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“your in good hands will All State”. NOT!
Yes, Allstate has demonstrated little loyalty to their agents and customers for the past few years in different parts of the country
You must mean the past few decades.
Allstate has been no more or less loyal than the industry in general to their insureds. Agents are a different story.
The days of “loyalty” buying you anything as a consumer are over I’m afraid.
I both agree and disagree with this statement.
In this economic climate–it’s not new business that is driving sustainable growth for an insurance company–it’s also customer retention.
I disagree with you in for this reason: Insurance companies (the smart ones, at any rate) are switching to a customer-retention focus to maximize growth potential. So in that respect, yes, loyalty will get you something–because they want you to stay with the company.
However, that change isn’t happening overnight–and the “loyalty not buying you anything” standard runs both ways–customers forgoing quality of service for cheapest premiums they can find, and switching carriers often does not make for a foundation of loyalty and trust.
Jon, you are contradicting this article. Allstate is dropping loyal customers who made the mistake of not having a valuable enough house and/or not carrying Allstate for their auto.
@Mr. Solvent:
I’m not discussing the article–I was replying to your statement “The days of “loyalty” buying you anything as a consumer are over I’m afraid.”
Frankly, stating Allstate making poor decisions is akin to waking up in the morning and going “wow, the sun is out!”
This tells you something about how much money they are making on personal auto policies.
When a company Non-Renews their customers it is for financial stability. The balance between risk and reward is very delicate in the Insurance industry and if you are not careful in evaluating these risk you not only endager all of your customers but your employees as well. So if they are losing 10,000 customers to have the ability to conintue to pay claims for the other 120,000, I can not blame them. The 10,000 customers have about 40 other companies to find a homeowners policy with. The other side of this is in reguards to customer loyalty, you are less likly to lose a customer that has more than 1 policy. In a way they are taking care of their customers but they are asking for the same loyalty in return. Also, I am willing to bet that Allstate (being a standard company) will offer better rates to the customers who switch than another company can offer them.
I do not work for Allstate but I can take a good guess as to the number of reasons why they would do this. If I were the head of the company I would agree with this proposal, its a win/win situation.
It is easy to see how it makes sense on paper. But these are the customers that helped build the company to the level they are today. ALFA did the same thing in Alabama this past year 97,000 people were non-renewed because they owned too old a home, or were farm owners, or owned rentals or mobile homes or some other reasoning. It has ruined our ability as independent agencies to place business. The market has been flooded and other companies are shutting us down to keep from over extending their exposure.
And these people are now left without coverage. They have paid in premiums for years and years. Some have never even filed a claim. These people deserved better. And so do these Allstate customers.
I agree with you to an extent. A company has an obligation to the state/federal government to maintain a certian amount of funds for claims loss per policy. If they are unable to maintain that stability they are forced by the state/federal government to release those policy holders. It is good that ALFA non-renewed because if there was a loss no one would have gotten paid and the state of Alabama would have had to flip the bill.
I agree on the fact that the costal market for insurance companies is in dire need of a change. I feel that the exposer to the company is not just their issue but it is also a combinations of cost of construction, false lawsuits,weather and CAT events.
People dont see the struggles that the larger companies are having due to the market. As an insured, I would rather have a company that can pay a claim when I make one, if a company non-renews me because they cant afford my claim, I would not be that heartbroken. As to fixing the issue with the insurance exposer on the costal areas, I would suggest a change with the Insurance Commission offices, they regulate the rules that the companies have to follow. DOI can make changes that lowers the risk of exposer and would allow the companies to feel comfortable with writing in those areas again.
It is not just coastal regions that have been shut down. Foremost will not write for the entire state. Others have also. Right now I have only one market for HO3 and that one is with an auto only. And now my DP-1 and HO8 markets are getting more restrictive. My point was not only has these cast offs left home owners angry and with very few competitive markets to choose from, but the sheer numbers have flooded the markets to the point that other companies have put a freeze on our state. Independent agents are struggling already due to the economy and now we have no markets to place homes to generate commissions. And this problem started with ALFA long before last year. I would love to illuminate you on the subject but I will not do it in a public venue–there is just too much power here. Look this company up. See the differences before and after Katrina. See how the rates compared to other companies. They had a stranglehold on this state. There is a lot more going on here than you could imagine. Politically speaking–ALFA rules.
