Ya gotta hand it to Allstate: The "good hands" company has managed to work its way towards the top of the property/casualty insurance pile. Serving more than 16 million households, the company is the second-largest personal lines insurer in the US, just behind rival State Farm. Its Allstate Protection segment sells auto, homeowners, and other property/casualty insurance products in Canada and the US. Allstate Life provides life insurance through subsidiaries including Allstate Life and American Heritage Life. The group also provides voluntary benefits such as short-term disability and critical illness policies. Other units include Allstate Roadside Services and consumer protection plan provider SquareTrade.
Allstate operates through seven segments: Allstate Protection, Service Businesses, Allstate Life, Allstate Benefits, Allstate Annuities, Discontinued Lines and Coverages, and Corporate and Other.
The Allstate Protection segment's property and liability businesses -- which cover about 16 million households -- account for more than 90% of Allstate's total premiums. Most of the segment's sales come from traditional auto and homeowners policies. In addition to traditional policies, Allstate sells specialty products including coverage for motorcycle and boat owners, renters and landlords, and mobile home dwellers.
The segment includes subsidiaries
The Service Businesses segment includes consumer protection plan provider SquareTrade, telematics unit Arity, Allstate Roadside Services, and Allstate Dealer Services.
In late 2017, the company restructured its former Allstate Financial segment into three separate segments. Allstate Life offers traditional, interest-sensitive, and variable life insurance products. Allstate Benefits provides voluntary benefits policies such as life, accident, short-term disability, and critical illness policies. Allstate Annuities comprises the run-off annuity business, which the company exited in 2014. While these segments account for approximately 10% of the company's total revenue, Allstate primarily considers them to be useful for deepening relationships with Allstate Protection customers.
The Discontinued Lines and Coverages segment includes results from coverage Allstate no longer writes and run-off businesses.
Allstate's largest property/casualty markets are California, Florida, New York, and Texas. The company operates throughout the US and in Puerto Rico, the US Virgin Islands, Guam, and Canada. It has some 500 administrative, claims handling, data processing, and other facilities in North America. It also leases properties in Northern Ireland (three), India (two), and London (two).
Sales and Marketing
Allstate maintains a network of about 10,400 exclusive agencies which sell its Allstate-branded insurance products through approximately 24,000 licensed sales professionals. It also offers these products, and Encompass-branded products, through some 2,500 independent agencies that are primarily located in rural areas of the US.
Allstate Financial products are sold through exclusive agencies (and approximately 100 exclusive specialists) and 6,000 workplace enrolling independent agents. Other products are sold through financial representatives, online, and over the phone.
In 2017 Allstate spend $8.3 million on advertising, versus $11.2 million in 2016.
Allstate's revenue has grown steadily over the past five years; it rose 5% to $38.5 billion in 2017. This gain was largely driven by a 3%, or $1 billion, increase in property and liability insurance premiums. The acquisition of consumer protection plan firm SquareTrade further helped overall revenue. Additionally, the company saw net realized capital gains in 2017, versus net realized capital losses the prior year. These gains were partially offset by higher catastrophe losses related to hurricanes, wildfires, and wind and hail storms.
The higher revenue boosted net income (which had fallen in 2015 and 2016) by 70% to $3.2 billion. A benefit related to 2017 tax legislation also lifted its bottom line. However, net income was negatively impacted by a $59 million net loss in the Service Businesses segment as the company invested in its various units.
Operating cash flow also rose, increasing 8% to $4.3 billion.
Allstate is focused on growing its number of insurance policies in force, increasing premiums, maintaining profitability in the auto segment, and increasing returns in the homeowners and annuity segments. It is also focused on proactively managing its investments, modernizing its operating model, and building long-term growth platforms. To grow policy sales, the company is enhancing its independent agency network (especially in targeted geographic areas), sales support organization, and online sales platforms. It is also working to increase cross-sales of voluntary benefit products through its exclusive agents, as well as to form new strategic alliances and develop new product offerings. For example, the company has recently launched protection for home-sharing hosts and for Uber rideshare drivers. Allstate Canada introduced products to protect homeowners from sewer backups and water damage in 2018. Subsidiary Esurance is expanding, both by adding new complementary products and by launching its products in new geographical locations. At the same time, Allstate is working to reduce its operational costs.
The company is continuing to invest in automotive telematics, or wireless device technologies that track drivers' habits, through which it can provide more accurate policy pricing.
Catastrophe management is also a key part of the company's stability. To limit its exposure to catastrophic claims in the face of increasing severe weather events in recent years, Allstate has quit writing new homeowners policies in some coastal areas, including California and Florida, that are vulnerable to hurricane, wind storms, and earthquakes. In 2016 the company began writing a limited number of homeowner policies in certain areas of California. And, while it still renews existing homeowners policies in California, the company tweaked its underwriting to reduce exposure to claims for fires following earthquakes. Unfortunately, 2017 had several major events, including hurricanes, severe storms, and wildfires, which caused the company more than $3 billion in catastrophe losses.
Mergers and Acquisitions
In 2018 Allstate bought Arizona-based InfoArmor, which provides employee identity protection, for $525 million. The acquisition added to Allstate Benefits' voluntary identity protection offerings.
In early 2017 Allstate acquired rapidly growing consumer protection plan provider SquareTrade, which specializes in extended warranties for electronics devices. The $1.4 billion deal expanded Allstate's consumer-focused offerings, adding some 25 million protection plans.
2775 SANDERS RD
Northbrook, IL 60062-6110
Phone: 1 (847) 402-5000
Employer Type: Publicly Owned
Stock Symbol: ALL
Stock Exchange: , NYSE
EVP and CFO, The Allstate Corporation and Allstate Insurance Company: Mario Rizzo
Vice Chairman, The Allstate Corporation and Allstate Insurance Company: Steven E. Shebik
Chairman, President and CEO, The Allstate Corporation and Allstate Insurance Company: Thomas J. Wilson
Employees (This Location): 12,000
Employees (All Locations): 45,700
Diamond Bar, CA
Los Angeles, CA
Rancho Cordova, CA
San Francisco, CA
Stevenson Ranch, CA
Lone Tree, CO
Boynton Beach, FL
Plant City, FL
Pompano Beach, FL
Buffalo Grove, IL
South Bend, IN
Grand Blanc, MI
Fort Lee, NJ
North Brunswick, NJ
Whitehouse Station, NJ
Las Cruces, NM
East Islip, NY
New York, NY
Oklahoma City, OK
Sioux Falls, SD
Oak Ridge, TN
Brigham City, UT
Virginia Beach, VA
Côte Saint-Luc, Canada
Niagara Falls, Canada
North Bay, Canada
North York, Canada
Red Deer, Canada
Richmond Hill, Canada
Sault Ste. Marie, Canada
St. Albert, Canada
St Catharines, Canada
Thunder Bay, Canada
Val Caron, Canada
Strabane, Northern Ireland