Modified:2022-09-10  Published:2022-08-24  Views: 252
Author: editor
Published in: Insurance
Everything You Need To Know About ALLSTATE Layoff 2022 And More

The year of 2020 has not been a good one for business. Extended lockdowns had resulted in declining customers and decreased profits for most of the business. The insurance industry has not been anything different. In this scenario Allstate, One of the biggest insurance companies of the US, has laid off 8% of its total employees, which resulted in cutting down almost 3,800 employees in different departments, such as in support, claims and in sales. However, the question is, is the layoff of an impact of pandemic or has it been one of the strategic moves of the company. For finding out the proper answer to this question, we have developed this article by compiling all the necessary data and by analyzing those.

The reason behind Allstate layoff

The invasion of Covid-19 can seem to be the apparent reason of the Allstate layoff, however, the truth may not necessarily be the same. According to the big media hubs, the layoff is rather strategical planning, that has taken place to ensure a better profitability of the company.

Allstate used to be a captive carrier and took a huge step towards changing its approach to be a direct-to-customer focused company. This is certainly caused a huge impact on the agents and employees of the company. It needs to be stated that captive agencies are mostly successful in the rural areas of the US and there are almost none of the Allstate franchise are listed for sale. Most of the Allstate listings are limited to the urban areas like Florida and California. Hence, it is quite natural for the company to run lower on profit than its competitors. In this scenario it was important for the company to make a shift and to increase their chances of gaining more customers.

Allstate office

On another note, the captive agencies usually possess traditionally trained agents and most of the times they are not so much accustomed to technology. In this 21st century knowing the bare minimum technical skills is a requirement for survival. Moreover, the new generation customers are more comfortable with using a technical interface to claim a file than dealing with an agent face to face. And the companies need to change their approach for the customers in order to gain their attention and preferences. Thus, Allstate had to take this bold step for ensuring a good spot in the insurance industry of the US and proceeded with the Allstate layoff.

During the layoff announcement the CEO of Allstate, Tom Wilson pointed out to the paid growth of GEICO and Progressive in the market of auto insurance and established that as one of the major reasons for this firm step.

The impact of the Allstate layoff on the agents

Even though Allstate has refused to give up the captive agency model, it has made the work even harder for the agents. The company has ensured all the way of gaining profits, however, the agents would have to compete with the company itself. It can be a very tough to find customers and to retain them as there are several added benefits provided in the direct-to-customer program. For the company, this move is very beneficial as they would be able to cut a good amount of additional expenses. Moreover, the customers can gain attractive discounts if they are opting for the direct-to-customer program, which makes the entire scenario even tougher for the agents.

Allstate is providing 7% discounts to the customers who join via the direct channel. It is certainly a tough task for the agents to sell the same insurance plan to the customers. Additionally, after the Allstate layoff the company has reduced the commission rate of the agents as well. They now provide 23% less on new commissions and 10% less on renewals. Additionally, the company’s recent activities regarding acquisitions and consolidations makes the fact that they prefer independent and direct channels much more than the traditional approaches. Thus, it can be considered as a clear indication that the layoff is not an impact of the unexpected circumstances rather it was a potential strategic movement.

The impact of Allstate layoff on the customers

As it has been stated before, with the direct-to-customer program the customers are more likely to be benefitted in the area of discounts and prices. As the company is more focused on building itself following the model of GEICO, it has gone for cheaper premiums and fast binding techniques, however, the process of claim is more likely to be difficult. It may appear to be easy while purchasing an insurance. However, as with the Allstate layoff the company has cut down most of the employees in the service and support department the claiming process can turn out to be difficult beyond imagination.

Refunds and employees after the layoff

The announcement of the layoff had raised certain concerns about the employees and the refunds that they need to make to the policy holders. According to the report of US Securities and Exchange Commission, Allstate employed 45,780 as of the end of 2019. And then the company laid off 8%of its workforce, which had 3,800 employees jobless. 1000 employees among those 3800 were tied with the pandemic-related refunds. As the cause of the refund the CEO has put the blame on the less number of car accidents and less claims in the year of 2020. In the month of August 2020, the company had distributed $1 billion to the customers with the help of shelter-in-place payback plan. The company has shown some kindness to its employees that had been laid off and let them stay in the medical plans till the end of 2020. The talent-acquisition department of the company has also been helping the employees in looking for new jobs.

Allstate's profits

Hence, it is quite clear that the Allstate layoff performed by Allstate was not an ill impact of the pandemic rather it was a well-thought planning to enhance the profitability of the company during the post-pandemic situation. All in all it is a clever move by the company, also can be quite beneficial for the customers. However, before purchasing an insurance quote from them, you should know enough about the plans, pricings and the beneficial features that Allstate offers. And you will not have to look for it elsewhere. We have complied the important information regarding the car and home insurance plans of Allstate within this article. Keep reading to know more.

Allstate car insurance review 2022

The position of Allstate in the car insurance industry of the US is well known. The company is preferred for its long history and full-suit insurance policies. The company provides its insurance services in all over the US and includes home insurance, life insurance, renters, motorcycle and off-road insurance. We have prepared a full analysis of the car insurance service provided by the company for helping you in your decision making process.