It was built on the backs of farmers and lower incomed people. Now, they are too high risk. How would you like to have paid in premiums to a company for over 30 years and never filed a claim only to be non renew. You never missed a payment and your children insured their property through them and then you get shafted.
Oh yes it makes good fiscal sense. But after taking thousands of dollars from these people to build and grow your company through the years, their loyalty and hard earned money should count for something besides a piece of paper stating that they are no longer going to insure their home at the time they need it most–in their elder years.
It’s time to start looking to the Florida carriers who have expanded if you’re running out of markets. Universal Property and Casualty is actively appointing agents. It may not be the best option, but at least it’s an option.
“It may not be the best option, but at least it’s an option.”
The fact that Universal is actively appointing agents with the size of their book of business speaks volumes about Universal. I’d be very careful placing business with them. Not a fan at all.
Hillsborough, their premium written to surplus ratio last year was 5.86 to 1. For a heavily re-insured company that’s pretty good.
If I’m not placing with Universal, it’s not due to financial concern.
That’s because they never pay claims. That’s the issue with Universal. They have the worst reputation in the state when it comes to paying claims.
I agree with you but it still hurts the agents. My parents have two agencies in Charlotte and we are the ones who have to try to explain this to the customer and also get cursed out by irate customers.
Just another form of “redlining” which used to be illegal in South Carolina. I wonder if it still is illegal. It’s easy to see who they are targeting for business, and it surely isn’t those of lower income status. South Carolina should tell Allstate ‘hell no’, and if you don’t like it, get out of our state.
The is the most singleminded thing I have ever heard. 1. Insurance companies care about risk. 2. Insurance companies do not write Homeowners or Personal auto policies based on the monthly income. 3. When they submit their rates to the states, which they have already done here and it has been approved, they do it based on their risk and their loss ratio.
When you feel that you need to make comments like that I suggest that you do your research or try to work for an insurance company first.
I think what Ike meant to say is insurance companies used to have more appetite for risk. There is some truth to that argument. It’s also true that the landscape has changed. Loss frequency is increasing and payouts are increasing as well. I think it’s a change on the consumer side of the coin. Everyone wants something for nothing.
If people would stick to the general principal and definition as to what Insurance was truly about then I dont think the exposure would be the way it is. I think that people are milking every penny they can from the Insurance companies because they see them as a corporation much like the ones on Wall Street. The truth is that Insurance companies are taking a hit Financially and pertty soon being reinsured will not cover the cost of exposure. I have faith in Loyds (among others) and their abilities to reinsure the American Companies but unless people start being honest it will only get worse. The first to suffer will be the agent.
I find that educating the Insured is the best place to start. I have a conference in my communitiy that I do to educate the insured on what the Companies really are about and what they are responsible for. I also make sure they understand Insurance Fraud and the impact of false claims. It has helped but I am only 1 person.
Yes, I have reviewed some AL home policies (inland)recently and it’s amazing how fast rates are rising in non-coastal areas of states other than Florida. I’m always surprised that a carrier in B’ham will write a policy with a huge tree over hanging the house while we’ll get a memo from a Florida carrier if one palm fron is touching the house.
Ike, I’m no fan of Allstate but you could argue that if you’re the second largest writer of home insurance in the state then you’ve met your corporate responsibility from a customer service perspective. Which company is # 3,4,5… etc? Let’s berate these “non players” a little. Maybe it’s time for someone else to step up and assume the #2 spot.
SWFL, I said earlier that a lot of the Florida carriers are looking at and are expanding into the Carolinas. I think Universal Property and Casualty would be happy to assume the #2 spot. Would that be good for the market?
@Mr. Solvent – I agree 100%. Too many homeowners now, and studies have shown it is typically the lower priced homes, use their policy as a maintenance policy. That isn’t what it is intended for. I live in Missouri. In my subdivision, the average homeowner didn’t rush out and have their roofs and siding replaced after the Spring storms. The subdivision just a few miles down the road is mostly made of up homes in the $125 to $175k dollar homes. It is amazing how many of those homes had new roofs, new siding and even many claimed damage to their deck… The storms were not bad and there was no visible damage to these homes. People want something for nothing and the Carrier is stuck paying for it. It’s the 80/20 rule. I would bet Allstate has seen the statistics showing 80% of their claims in this state are coming from this group of people.
