Allstate 2013 Annual Report Download - page 145

pricing and operational capabilities. When we do not offer a product our customers need, we may make available
non-proprietary products that meet their needs.
Allstate is executing a multi-year effort to drive the customer experience. We utilize specific customer value
propositions for each brand to improve our competitive position and performance. Over time, delivering on these
customer value propositions may include investments in resources and require significant changes to our products and
capabilities.
Our operating priorities for the Protection segment include achieving profitable market share growth for our auto
business as well as earning acceptable returns on our homeowners business. Key goals include:
• Improving customer loyalty and retention;
• Deepening customer product relationships;
• Improving auto competitive position for a greater share of consumers;
• Improving the profitability of our homeowners business;
• Investing in the effectiveness and reach of our multiple distribution channels including self-directed consumers
through our Esurance brand; and
• Maintaining a strong capital foundation through risk management and effective resource allocation.
Our strategy for the Allstate brand focuses on customers who prefer local personal advice and service and are
brand-sensitive. Our customer-focused strategy for the Allstate brand aligns targeted marketing, product innovation,
distribution effectiveness, and pricing toward acquiring and retaining an increased share of our target customers, which
generally refers to consumers who want to purchase multiple products from one insurance provider including auto,
homeowners and financial products, who have better retention and potentially present more favorable prospects for
profitability over the course of their relationships with us. As a result of this strategy, the majority of the Allstate brand’s
policies are owned by customers with multiple products.
The Allstate brand utilizes marketing delivered to target customers to promote our strategic priorities, with
messaging that continues to communicate ease of doing business with Allstate and Allstate agencies, good value, as
well as the importance of having proper coverage by highlighting our comprehensive product and coverage options.
The Allstate brand differentiates itself from competitors by offering a comprehensive range of innovative product
options and features as well as product customization, including Allstate Your Choice Auto姞 with options such as
accident forgiveness, safe driving deductible rewards and a safe driving bonus, and Allstate House and Home姞 that
provides options of coverage for roof damage including graduated coverage and pricing based on roof type and age. In
addition, we offer a Claim Satisfaction Guaranteesm that promises a return of premium to Allstate brand standard auto
insurance customers dissatisfied with their claims experience. Our DRIVEWISE姞 program enables participating
customers to be eligible for discounts based on driving performance as measured by a device installed in the vehicle. We
will continue to focus on developing and introducing products and services that benefit today’s consumers and further
differentiate Allstate and enhance the customer experience. We will deepen customer relationships through value-
added customer interactions and expanding our presence in households with multiple products by providing financial
protection for customer needs. In certain areas with higher risk of catastrophes, we offer a homeowners product from
North Light Specialty Insurance Company (‘‘North Light’’), our excess and surplus lines carrier. When an Allstate
product is not available, we make available non-proprietary products for customers through brokering arrangements. For
example, in hurricane exposed areas, Allstate agencies sell non-proprietary property insurance products to customers
who prefer to use a single agent for all their insurance needs.
We are undergoing a focused effort to enhance our capabilities by implementing uniform processes and standards
to elevate the level and consistency of our customer experience. We continue to enhance technology to integrate our
distribution channels, improve customer service, facilitate the introduction of new products and services and reduce
infrastructure costs related to supporting agencies and handling claims. These actions and others are designed to
optimize the effectiveness of our distribution and service channels by increasing the productivity of the Allstate brand’s
exclusive agencies. Since Allstate brand customers prefer personal advice and assistance, beginning in 2013 all Allstate
brand customers who purchased their policies directly through call centers and the internet will be assigned an Allstate
exclusive agency relationship.
Our pricing and underwriting strategies and decisions are designed to enhance both our competitive position and
our profit potential. Sophisticated pricing uses a number of risk evaluation factors including insurance scoring, to the
extent permissible by regulations, based on information that is obtained from credit reports. Our updated auto risk
evaluation pricing model was implemented for 9 states in 2012. Our pricing strategy involves marketplace pricing and
underwriting decisions that are based on these risk evaluation models and an evaluation of competitors. We will utilize
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