One Thousand Allstate Employees Accept Voluntary Buyout Offer

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All you Personal Lines folks need to start remarketingthrough ICAT or TWIA (in Texas) for the Windstorm – try to get the jump on the newly opened market since they are no longer writing windstorm in tier 1 counties. But to all you Allstate folks, I hope the best is yet to come for you & appreciate your decision to make the changes needed due to the changes in our world today.

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This should not be unexpected, in fact you should see more of this from the \”market share\” carriers i.e. direct writers. Back in the 60\’s when the P&C retail business really got going, the direct writers particularly believed in and sought big shares of markets. State Farm in fact would brag about insuring 30% of Florida homes, of half of Tampa, 40% of Houston, etc. The fallacy of this strategy is plain to see-when the weather is great you\’re a really winner and you can drive the cost out of your products with computers, streamlined workflows, outsourced services, etc. When it\’s nasty in the world with earthquakes, hurricanes, hail storms, tornadoes, mold problems, construction defects, escalating medical costs, you\’re in terrible shape in you have 30% of any one market. I mean, what foolish carrier would have 35% of Galveston, Houston, New Orleans, Tampa or Miami insured in this environment? I\’ll tell you who: Allstate, State Farm, Farmers, Nationwide, Liberty Mutual, etc. and they will pay dearly for it. They also have disrupted the entire property business in the coastal US from Long Island to Miami and we are all paying the price for their stupid strategy.

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April 12, 2006

The article states;

\”Allstate introduced the cuts to trim costs and improve operations after losing $1.55 billion in the third quarter after Katrina and other hurricanes battered the Gulf Coast last summer.

It was Allstate\’s biggest quarterly loss as a publicly traded company.\”
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Comment: All businesses can suffer \”losses\”. Losses do not necessarily mean a company is not still quite healthy / profitable.

For underlying reasons, can companies create synthetic impressions, to its internal and external people supported foundation, that things are better than they actually are, and absorb the anticipated financial / social ripple effect of such actions.

Sure they can.

Look at all of the corporate scandals \”discovered\” so far, that were based on misleading information that was intended to mislead millions of people…and how many of those companies are still plugging away.

Conversely, can companies create synthetic impressions, to its internal and external people supported foundation, that things are WORSE than they actually are, and absorb the anticipated (temporary) financial / social ripple effect of such actions, for future financial gain?

Careful construction of internal and public statements, that say very little, ambiguously, can imply much invisibly …in order for one\’s opinions for future financial gain expectations to become fulfilled by an unsuspecting public.
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\”Allstate also recently announced that it bought billions of dollars in reinsurance to cover the costs of future natural disasters and claims.

Spokesman Michael Trevino has said the job cuts were not intended to help cover the higher reinsurance costs, which he said would be partly offset by higher premiums.

The company also has been limiting property insurance offered in hurricane- and earthquake-prone regions. Last month, Allstate said it would stop offering new earthquake insurance in all markets.\”
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Comment: Publicly saying that something is not intended, does not necessarily mean it was not anticipated behind the scenes as being an actual cost cutting possibility that might occur.

Skipping ahead a few pages in the how-to book of mass propaganda, insurers may be trying to manipulate the general public psyche into eventually accepting a hybrid, federally (tax payer) supported, indemnification model that will protect their profits, no matter what, globally.

rogerpopegc@yahoo.com