Allstate is not the only company that is doing this. Its just the only company that gave permission for this information to get into the Insurance Journal. In my research I am finding that a lot of companies are trying to maintain their financial stability to brace for the next hit in the market.
Flordia would be another good state to look at for Companies that are Non-renewing their policies due to high exposure. The state has paitned itself in a corner and is being faced with covering the costs of the claims for its residents. The department of insurance for that state tried to force the companies into taking huge losses and now they are fighting back.
Insurance is an organic idea and is constantly changing. I am wondering what will happen after this hurdle is passed, it should be an intersting site.
I’ve seen studies in Florida. The cutoff here seems to be right around $250,000. People in homes above that special coverage seem to file a lot fewer claims. It’s been a couple of years since I’ve looked so that number may be different now, but I’m sure it still exists.
Um, Other. A company has to give permission “for this information to get into Insurance Journal.” Ever heard of a press release? Since most of the major newspaper in SC (and NC) carried this, where do you think Insurance Journal got the info? Do you think Allstate called them and gave them a heads up?
NG – Insurance companies are very private and security driven. They do not release any information unless it is specified. If the newspapers have the information it was released by the company. This is not always the case but for Allstate and Farm Bureau I am more than sure it is. Companies non-renew large numbers of policies all the time, this is not new. The only reason it made headlines is because someone wanted it to.
There is a lot going on throughout the Insurance world and it’s causing a bit of a ripple in the water so to speak. I can tell you that through my decades of being a part of this industry, it’s not the first time companies have dropped customers in large bulk due to the risk.
Insurance is organic, it grows and sometimes parts of it die, but it will eventually grow again. Companies cannot always carry the burden that they would like to carry, sometimes it’s too much, its unfortunate that the insured has to suffer but that is also a part of any line of business.
Allstate in Lancaster South Carolina did not treat their loyal customers fairly. I sure this plan to drop customers just didn’t happen suddenly. Why should a customer have to find out the day you go to pay your premium that you have been cancelled, and the only explanation given is we have a new policy, if you don’t have auto insurance with us we have to cancel your policy…..no other options were offered to us. Shame on you Allstate, but I believe in the saying ” you will reap what you sow”
I recently received a letter from Allstate advising me that I’ve been dropped due to filing a claim after my home was buglarized. I’ve been a local customer with 0 claims filed in the last 7 years. What is insurance for again? Recoup your loss from the premiums I’ve paid and the buglar that was arrested and charged…
We’ve been loyal customers for nearly 14 years and have never filed a claim on our homeowners policy.
We did have auto & boat insurance with them for several years, however they weren’t competitive and we switched those nearly 10 years ago.
Last year we shopped around again and Allstate didn’t want our Auto insurance. I was told they weren’t writing any new auto policies. Today, I find out that we are on the cancel list. What poor business practice, no customer loyalty.
At the age of 19 I was insured with allstate on a renters policy. From that point on I have had renters and home owners with allstate. I am now 61. Talk about being surprised when I found I was never actully in good hands after all when I got the letter telling me I was not going to be renewed. I admit I did not have my car insured with all state any more, I moved that to State farm about 15 years ago to save money. I had been in conversation with my Allstate adgent about moving the car back to them but had planned to wait till renewal time to do it. So sad when the good hands people hold that hand up, ball it into a fist and then raise the middle finger at you and in most every case it is directed at the customer that is 60 or older. Shame on you Allstate. Oh and by the way, 42 years of loyalty and never a claim, how is dropping me making you more effcient, I never cost you one cent, only paid you year after year.
I used to get customer surveys from Allstate. Its hard to determine the reliability of a insurance company til AFTER you make a claim and see how well they treat you. I never had to make a claim in over 20 yrs of coverage. So now because my home isn’t young enough or expensive enough i wont be renewed along with so many other loyal customers..where’s my customer survey now ? BTW what happens if ALL the insurance companies use the same criteria to keep or cancell their policies..who will insure us then?