The layoffs at Allstate Corp. have been a blow to the company and its employees. The company is re-evaluating its business model and is attempting to reinvent itself based on the GEICO model. The new strategy favors direct channels and independent agents. It also plans to drop the Esurance brand.
Allstate plans to eliminate Esurance as a brand
Allstate is planning to phase out the Esurance brand over the next several years. Customers who previously bought property liability policies through the Esurance brand will have to purchase them directly from Allstate from then on. The insurance company purchased the San Francisco-based Esurance company for $1 billion in cash in 2011.
The insurer's "Transformative Growth Plan" includes reducing expenses, focusing on marketing under the Allstate brand, and integrating Esurance's auto, liability, and product protection plans into its core business. Allstate will also invest in centralized customer service, which will streamline processes and increase consistency.
Allstate's new business model favours independent and direct channels
The recent layoff of Allstate franchisees and other employees is part of a larger strategic plan to focus on the independent and direct channels, while minimizing the company's costs. This shift is consistent with the recent shift of Nationwide from a captive carrier to an independent one, and is the next step in a transformation of the insurance brokerage industry.
The changes in the business model are expected to help consumers find the right insurance product at the right price. Initially, customers will be able to access property-liability products through agencies, call centers, and online channels. In 2020, they will be free to choose the method of interaction that best meets their needs. The end goal is to provide a "circle of protection" for Allstate customers. Ultimately, this will help drive down insurance costs and increase customer satisfaction.
Impact on captive agents
The layoff of captive agents by Allstate has resulted in the reduction of thousands of jobs. In addition, the company is reshaping its commission structure to make agents earn more. This plan is a long-term one and will take many years to complete. First, the company will need to reduce expenses before implementing new marketing tactics. The company will also need to redesign its property and liability products and invest in new technology to enhance product management and customer experience. It will also be important to provide a variety of ways to purchase Allstate's signature products.
This decision will negatively impact many captive agents. In fact, many of the agents affected by the Allstate layoff will no longer be able to earn a living by selling Allstate policies. The layoffs are not related to the recent pandemic or economic turmoil, but to the company's shift to a more direct selling model. The company plans to reduce costs through leveraging its direct distribution expertise and strengthening its customer value proposition.
Impact on third-quarter earnings
Allstate has been laying off employees for several months. These layoffs are part of the company's new Transformative Growth Plan, which calls for expanding access to its customers, improving its customer value proposition, and investing in technology. This restructuring plan will reduce costs and increase the company's market share. In addition, the company plans to integrate its subsidiary, Esurance, into the Allstate brand.
Employee agents who were laid off by Allstate may be eligible for rehiring under a moratorium. These new job opportunities do not require a prior satisfactory employment record, making them eligible for reemployment. Non-agent employees who were laid off during a reduction-in-force were also eligible to rejoin the company immediately.
Allstate plans to eliminate Esurance as a brand
Allstate is planning to phase out the Esurance brand over the next several years. Customers who previously bought property liability policies through the Esurance brand will have to purchase them directly from Allstate from then on. The insurance company purchased the San Francisco-based Esurance company for $1 billion in cash in 2011.
The insurer's "Transformative Growth Plan" includes reducing expenses, focusing on marketing under the Allstate brand, and integrating Esurance's auto, liability, and product protection plans into its core business. Allstate will also invest in centralized customer service, which will streamline processes and increase consistency.
Allstate's new business model favours independent and direct channels
The recent layoff of Allstate franchisees and other employees is part of a larger strategic plan to focus on the independent and direct channels, while minimizing the company's costs. This shift is consistent with the recent shift of Nationwide from a captive carrier to an independent one, and is the next step in a transformation of the insurance brokerage industry.
The changes in the business model are expected to help consumers find the right insurance product at the right price. Initially, customers will be able to access property-liability products through agencies, call centers, and online channels. In 2020, they will be free to choose the method of interaction that best meets their needs. The end goal is to provide a "circle of protection" for Allstate customers. Ultimately, this will help drive down insurance costs and increase customer satisfaction.
Impact on captive agents
The layoff of captive agents by Allstate has resulted in the reduction of thousands of jobs. In addition, the company is reshaping its commission structure to make agents earn more. This plan is a long-term one and will take many years to complete. First, the company will need to reduce expenses before implementing new marketing tactics. The company will also need to redesign its property and liability products and invest in new technology to enhance product management and customer experience. It will also be important to provide a variety of ways to purchase Allstate's signature products.
This decision will negatively impact many captive agents. In fact, many of the agents affected by the Allstate layoff will no longer be able to earn a living by selling Allstate policies. The layoffs are not related to the recent pandemic or economic turmoil, but to the company's shift to a more direct selling model. The company plans to reduce costs through leveraging its direct distribution expertise and strengthening its customer value proposition.
Impact on third-quarter earnings
Allstate has been laying off employees for several months. These layoffs are part of the company's new Transformative Growth Plan, which calls for expanding access to its customers, improving its customer value proposition, and investing in technology. This restructuring plan will reduce costs and increase the company's market share. In addition, the company plans to integrate its subsidiary, Esurance, into the Allstate brand.
Employee agents who were laid off by Allstate may be eligible for rehiring under a moratorium. These new job opportunities do not require a prior satisfactory employment record, making them eligible for reemployment. Non-agent employees who were laid off during a reduction-in-force were also eligible to rejoin the company immediately.
