Allstate beginning to make changes to business plan
Allstate, one of the largest insurance companies in the U.S., is looking to get back into the homeowners insurance business. CEO Tom Wilson has announced that the company is working to improve customer loyalty after consolidating several independent agencies, acquiring smaller insurance providers, and a rate increase spree. Part of this effort is to begin expanding its flagging homeowners insurance business, which has shrunk by more than 1 million policies over the last four years.
Wilson notes that Allstate has embarked on a path that is likely to yield high returns to shareholders while also providing better services to policyholders. According to Wilson, the company has reached a point where it can stop shrinking and focus again on expansion. Over the past several years, Allstate has been purchasing reinsurance, raising rates, and limiting sales in areas that are considered high risk, such as coastal regions of the country. These various activities have helped fortify the company’s position in the insurance sector and have prepared Allstate to seek new ways to expand.
Analysts praise insurer’s response to Sandy
Some industry analysts suggests that the way Allstate responded to Hurricane Sandy has won it a favorable place with its policyholders. The company experienced more than 78,000 claims come from the natural disaster, many of which were processed and finalized in a quick and efficient manner. The storm, as well as other natural disasters in October, cost the company some $1.08 billion, but it has not been enough to cripple Allstate in any conceivable way.
Allstate to continue fortifying position
Allstate is eager to return to the homeowners insurance business in a new way. The company still provides policies for properties, but these policies can only be found in areas that are not prone to risks concerning floods and wind damage. The company is looking to begin providing homeowners insurance coverage for properties in coastal areas in the future, after it has set up additional protections from major natural disasters, such as hurricanes.
