Case Study Analysis and Solutions

Case ID: 715426

Abstract:
Case Solution & Analysis for Allstate Corporation, 2007-2013 by John R. Wells, Galen Danskin
After five years of global financial crises and natural catastrophes, Allstate, the USA's number two property and casualty insurer, seemed to be on the mend. It had been a tough ride for Thomas Wilson who had taken over as CEO on January 1, 2007 and vowed to "reinvent protection and retirement for the consumer." Soon after this statement, combination of exogenous shocks and fierce competition had driven the whole industry into underwriting losses. Meanwhile, Allstate continued to lose market share to GEICO and Progressive as it struggled to build its direct sales business in the face of opposition from its tied-agent distribution system. During the May 2011 Annual General Meeting (AGM), 31% of shareholders voted against Wilson's reappointment, the highest "no" vote for any CEO in the Standard & Poor's 500. Many speculated that he would not last long. To help boost direct sales, in October 2011, Wilson completed the acquisition of Esurance, a direct online specialist with a 2% share of online sales. In the next six months, Allstate's stock price rose 45%, buoyed by Wilson's promise that return on equity would reach 13% by 2014. At the May 2012 AGM, Wilson's support from shareholders surged to 97%. By the end of 2012, revenues were up 2% to $33.3 billion while operating profits surged 168% to $3.6 billion. With renewed support, Wilson pondered on what else he might do to ward off the challenges from GEICO and Progressive.

Keywords:
Insurance, Strategic planning, Strategy, Allstate Corporation 2007-2013 Case Solution

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