The Allstate Corp., Chicago, one of the nation’s largest insurance companies with revenues of more than $25 billion, said yesterday that it would begin marketing insurance policies directly to consumers through the Internet and by phone as part of a massive restructuring of its operations.
The company, which currently sells its property and casualty insurance through a network of 15,200 agents, said it would attempt to create a hybrid marketing organization in which customers can purchase insurance either through agents or directly from the company.
“Our agents are the core of our business and always will be the core of our business,” said April Hattori, an Allstate spokeswoman. “This will enable all of our customers to receive quotes and obtain policies through agents, by phone or through the Internet.”
Hattori said Allstate hoped to launch the program in Oregon in May of next year and gradually expand it around the country, state by state, with 16 states scheduled to be included by the end of next year and the rest of the country by the end of the following year.
“This business model meets the needs of a very large and profitable segment of insurance consumers who want more responsive service and who want their insurance company to be easier to do business with,” said Edward M. Liddy, Allstate’s chairman/CEO and president, in a prepared statement. “The value is in the convenience of conducting business anytime, anywhere, any way and in the reassurance of having the local presence of a professional insurance agent available as needed.”
In a prepared release, the company also said that a direct sales model would allow it to price its products more competitively.
Allstate said it would eliminate about 4,000 non-agent jobs from various divisions throughout the company by the end of next year as part of a restructuring intended to save about $600 million. The savings will be invested in initiatives that support its new direct sales strategy, Hattori said.
The company already operates several call centers, but Hattori said she was not certain if additional centers would be added to support the company’s move to a direct response environment. She said additional agents would be added to the existing centers, however. The company is developing its Internet strategy internally.
Allstate has had a long relationship with advertising agency Leo Burnett, Chicago. Hattori said the company did not announce any plans to seek a new agency.