Allstate is looking to improve its home and auto insurance units by 2013. Executives at the massive insurance company spoke with investors the other day regarding the matter, saying that focusing on these units will help them recover from losses earlier this year.
Allstate’s auto insurance unit has been hemorrhaging clients for three consecutive years, a trend that executives expect to continue throughout 2011, only to see modest growth again in 2013. The renewed focus on these units comes after Allstate’s CEO, Tom Wilson, reported “inadequate returns.”
As far as home insurance goes, the company is set to raise rates on existing policies while tightening their underwriting standards in an attempt to veer away from high-risk properties. With hurricane season here, the company is looking to curtail any losses that it may accrue during an abnormally turbulent season.
Allstate also eliminated some of the smaller auto insurance companies that sold their coverage, instead putting their support behind much larger agencies. The company will rework their compensation policy in order to encourage agents to seek out more profitable customers. Furthermore, Allstate is expected to lose customers in both New York and Florida as the company pulls auto coverage from these areas due to what they call “rampant fraud.”
The companies life insurance unit is expected to return on equity of 10% by 2014, which will end up generating $1 billion of excess capital over the course of four years.
