NEW YORK (AP) — Home and auto insurer Allstate is buyingEsurance and Answer Financial from White Mountains Insurance forabout $1 billion.

Allstate Corp. says the deal will help it tap consumers whoprefer certain brands along with consumers who want choices amonginsurance carriers.

White Mountains Insurance Group Ltd., based in Hanover, N.H.,says the sale will increase its book value by $80 per share.

Esurance sells auto insurance directly to customers online andthrough call centers. Answer Financial is an independent personalinsurance agency.

Allstate, based in Northbrook, Ill., has agreed to pay $700million plus the tangible net value of businesses being acquired.It estimates the total price would be about $1 billion.

StephenApplebaum, a senior P&C industry analyst for AiteGroup, commented on what the move means for Allstate.

“This is a significant acquisition for Allstate, not in terms ofany immediate market share growth, but because it will—intime—enhance Allstate's ability to support multiple distribution channels and offer an independent auto quoteservice to better compete with Progressive and GEICO,” saysApplebaum. ”It should also improve their level of overallinnovation through the use of emerging technologies in directonline sales and in claims, and allow them to increase market sharein auto, property and life insurance with the important, younger'millennial' demographic,” he continues.

“Allstate has been gradually losing auto insurance market shareover the past few years and now holds about a 10.5 percentshare of the auto insurance market, with about 12 millionpolicyholders and 18 million vehicles. Esurance holds under a 0.2percent share,” says Applebaum.

White Mountains shares rose $40.31, or 11.7 percent, to $383.94in morning trading Wednesday. Allstate shares slipped 11 cents to$32.31.

According to HighlineData, White Mountains is the 24th largest insurer of personalauto lines, with 2010 direct premiums written of $986.6 million.Allstate is the second largest personal auto lines insurer in thecountry, with 2010 direct written premiums of $17.0 billion.