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The Allstate Corporation Message Board

  • euse69 euse69 May 4, 1999 7:56 PM Flag

    All software

    Allstate to sell Y2K expertise. Old news but interesting.

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    • Insurance 101...better underwriting can lower the
      loss ratio. Allstate pays their claims. The problem
      with Allstate is their prima donna management. A bunch
      of specialists who know nothing about the business.
      They just spew consultant talk. Most can talk it but
      very few can walk it! Most RVPS could not manage in a
      real organisation where you are accountable for
      expenses ratios, NPW, RI, and insurance profit. Northbrook
      dictates and the pretty boys and girls bullshit the agents
      and employees enough to come close to their targets.
      Then it is off to the desert to talk consultant talk
      again. You become an AVP with Allstate and are in the
      fraternity for life. Then it is upward from there regardless
      of your business and leadership skills. They are
      weak and they know it. You want to hear about the

    • Simple logic. Claims take around $.60 of every
      premium dollar. Production expenses take about 20%
      commissions to agents, marketing, etc. Rest is left for
      profit and overhead (these are pretty generic figures).
      Now, isn't it easier to try to find a penny here or a
      penny there in claims payments, rather than in
      production expenses or overhead?

      A long time ago, in
      a galaxy far, far away, reducing loss expenses was
      the province of wizards known in the local tongue as
      "underwriters". They would strive to reduce the losses paid by
      careful selection of their customers.

      most companies think that of course it is easier to
      find that penny in agent's compensation, employee
      compensation (can you say DOWNSIZING?) or in expenses like
      employee benefits. Oh, pardon me, MOST employees'
      benefits. If you are on the executive floor, your salary
      and stock options are doubled. The acknowledged
      brilliance of senior insurance executives must not be
      trapled upon.

    • ALL is currently 1.8 X book value; only 11 X
      earnings.....Soon the word will get out and when it does, the longs
      reap the rewards. For goodness sake, forget the
      stadium and just look at the numbers! I'm done

    • Great question.....I would say be patient.....I think by XMAS we'll be seeing what we've been looking for.

    • I've used all online firms. Etrade,discount
      brokerage,schwab,DLJ direct,jb oxford. The best and the cheapest is
      Brown &co. You can use telephone,broker assist and
      internet computer. This three way trading helps when
      market goes crazy. Brown gives confirmation almost
      instantly. I use their phone system more because booting the
      PC to get to the internet takes to long when you see
      a stock is moving. Good luck.

    • Here's something interesting from Kiplinger's
      Personal Finance Magazine for June '99 (page 72) which
      gives rise to a question about Allstate:

      [insurance] industry as a whole is rewarding shareholders
      with higher returns, but in many cases it's because
      they're paying out less on claims. "It's been my
      experience that whena company's profits zoom up, usually the
      claims payments zoom down," says Clinton Miller, who has
      testified in about 400 bad-faith cases and is the author of
      "How Insurance Companies Settle Cases," as textbook
      for plaintiffs' lawyers. "If you're a stockholder of
      an insurance company that's making phenomenal
      profits, you may want to buy your insurance from another

      A 1998 Legg Mason report on Allstate, for example,
      shows how profitable it can be to put the squeeze on
      claims, which typically account for three-fourths of an
      insurance company's expenses. If Allstate could cut its
      loss ratio (the amount paid out in auto and homeowners
      claims as a percentage of premiums) by just one
      percentage point, the report says, it would save $186
      million and add 28 cents to its after-tax earnings per
      share. Between 1995 and 1997, Allstate did in fact
      manage to cut its loss ratio from 78% to

      end of Kiplingers report ----------

      Now my
      question is this: Although it might not be a good idea to
      Insure with Allstate, given their low loss-ratio, that
      means sky-high profits -- so why is the stock tanking?
      Seems to me that is the worst of both worlds. If the
      policyholders aren't being paid, all that extra cash should be
      going to the shareholders. What gives?

    • VRGN has a tremendous upside

    • I agree, they have an uncanny ability to take
      forever to fll a market order when the price is going up,
      but when you want to cancel that order... BAM in it
      goes! and you're stuck. Happened to me three times,
      third time I pulled out and went to E-trade. More
      expensive, but quick response, no mistakes and better

    • I'm not hearing anything similar to the
      activities mentioned in your post. And I'm certain something
      like this would quickly come to my attention.
      Certainly, a large number of agents exist who are so
      frustrated and angry that taking legal action is high on
      their wish list. Although true that individual agents
      are filing lawsuits on their own, as indeed are other
      company employee, a number of which show up in the
      Federal Ligitation section, there is no strategy by the
      agent association such as you have described. In fact,
      association by-laws prohibit the association from litigating.
      As to why someone doesn't wake up and address agent
      issues is, I believe, due to arrogance, deep pockets,
      and a confidence that the legal arena gives them a
      home court advantage. This is not to say that lawsuits
      will not be filed, rather that no such strategy of
      starting multiple fires exists.


    • I had success with some short term picks

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