Allstate’s Tom Wilson and Mario Rizzo expressed some positive trends during the company’s most recent earning call (2024 First Quarter Allstate Corporation Earnings Conference Call) which can have a big impact on your agency. Here’s a few highlights.
“We generated net income of $1.2 billion in the first quarter (of 2024). The profit improvement was broad-based,” Wilson explained. “It reflects successful execution of the auto insurance profit improvement plan, attractive homeowners’ insurance margins and the benefits from lower catastrophe losses in this quarter.”
Property-Liability Profits
According to Mario Rizzo, President of Property-Liability for Allstate Insurance Company, profits began to improve in the third quarter of 2023 as premiums outpaced loss and expense increases, with this continuing in this year’s first quarter. Rizzo continued “While auto margins have improved due to our price improvement actions, we remain fixed on ensuring that rate levels continue to keep pace with underlying cost trends driving improved profitability in those states not yet achieving target margins.”
Corporate Actions Can Drive Sales
In addition to favorable financials that demonstrate brand strength, Allstate is addressing property-liability growth opportunities in four key growth levers that can support agent opportunities to bundle products and reach higher variable compensation levels.
- Improve Customer Retention
- Auto and homeowners insurance renewal ratios stabilizing following decline due to significant price increases in 2022-2023.
- Reduce New Business Restrictions
- Unwound auto underwriting restrictions in states representing about 75% of Allstate brand auto countrywide premium.
- Increase Advertising
- Significant increases in Allstate brand advertising investment.
- Transformative Growth
- Increase Allstate exclusive agent productivity through bundling incentives and variable compensation for growth.
- New affordable, simple and connected auto and homeowners insurance offerings
Bundling Benefits Customers and Agents
Wilson stated “We’re focused on increasing policies in force under the Allstate brand.” The biggest takeaway for agents is that Allstate is committed to both brand and producer growth, which will be partially driven by easing underwriting restrictions and a focus on bundled products.
“Allstate agents continue to bundle auto and homeowners insurance at historically high levels,” according to Rizzo. “Improving customer retention remains key to improving our growth trajectory. Auto retention levels have stabilized and sequentially improved over the last two quarters and homeowners retention improved 0.8 points to the prior year quarter.”
Rizzo continued, “Our agents and employees continue to guide customers through the renewal process by offering coverage options and ways to save through innovative programs and discounts like Drivewise and Milewise telematics offerings. Growth can also be increased by easing new business restrictions. As rate adequacy has been achieved in more states, restrictive underwriting policies have been unwound in states representing more than 75% of Allstate brand auto premium. Increased Allstate brand advertising (as mentioned above) is also expected to increase growth.”
Taking Action for Financial Gains
With Allstate’s intention to increase its marketing spend, it can be a good time for you to piggyback on their efforts with local marketing investments. It’s equally important to ensure that you have enough well-trained staff and resources needed to manage both customer retention and acquisition.
If you need help achieving higher bundling rates so you can attain more favorable commission levels, we’re here to partner with you. Here’s how:
- We can help you assess your current financial situation and identify potential capital needs to fuel your growth.
- We can provide capital funding for approved agents / agencies with our “Summer 2024 No Origination Fee” option. Simply submit an Quick Application before June 15, 2024 and close the loan by July 31, 2024, and we’ll waive the origination fee.*
It’s easy to get started. Just contact our Agency Finance team or complete our Allstate Quick App. If you’re excited about growing your book of business with higher commission rates driven by bundled services, reach out today.
*Restrictions apply and are subject to credit approval. Loans must qualify under our Quick Application program with a maximum fee waived of $5,000.
