Allstate Looking to Form Separate Calif. Subsidiary

While noting it is a challenging market, Allstate Corp. is looking to expand its presence in the California auto market by establishing a separate company for its state operations that would focus specifically on the auto market.

According to Allstate Corp. spokeswoman Lisa Wann-amaker, “At this point, our conversations with the California Department of Insurance [CDI] continue to be productive and we anticipate approval on our preliminary application. Once we receive approval for the preliminary application, we go to the final stage of submitting our application for certificate of approval.

“We wanted to be more flexible and nimble in the state and utilize California-specific solutions in addressing the marketplace,” Wannamaker continued. “We believe we can accomplish this by dedicating capital and resources to the California market through a stand-alone company, as opposed to the current structure that has the California region competing for corporate resources with other regions within the Allstate Corporation.”

According to Nanci Kramer, spokesperson for the CDI, “It is hard with an application that is pending because the Department by statute is not allowed to comment on pending applications, but I can tell you, this kind of request is not at all uncommon. State Farm did this and a couple of others did after Prop 103. There are a number of issues currently pending with Allstate. The Commissioner has always said that the Department is always happy to talk to those whom we regulate to work things out in the best interests of the consumers and the marketplace. Commissioner Low had the same position.”

Wannamaker said that such approval would allow the company to become more focused on the nation’s top auto market.

“Our relationships with employees, agents and customers will be more focused and we’ll be better positioned to respond to issues that come up,” Wannamaker said. “We already sell auto in California. We’re very well established here with three different companies operating—Allstate Insurance, Allstate Indemnity and Allstate Property & Casualty. We want to remain in California.”

According to numbers provided by the company, Allstate has 1,262 agents in the state, 110 of whom are independent. Allstate has some 2 million auto policies in the state and has an auto market share of 10.5 percent (according to 2001 A.M. Best numbers).

Topics California Auto