The Allstate Corporation (ALL - Free Report) has completed the acquisition of InfoArmor, Inc., a leading provider of employee identity protection.
InfoArmor valued at $525 million, in an all cash deal, is a perfect fit for Allstate’s portfolio, given its wide offering of industry-leading identity and cyber intelligence services that help clients fight emerging fraud and advanced cyber threats.
Identity theft protection is the fastest-growing voluntary employee benefit, as more and more employers are including the same in their employee benefit plans due to persistent increase in identity theft. According to Forbes, providing identity protection is one of the best ways to attract and retain top talent. Employees are well aware of the threats associated with losing their identities, and unlike some other benefits, the service is easy to understand.
Identity protection can reduce employers’ liability in the event of a data breach. In excess of 16 million victims of identity fraud was reported in the past year, which resulted in more than $16 billion of losses.
This acquisition will accrue to earnings of the company’s Allstate Benefits unit, which serves more than 4 million employees. This deal will add another innovative high-growth business to further expand Allstate’s portfolio of protection products and services. Allstate Benefits is a growing unit of the company and has showcased an increase in premium in the first half of 2018.
Allstate’s strong financial position also allows it to make acquisitions. Its free cash flow has been increasing over the years. Allstate, however, is not very active on the acquisition front. It has a tendency of purchasing companies to branch out into new businesses.
For instance, in 2016, Allstate purchased Square Trade to enter the market of selling warranties for electronic products and distributing protection plans.
The stock has gained 6.8% in a year's time, underperforming the industry's growth of 14.3%.
Allstate carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the property and casualty industry are Hallmark Financial Services, Inc. (HALL - Free Report) , Markel Corp. (MKL - Free Report) and RenaissanceRe Holdings Ltd. (RNR - Free Report) . Each of these stocks carries a Zacks Rank #1 (Strong Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Hallmark Financial Services beat earnings estimates in the second quarter by 23.8%. Earnings for the third quarter are expected to be up by 322%.
RenaissanceRe Holdings beat estimates in three of the four reported quarters, with an average positive surprise of 31.2%.
Markel beat estimates in two of the four reported quarters, with an average positive surprise of 34.7%.
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