The head of Allstate's (ALL) auto insurance unit thinks he made Warren Buffett blink. Bloomberg News reports that Allstate is bragging because Buffett's GEICO -- the third largest auto insurer (behind Allstate) which sells over the Internet and telephone -- has decided it needs to open storefronts to sustain its growth.
I was pleased when GEICO decided to sell auto insurance online. Back in 1995, I pitched the idea of starting up a company that would do just that to a Boston private equity firm. The reason is that about 25 cents of every dollar of insurance premium goes to paying insurance agents. I thought that selling insurance online would cut out a huge portion of that cost, thus leaving room to reduce prices to gain market share.