Allstate Corp. plans to leverage the pool of recently laid-off tech workers to help the insurer review its business.
Best known for auto and home insurance, the company invests in technology, including artificial intelligence and telematics, that determine premiums based on customers’ driving habits, to tap into new customers and markets. According to financial director Jess Merten, the massive job losses at technology companies could make the search for a new job easier.
“We’re looking to sort of upgrade talent across the organization, so there’s an opportunity if people get laid off from other places,” Merten said in an interview in Chicago. “Top talent is part of our transformation strategy.”
The push comes as Allstate, which had about 54,300 employees at the end of 2021, battles rising costs that contributed to what the company warned of a whopping $385 million net loss when it reports fourth-quarter results next month. The insurer has also set aside reserves for unpaid claims and disclosed expenses related to Winter Storm Elliott.
Still, it plans to continue with a number of changes designed to push it into the future. These include technology to track how people drive, and easy-to-use mobile applications that allow customers to perform simple tasks such as changing their address without having to reach call centers. Another plan is to provide insurance quotes using AI.
“It may not seem innovative when you talk about Facebook,” Merten said in one of the company’s downtown offices. “This is an innovative way of doing things within the insurance industry.”
Help could come from the tens of thousands of workers who lost their jobs at tech companies in recent months. Google parent Alphabet Inc. joined a wave of other industry giants on Friday that have drastically scaled down their activities amid a faltering global economy and rising inflation. In November, the most recent month for which data is available, the technology sector announced 52,771 cuts, for a total of 80,978 over the year, according to consulting firm Challenger, Gray & Christmas Inc.
Supply chain disruptions caused by the global pandemic have pushed up the cost of parts to repair things like cars and homes, while a shortage of skilled labor is also driving up costs. While headline inflation has fallen, the components driving Allstate’s costs have not fallen as fast.
“I would expect — and I don’t have a crystal ball — that you’ll continue to see work pressure in the bodyshops,” he said.
According to Merten, higher inflation and macroeconomic headwinds will not slow Allstate’s transformation. Even with a long-term goal of reducing costs, the company has no plans to cut major jobs such as in the technology and banking sectors.
“We know what the formula looks like to make money in auto insurance, and what we’re not going to do is give up on our transformation,” he said. “We cannot wait for inflationary factors to ease or moderate and then pick up again. What we’re trying to do is simple things, like make business easier.”
Allstate, which previously said 75 percent of its employees work remotely, is in no rush to decide where its new headquarters will be. The company sold its Northbrook, Illinois, campus last year and is in no rush to choose a new location, he said.
“I think creating space that feels like pre-pandemic isn’t going to be what attracts people,” he said. “We think very carefully about what we do, how we do it in what works for the masses of people, because you want them to come in and say, ‘That was great.'”
Photo: Photographer: Christopher Dilts/Bloomberg
Copyright 2023 Bloomberg.
Interested in Insurance engineering?
Receive automatic notifications for this topic.