Allstate CEO Increases Agency Count for First Time Since 2007
CEO Tom Wilson has turned his focus to expansion after spending years reducing sales to homeowners in states such as New York and Florida.
INN Breaking News, February 21, 2014
(Bloomberg) -- Allstate Corp., the largest publicly traded U.S. home and auto insurer, increased its agency count for the first time since 2007 as the company targeted growth beyond the U.S. East Coast to diversify risk.
The insurer had 11,600 Allstate-exclusive agencies and financial representatives in the U.S. and Canada as of Dec. 31, an increase of 400 from a year earlier. Locations served by exclusive agencies increased to 9,300 from 9,000, according to a filing with the Securities and Exchange Commission yesterday.
CEO Tom Wilson has turned his focus to expansion after spending years reducing sales to homeowners in states such as New York and Florida. Allstate had as many as 15,000 exclusive agencies and financial representatives in 2007.
“They see opportunities now where there’s really parts of the map, or areas within certain regions, where they feel like that’s a good underwriting environment,” Mark Dwelle, an analyst at RBC Capital Markets, said in a telephone interview before the annual filing.
Allstate plans to add 120 agency owners in Texas this year, including about 36 in the Houston region, where the company also intends to recruit about 240 people to its licensed sales staff, the insurer said in a Feb. 18 statement. The insurer has also targeted growth in Utah and Nevada. Building business in such states may allow the company to increase sales in coastal regions where growth was constrained amid concern that risk was too concentrated, the company has said.
Allstate had 6.08 million homeowner policies in force at its namesake brand as of Dec. 31, the same figure as three months earlier. It was the first time the company avoided a quarter-over-quarter decrease since at least 2010.
Wilson sees agency locations as a way to build relationships with customers who need multipleinsurance products and prefer face-to-face interaction. For years Allstate lost market share in the auto market to Progressive Corp. and Berkshire Hathaway Inc.’s Geico unit, which focus on sales through the Internet.
“We’re more interested in selling everything we can sell to you,” the CEO said Feb. 6 in a conference call with analysts. “So, if you thought of us as a retail store, we don’t just want to sell shirts, we want to sell shirts, pants, shoes, socks, whatever you need.”
The insurer has been highlighting coverage for renters and commercial clients. Wilson bought Esurance in 2011 to target customers who prefer to shop online.
Allstate gained 15 percent in the past year through yesterday, compared with the 26 percent rally of the 21-company Standard & Poor’s 500 Insurance Index. The insurer jumped 3.2 percent yesterday after announcing late Feb. 19 that it authorized the repurchase of as much as $2.5 billion in shares, the company’s biggest buyback plan since 2006.
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