Sentry Purchases Nonstandard Auto Insurer The General for $1.7B
Sentry Insurance Gains Ground in Nonstandard Auto Insurance Market
Sentry Insurance, a mutual insurance company headquartered in Stevens Point, Wisconsin, has acquired The General, a nonstandard auto insurer, from American Family Insurance for $1.7 billion in cash.
The acquisition, which closed on January 1, 2023, will make Sentry the second-largest nonstandard auto insurer in the United States.
Nonstandard auto insurance is designed for drivers who have difficulty obtaining coverage from traditional insurers due to factors such as poor credit, a history of accidents, or a suspended license.
Expansion into New Markets and Product Lines
The acquisition of The General will allow Sentry to expand into new markets and product lines. The General has a strong presence in the Southeast and Southwest, regions where Sentry has a limited presence.
In addition, The General offers a variety of nonstandard auto insurance products, such as classic car insurance, motorcycle insurance, and RV insurance. These products will complement Sentry's existing product portfolio.
Increased Scale and Efficiency
The acquisition will also increase Sentry's scale and efficiency. The General has a network of over 4,000 agents and a large customer base. This will give Sentry access to a wider distribution network and a larger pool of policyholders.
In addition, The General has a number of innovative technology solutions that Sentry can leverage to improve its own operations.
Positive Reaction from Analysts
Analysts have reacted positively to the acquisition. They believe that it will strengthen Sentry's position in the nonstandard auto insurance market and provide the company with a number of growth opportunities.
Keefe, Bruyette & Woods analyst Meyer Shields said in a research note that the acquisition "makes strategic sense for Sentry" and will "enhance its scale and capabilities in nonstandard auto."
Conclusion
The acquisition of The General is a major move for Sentry Insurance. It will make the company the second-largest nonstandard auto insurer in the United States and give it access to new markets, product lines, and customers.
The acquisition is also expected to increase Sentry's scale and efficiency. Analysts believe that it will strengthen Sentry's position in the nonstandard auto insurance market and provide the company with a number of growth opportunities.
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