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Century Auto Insurance Review

21st CenturyThis Century Auto Insurance Review details Delaware-based 21st Century Insurance Group. 21st Century Insurance Group is a large underwriter and distributor of auto insurance products and services. Other companies, such as Century Insurance Group (Oregon) and Century Insurance Consultants (Pennsylvania) are insurance agencies. The best way to get online car insurance quotes for FREE is to enter your ZIP code in our car insurance comparison tool.

You’ll learn about the history of 21st Century Group and the company’s acquisition by ultimate parent Zurich Financial Services in Switzerland.

Century Auto Insurance Overview

21st Century Insurance Group was founded in 1956, and was originally owned by American International Group (AIG). AIG sold the company to Farmers Group, Inc. in 2009 during the global financial downturn. Farmers Group is a wholly-owned subsidiary of Zurich Financial Services AG of Zurich, Switzerland.

AIG recognized the need to sell some of its plum assets in 2008, and renamed its AIGDirect auto insurance brand “21st Century.” Zurich Financial paid $1.9 billion for 21st Century. The purchase of 21st Century (merged immediately with Farmers Group) assisted global insurance giant Zurich Financial Services in opening new markets.

The acquisition of 21st Century enabled Zurich Financial Services to immediately knock on the doors of clients in California and Texas. Farmers Group immediately benefited from the merger. The company’s direct insurance auto insurance sales grew exponentially in 2009. The company posted annual sales of $5.52 billion in fiscal year 2010, according to Dun & Bradstreet. The company employs approximately 2,900 people in all locations. About 1,500 work at the Wilmington, Delaware headquarters. Get the multiple car insurance quotes for FREE and get the best car insurance for your needs by entering your ZIP code above.

Century Auto Insurance History driver education course

The former 20th Century insurance was started by a 20-year insurance sales veteran named Louis Foster. Foster saw how effectively Geico’s business sold auto insurance directly to individual consumers.

Foster raised approximately $270,000 from investors to start the company. He sought educated, employed clients as customers with the goal of reducing potential claims to the new insurance company. Some of his first customers worked at American Telephone & Telegraph (AT&T). Foster believed that consistently employed people were better risks for the firm.

The new company sold more than 2,000 policies in its first operating year. The company’s advertising was primarily word-of-mouth. In 1968, the company offered shares in an Initial Public Offering to enthusiastic investors. The shares traded on NASDAQ.

Century Auto Insurance and California Proposition 103

Foster remained the company’s primary leader through the late 1980s. He was an outspoken protagonist of Proposition 103 in California. Proposition 103 supported reduced auto insurance rates as well as rebates to customers. The ruling determined that any auto insurance company, even one operating to reduce costs like 21st Century, should retain a minimal profit of about 10%. Profits above that level during 1988-89 were to be refunded to insurance customers.

As Foster continued to fight what he considered an unfair ruling, an earthquake (Northridge) hit some of the company’s California clientele. Claims of more than $900 million were presented for payment. Compensating customers for the earthquake cut severely into the company’s reserves. 20th Century welcomed AIG’s offering of a joint-venture with open arms in 1994, allowing the company to pay claims and to return funds to clients (according to Proposition 103).

By 1996, 20th Century entered Arizona and several Western States (Washington, Nevada, and Oregon). When Foster died in 1998, he left a 5% stake in the company to his widow. At that time, AIG entered the open market to scoop up additional shares of the company.

By the turn-of-the-century, 20th Century resumed sales of homeowner policies in addition to its auto insurance sales base. The company decided against selling new earthquake insurance policies. To support client goodwill, the company added reserves for those homeowner clients with prior earthquake damage.

As the new millenium began, the company changed its name to 21st Century Insurance Group. As AIG took greater control of the company, homeowner policy sales ceased. The company vowed to move the bulk of its direct auto insurance sales online. Compare car insurance quotes for FREE by entering your ZIP code in our car insurance comparison tool.

Century Auto Insurance Business Model

Century seeks to remove agents and brokers from its direct sales distribution of auto insurance products and services to individuals and families. Cutting out sales commissions helps customers to save money on auto insurance and personal umbrella policies underwritten by the company.

Customers of an auto insurance company may have the option to purchase insurance directly from the underwriting company or through an agent. 21st Century doesn’t use an external agent sales force to market auto insurance. Individuals and families buy auto insurance direct:

  • Through the company’s website
  • Via direct mail
  • By telephone (advertising, television, and radio)

Because 21st Century writes only preferred-risk auto insurance, the company reduces its potential liabilities. High-risk or non-standard auto insurance buyers have a higher claims submission potential.

Century Auto Insurance Conclusion

We give 21st Century Insurance Group four out of five stars. The company specializes in auto insurance to individuals. In the states where 21st Century writes auto insurance, you’ll find good customer service and follow-up. Unfortunately, 21st Century doesn’t offer auto insurance in every state. To get car insurance for FREE no matter what states you live in, enter your ZIP code in our car insurance comparison tool.

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