In its continuing quest to probe the profit potential of retail insurance marketing, Wal-Mart has launched a pilot program that will give Illinois customers the opportunity to purchase discount auto insurance with a little help from America's leading retailer.
Late last month, Wal-Mart cleared room at some 150 stores in the Prairie State for unmanned kiosks where customers can pick up a savings card with a special code that may entitle them to a discount on a new auto insurance policy sold through Esurance. Esurance parent company Allstate, which acquired the online insurance portal in 2011, is not taking part in the promotion, however.
While interested Wal-Mart shoppers can cash in on the offer via a toll-free phone call, text message or online application, they won't be able to purchase an actual policy at checkout. No end date has been set for the pilot.
Wal-Mart's other dabblings with insurance
The move is not exactly Wal-Mart's first flirtation with selling insurance.
Last fall, some 200 Wal-Mart stores in Georgia and South Carolina began stocking one-year prepaid MetLife life insurance policies, packaged in eye-catching kid-friendly Snoopy boxes right next to the Cheerios and Fritos, as part of a one-year pilot.
Then, this January, the retail giant moved to expand on the health insurance it already sells through its Sam's Club warehouse outlets by establishing a health insurance exchange for small businesses, similar to the state exchanges set to open next year under health care reform.
Skeptics weigh in
Wal-Mart's foray into auto insurance has been met with skepticism by readers of Insurance Journal. One called the discount "unfairly discriminatory," another said it was "counterintuitive and ought to be challenged through (state departments of insurance)" and a third questioned whether it was Wal-Mart's attempt to help "insure some of the many vehicles that are involved in accidents while trying to get out of their overcrowded parking lots."
Which actually gets to the key point here, which is that Wal-Mart offers what all insurers desperately seek these days: traffic. Lots and lots of traffic.
It's unlikely we'll ever see the costly, complex stuff like long-term care insurance pop up on Wal-Mart shelves. But if the retail giant can figure out a way to right-price a product such as auto insurance, which everyone needs, don't be surprised to find policies for sale at a store near you.
Would you buy auto insurance from Wal-Mart?
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Jay MacDonald is a Bankrate contributing editor and co-author of "Future Millionaires' Guidebook," an e-book by Bankrate editors and reporters.