Maybe They Weren't Such Good Hands After All?
By Jocelyn Geboy in News on Apr 10, 2006 6:34PM
Just an interesting bit of business news on a Monday: When Allstate recently got their financial asses kicked by the likes of Katrina and other hurricanes last summer, they decided to trim costs and improve operations. (They lost $1.55 billion in the third quarter -- their biggest quarterly loss as a publicly traded company. )
They offered 6,800 workers a voluntary buyout offer at the Northbrook office and expected about 700 to take the deal, reducing the workforce there by about 10 percent. However, nearly 1,000 employees took them up on the deal and are adios-ing by May 31.
And don't worry, everyone. The job cuts aren't going to cover the costs Allstate is incurring to buy reinsurance for future natural disasters. Those will be partly offset by higher premiums. The company also has been limiting property insurance offered in hurricane- and earthquake-prone regions, and it's gonna stop offering new earthquake insurance in all markets. Cool. Maybe State Farmwill be there.
Allstate is the second-largest U.S. personal-lines insurer behind Bloomington-based State Farm.