Allstate Case Summary

Allstate has a strong market position in the property and casualty insurance business, which has enabled the company to develop a proprietary database of underwriting and sophisticated pricing. It also helps the company to accurately price risks and cross sell products within its customer base. Allstate has a diversified product portfolio of various insurance lines, including auto, property, life and commercial. Allstate provides insurance products to more than 16 million households through an exclusive network of 12,500 exclusive agencies and financial representatives in the US and Canada, as well as through independent agencies, call centers and the internet. Allstate follows a sophisticated pricing method where the risk is matched to the price. The company's wide distribution network enables the company to reach its customers both through traditional and nontraditional means. In addition, it also enhances the cross-selling opportunities for the company. The diversified product portfolio and wide distribution network of the company increases the market share and revenues by retaining customers. …show more content…
This is evident from the favorable improvement in its combined ratio. For insurance companies, combined ratio is the ratio of claims and claims expense, amortization of deferred policy acquisition costs, operating costs and expenses and restructuring and related charges to premiums earned. Lower combined ratio is better as that indicates higher operating margins. During FY2011-15, Allstate's combined ratio declined to 94.9% in FY2015 from 103.4% in FY2011. As a result, the company's operating profit increased from $959 million FY2011 to $3,282 million in FY2015. Efficient expense management is helping in increasing the underwriting profitability of