The allstate layoffs aren't over yet. The company plans to reduce costs and close down a number of locations. This includes closing offices, consolidating all insurance brands into one business model, and paying $290 million in severance. The article also details what Allstate plans to do to make this happen. But before we get too excited, let's review what we know. Read on for more details.
Allstate plans to cut costs
In an attempt to improve its bottom line, Allstate is preparing for a 'price war' with state-owned rival State Farm, which is reducing insurance rates across the US by an average of 11%. The company expects the reduction to be even more dramatic in Illinois, where rates are expected to fall by 14% next month. Earlier this year, Allstate Canada announced a joint venture with Pembridge Insurance Company and Pafco Insurance Company to launch a Stay-at-home payment of $30 million.
Allstate said it will eliminate 3,800 positions, primarily in sales and claims. Other cuts will occur in service and support functions. The company said the cuts would result in a $290 million restructuring charge, most of which will be recognized during the current quarter. The reductions will affect about 8% of the company's roughly 46,000 employees. Some of the employees who are being laid off will receive extended medical coverage and help with job searches.
Allstate said it will eliminate 3,800 positions, primarily in sales and claims. Other cuts will occur in service and support functions. The company said the cuts would result in a $290 million restructuring charge, most of which will be recognized during the current quarter. The reductions will affect about 8% of the company's roughly 46,000 employees. Some of the employees who are being laid off will receive extended medical coverage and help with job searches.
It will eliminate Esurance
In a news release, Allstate Corporation announced plans to phase out its Esurance brand in 2020. Executives are framing the changes as a way to improve customer access and reduce costs, while improving the company's overall offerings. Allstate also plans to expand its centralized customer service capabilities, which will increase efficiency and consistency while cutting costs. As a result, Allstate agents will have more time to focus on growth.
Before Allstate purchased Esurance in 2011, it had several direct-to-consumer online insurance options. But in recent years, the company's margins have improved. Esurance reported a combined ratio of 101.1 in the third quarter of 2019 and 100.2 for the first nine months of 2018. In response, Allstate said it will eventually stop selling its products under the Esurance brand. The company would not give a specific timeline for when it will phase out the Esurance brand, but it has said it will continue to issue new policies until 2020.
Before Allstate purchased Esurance in 2011, it had several direct-to-consumer online insurance options. But in recent years, the company's margins have improved. Esurance reported a combined ratio of 101.1 in the third quarter of 2019 and 100.2 for the first nine months of 2018. In response, Allstate said it will eventually stop selling its products under the Esurance brand. The company would not give a specific timeline for when it will phase out the Esurance brand, but it has said it will continue to issue new policies until 2020.
It will consolidate all insurance brands into one business model
As part of its restructuring plan, Allstate plans to combine its home and auto insurance brands with its life and personal liability products. These products will be offered through call centers, agencies, and the company's online portal. Starting in 2020, consumers will be able to choose their preferred interaction method without restriction. The merger will also result in reduced costs and support more competitive pricing, lowering the overall insurance cost for consumers.
The company is also planning to acquire SafeAuto, a provider of state-minimum car insurance. In a deal worth more than $300 million, the company will pay $270 million in cash and receive $30 million in pre-close dividends. The company will integrate SafeAuto's operations into its existing non-standard auto insurance business. SafeAuto was founded 27 years ago by Ari Deshe and Jon Diamond. In 2018, the company reported earned premiums of $378 million and a 95.3 combined operating ratio.
The company is also planning to acquire SafeAuto, a provider of state-minimum car insurance. In a deal worth more than $300 million, the company will pay $270 million in cash and receive $30 million in pre-close dividends. The company will integrate SafeAuto's operations into its existing non-standard auto insurance business. SafeAuto was founded 27 years ago by Ari Deshe and Jon Diamond. In 2018, the company reported earned premiums of $378 million and a 95.3 combined operating ratio.
It will pay $290 million in severance
Allstate's upcoming restructuring charge of around $290 million is expected to come primarily from severance costs and extended benefits to affected employees. Additional charges related to the closing of some offices are also expected to reduce net income. The charges are expected to impact earnings in 2020 and 2022, with the largest portion occurring during the third quarter. Restructuring charges will affect Allstate's earnings in 2020 and 2022 and will be primarily reflected in the company's fourth-quarter and first-half of 2022.
As part of its restructuring, Allstate will cut more than 3,800 jobs, or nearly 8% of its workforce. The company expects to recognize a pre-tax charge of $290 million this year, with $210 million to $200 million of that amount recognized in the third quarter. The company also plans to flag approximately $80 million in real estate exit costs. In total, these charges are expected to affect net income and adjusted net income during the year.
As part of its restructuring, Allstate will cut more than 3,800 jobs, or nearly 8% of its workforce. The company expects to recognize a pre-tax charge of $290 million this year, with $210 million to $200 million of that amount recognized in the third quarter. The company also plans to flag approximately $80 million in real estate exit costs. In total, these charges are expected to affect net income and adjusted net income during the year.
It will expand transition support for impacted employees
After announcing its plans to eliminate 3,800 jobs, Allstate will expand transition support to affected employees. Allstate will provide extended medical coverage, retraining support, and help in job searches. The restructuring plan will affect all areas of the company including claims, sales, and service. The company declined to disclose the number of offices that will close and the total number of layoffs.
In an effort to cut costs, Allstate will eliminate approximately 3,800 jobs. The job cuts will be made in claims, sales, service, and support functions. The company plans to cut costs across the board and change the way it compensates insurance agents through commissions. The restructuring will impact the company's cost structure and will result in a reduction in pay for 3,800 employees.
In an effort to cut costs, Allstate will eliminate approximately 3,800 jobs. The job cuts will be made in claims, sales, service, and support functions. The company plans to cut costs across the board and change the way it compensates insurance agents through commissions. The restructuring will impact the company's cost structure and will result in a reduction in pay for 3,800 employees.
