impossible to define homeowners risk efficiently enough without an agent’s help. However, “Consumers are becoming more and more familiar and comfortable shopping and buying online, and it is becoming something that people expect,” Lekas told PC360. “With these changes, the next step is for an insurance company, who really understands how to best help consumers shop and buy insurance online, to build that capability.” Esurance underwrites its own homeowners policies, as it does with auto insurance—the insurer chose to debut the program in Wisconsin because the state domiciles one of its underwriting companies, says Lenkas.
The Early Years: 1919 to 1945
AIG traces its roots back to 1919, when American Cornelius Vander Starr (1892-1968) established a general insurance agency, American Asiatic Underwriters (AAU), in Shanghai, China. Business grew rapidly, and two years later, Starr formed a life insurance operation. By the late 1920s, AAU had branches throughout China and Southeast Asia, including the Philippines, Indonesia, and Malaysia. In 1926, Mr. Starr opened his first office in the United States, American International Underwriters Corporation (AIU). He also focused on opportunities in Latin America and, in the late 1930s, AIU entered Havana, Cuba. The steady growth of the Latin American agencies proved significant as it would offset the decline in business from Asia due to the impending World War II. In 1939, Mr. Starr moved his headquarters from Shanghai, China, to New York City.
International and Domestic Expansion: 1946 to 1959
After World War II, American International Underwriters (AIU) entered Japan and Germany, to provide insurance for American military personnel. Throughout the late 1940s and early 1950s, AIU continued to expand in Europe, with offices opening in France, Italy, and the United Kingdom. In 1952, Mr. Starr began to focus on the American market by acquiring Globe & Rutgers Fire Insurance Company and its subsidiary, American Home Fire Assurance Company. By the end of the decade, C.V. Starr’s general and life insurance organization included an extensive network of agents and offices in over 75 countries.
Reorganization and Specialization: 1960 to 1979
In 1960, C.V. Starr hired Maurice R. Greenberg to develop an international accident and health business. Two years later, Mr.Greenberg reorganized one of C.V. Starr’s U.S. holdings into a successful multiple line carrier. Greenberg focused on selling insurance through independent brokers rather than agents to eliminate agent salaries. Using brokers, AIU could price insurance according to its potential return even if it suffered decreased sales of certain products for great lengths of time with very little extra expense. In 1967, American International Group, Inc. (AIG) was incorporated as a unifying umbrella organization for most of C.V. Starr’s general and life insurance businesses. In 1968, Starr named Greenberg his successor. The company went public in 1969.
The 1970s presented many challenges for AIG as operations in the Middle East and Southeast Asia were curtailed or ceased altogether due to the changing political landscape. However, AIG continued to expand its markets by introducing specialized energy, transportation, and shipping products to serve the needs of niche industries. By 1979, with a growing workforce and a worldwide network of offices, AIG offered clients superior technical and risk management skills in an increasingly competitive marketplace.
New Opportunities and Directions: 1980 to 1999
During the 1980s, AIG continued expanding its market distribution and worldwide network by offering a wide range of specialized products, including pollution liability and political risk. In 1984, AIG listed its shares on the New York Stock Exchange (NYSE). Throughout the 1990s, AIG developed new sources of income through diverse investments, including the acquisition of International Lease Finance Corporation (ILFC), a provider of leased aircraft to the airline industry. In 1992, AIG received the first foreign insurance license granted in over 40 years by the Chinese government. Within the U.S., AIG acquired Sun America Inc. a retirement savings company, in 1999.