Allstate adjusting to acquisition of Esurance [Chicago Tribune]
|By Becky Yerak, Chicago Tribune|
|McClatchy-Tribune Information Services|
"I'm tech-savvy, and I'm into the self-service model, so I really like that
In the past three years, the percentage of consumers relying solely on online channels to obtain quotes has risen by more than 50 percent, to 23 percent,
At the same time, shopping auto insurance nationally has fallen to its lowest point in five years; only 25 percent of policyholders looked for a new insurer in the past year. That's down 8 percentage points from 2011,
And at least one analyst questions whether
The goal with Encompass was to cater to insurance shoppers who wouldn't use Allstate agents exclusively because they didn't want to rely on just one company's product line. Premiums generated by Allstate through its independent agents' channel have fallen from a peak of
"Given Allstate's checkered history with Encompass, we're unconvinced that it can successfully manage growth and profitability at
Customers who patronize Allstate's namesake agencies like local hands-on assistance as well as "bundled" products, such as auto and home coverage.
Besides the fact that
Such engagement efforts are appreciated by people like
"They've done such a good job listening to me on their social networks that I am genuinely excited about receiving this same kind of attention once I become a customer," said Brown, 24. "
In its earnings call in May, Allstate said
"We are just as happy as the day we made the announcement, if not more at this point,"
Allstate launched an advertising campaign in December for
"We wanted to get some weight behind it," Civgin told analysts. "I'm happy to say it's working as well as we expected." Industrywide, advertising spending rose by 12 percent in 2011, to
Allstate said it's considering launching new
Although Allstate has seen the number of policies on its books shrink along with its market share, it remains among the industry's more profitable players.
"Growth without profitability destroys shareholder value, and we are about building shareholder value,"
Among the 10 biggest auto insurers, Allstate was the fourth-most profitable in 2011, according to data tracker SNL Financial. It had a "combined ratio" of 97.8 percent.
In general, the combined ratio is a measurement of underwriting losses and expenses as a percentage of premiums coming in; 100 percent represents break even.
"If a company has a combined ratio greater than 100 percent, then they have more money going out than coming in, and they are losing money on their underwriting," SNL senior industry analyst
Six of the 10 biggest car insurers had combined ratios exceeding 100 percent.
In the first quarter, the combined ratio of the Allstate brand was 95.2 percent; it was 127.6 percent for
Allstate says integration of
"An obvious one is claims,"
At least one consumer who recently went through
She said her initial contact with
"There was little wait time to speak to a customer service representative, and the man I dealt with was friendly," Pursel said. She quickly received an email on
That's when the situation deteriorated.
"She was rude and short with me and, before I could even ask any questions, rushed off of the phone," Pursel recalled.
She received the check
"Luckily, the body shop that wrote the estimate has been wonderful to work with and was able to explain to me why the check was cut for a lesser amount," Pursel said. "At this point, my car is scheduled to go in next week for repairs, all of which are covered by the check
Besides changes to
Allstate is known for not being afraid to raise rates to maintain its profit margins, but Chief Executive
He didn't shop around much for insurance during the seven years he was with Allstate because he once was burned by a cut-rate insurer. In April, however, the Bogans dropped collision coverage on their Allstate policy and noticed "considerable" savings.
"Initially when we had full coverage on both cars from Allstate, it was about
Concerned that there had been an error, he called his Allstate agent's office and learned there had been a statewide rate increase.
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