Advantages to acquire

  • The addition of a classic car insurance and a car insurance service for Mexico makes purchasing Allstate car insurance plans beneficial.
  • An upgraded and helpful roadside assistance plan can assist you in the time of your need. The company is said to be 24/7 available for its roadside assistance plan buyers.
  • The attractive discounts that are provided by the company is another advantage that you can gain in order to lower the costs of your premiums. Moreover, there are 10+ discounts that are available.

Probable Disadvantages to face

  • The company holds a lower customer satisfaction rating, which signifies towards its below average customer service.
  • Allstate only sells car insurance policies that last for six months, whereas, the yearly plans are more acceptable.
  • Customers need to subscribe or buy an assistance package to enjoy the roadside assistance plans.

Car insurance plans

Type of coverage

Per month payable

Yearly payable

Full coverage

$154

$1,850

Minimum coverage

$65

$785

 

Table 1

Allstate is considered to be one of the most expensive car insurance companies of the US. The car insurance plans of Allstate are mostly for six months, however, the company is most likely to pay a discount to the policy holders for signing up for a twelve month policy and for paying the entire upfront in one payment. The yearly rate of the auto insurance for the company is $1,850, which can extend to $2,000. In this case per month payable also increases to $167. However, there are certain factors that influence the amount you pay for your insurance premium. Those factors are discussed below:

Age

If you are a young driver, you are more likely to pay a higher amount than others. The drivers, who are under 25 have to pay a high insurance premium due to the company obligations. Once you are above 25, you will be provided with much considerable amounts to pay.

Credit score

Credit score plays a vital role in determining the auto insurance rates provided by Allstate. The people with a bad credit score are more likely to pay a higher insurance premium, whereas, the people with a good credit score pay less. Paying dues in time and improving credit scores with time will be helpful in reducing the premiums as well.

Car insurance plans

Type of car

If you own a sports car then you will have to pay a higher insurance. The more economical the car is the less you have to pay. The price of the car is proportional to insurance premium.

Driving record

Driving record is another vital factor to determine the insurance premium for Allstate customers. Allstate discounts the customers who do not engage themselves in an at-fault accident and who do not get tickets. All in all the cleaner your driving records are the cheaper you have to pay for the insurance.    

Types of coverage available

The company provides its customers with a standard car insurance coverage, which covers the basic needs, a collision coverage, for accident protection, a comprehensive coverage, for natural occurrences and liability coverages, for any case of property damage and injury. Except all of these there are, medical payment coverage, Uninsured and Underinsured Motorist Coverage and Personal Injury Protection. There are also a number of optional coverage options available for purchase.

Allstate Home insurance review 2022

Allstate is the second largest home insurance company of the US. The company provides an expensive and quality homeowner insurance plan along with a number of opportunities of discounts.

Advantages to acquire

  • The company and its coverage is available all over the nation, hence, if you buy a house in a different location than your original one, it is not an issue.
  • With an extensive supplemental coverage and a lot of add-ons you can easily opt for your ideal homeowners’ insurance plan.

Probable Disadvantages to face

The high price of premium is the only disadvantage associated with the company’s services. Due to the price being too high, it is often hard for the commoners to afford Allstate’s services.

Home insurance plans

The Home insurance plans

Type of coverage

Payable amount (Yearly)

Dwelling

$332,437

Other structures

$33,244

Personal property

$199,462

Loss of use

$33,244

Liability

$300,000

Medical payments to others

$1,000 per person

Deductible

$2,500 for perils

$6,648.74 for tropical cyclone

Monthly Cost

$302

 

Table 2

The monthly average of Allstate, $302, is much more expensive than the nationwide average, which is $101.

Type of standard coverage available  

Type of coverage

Description

Dwelling + other structures

This is capable of covering all the repairing and replacing cost of the interior and exterior of the house along with any other structure that is not attached to the house, such as a fence.

Personal property

Any harm in personal property is covered by this. These personal properties include clothes, jewellery, electronic devices and more.

Personal liability

This is capable of covering attorney fees, court fees, and any damages that has someone injured in the area of your property. You can easily customize this coverage as there are few options available. These usually fall between $100,000 and $1 million.

Loss of use/additional living expenses

This covers the costs of living arrangements if your home is temporarily uninhabitable. Expenses, such as dining and accommodations, are paid by this feature. Coverage for this category is stays within 10%–30% of your dwelling coverage limit.

Medical payments to guests

This covers the medical treatment fees for someone who is injured in your home. The maximum coverage for this type of protection is usually stays between $1,000 and $10,000 per person, depending on your selection.

 

Table 3

Conclusion

The above analysis has been developed for you to help you determine if Allstate car and home insurance policies are a good choice for you or not. As well as a detailed discussion has been provided on Allstate layoff. Hope this article has been helpful for you to finally proceed with your decision.

Resource list:-

For gaining more information on the topic, you can visit the below provided links.

The Allstate Layoff: Warnings, Consequences, and the Future

ALLSTATE LAYOFFS 2022 - Allstate to layoff "thousands" of staff

How Much is Allstate Car Insurance: Cost, Rates & Quote

Allstate Auto Insurance Review

Allstate Home Insurance Review (2022)

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