>Went to pay my car insurance bill today, and in the course of discussing why
>my rates were increasing despite clean record, my agent told me that Allstate
>would be "firing" all of its agents by next year - and nobody knows exactly
>what's going to happen after that - their services to be replaced by the
>Internet, possibly. He also said that he wasn't able to write policies for
>80% of the business that walked in his door because of credit problems. And
>that he had had to lay off all of his staff except his wife because of his
>margins being squeezed by Allstate. And that - I didn't get the details of
>this - that the insurance business was in big trouble generally, not only
>Allstate, and there were going to be big rate hikes next year. I had to stop
>talking because there were people waiting behind me - does anybody have any
>background on this?
The 500 issue of Fortune - April 17 - has an article on Allstate's travails. Familiar story to connoisseurs of the biz press: mature business, old business model, nimble new competitors, sleepy management until new CEO came in to shake things up, depressed stock price, The Web.... "Allstate's attempts to deal with the new players in its industry are compounded by 'channel conflict,' as the new-economy types call the humans who balk at seeing their livelihoods challenged." That is, the agents are being downsized - though it doesn't sound like they're being zeroed out - to be replaced largely by the web and 800-number call centers. Also troubling Allstate are reports that it tries hard to avoid paying claims. One trial lawyer is quoted as saying they're "a bunch of thugs."
Doug