About 1,000 Allstate Corp. employees have accepted a voluntary buyout offer, which is hundreds more than the insurance company expected when it announced the offer months ago.
Allstate, the second-largest U.S. personal-lines insurer behind Bloomington, Ill.-based State Farm, said in January that it expected up to 700 of the 6,800 eligible workers to leave the company, reducing staff at the company’s home office in Northbrook, Ill. by about 10 percent.
Most of the workers who accepted the offer will leave by May 31.
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.
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.
Allstate shares fell 58 cents, or 1.1 percent, to close at $51.22 Friday on the New York Stock Exchange.
Was this article valuable?
Here are more articles you may enjoy.