Wednesday, January 16, 2008

Allstate - not ALL State anymore

#2 AllState has been suspended from writing auto insurance policies in the giant state of Florida, by the FL Insurance Commissioner Kevin McCarthy. This is in response to AllState refusing to comply fully with a subpoena from the state. They failed to turn in the information that the state had requested on hurricane and other property coverage rates.

This just re-emphasizes the complexities in the Auto Insurance industry - which is regulated not even by the Fed, but by each state! The state regulations even range upto and differ from each other in the capitalization of some of the alphabets in the print communication sent to the customers. That's how rigid the industry is. Every auto insurance company is mandated to report their rates and algorithms behind the rates to the state. Failure to comply with this, is like defrauding on earnings reporting. In the latter, you attract accounting scandal-suits or anti-trust lawsuits, while in the former, you're prevented from running new business as in the case of AllState.

Nevertheless, am I thrilled about AllState being in this condition? From the bottom of my heart. FL is a $1.9 Billion annual business for AllState. That's gone (at least until their lobbyists work something out). PLUS, now they have to undergo re-branding efforts and related expenses right? I mean, in an industry that is built on trust and customer satisfaction, who would believe them if they call themselves ALLState now? I would suggest something like "ALMOST ALLState". Oops, but then they got to change their tagline, perhaps to something like, "You're in good hands, USUALLY - except in FL where we got butter fingers now"

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4 Comments:

Anonymous Anonymous said...

So who's #1 in auto insurance?

8:57 PM  
Anonymous Keith said...

Surely one or more executives at All State will lose their jobs over this amazingly ugly public incident.

9:16 PM  
Blogger Padmanaban Kumar (Paddu @ Just for Kicks) said...

State Farm, All State, Progressive, Geico. That's the order. State Farm and All State are legacy and their sole purpose of existence in the industry right now is to lose market share.

9:23 PM  
Blogger Padmanaban Kumar (Paddu @ Just for Kicks) said...

I agree, Keith. FL State Product Manager must have got fired right when they got sub-poened in FL.

9:24 PM  

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