Allstate’s benefits segment, which provides group supplemental and health coverage, is planning to eliminate several hundred positions in the insurer’s latest downsizing.
By Varada Bhat|June 10, 2022
Allstate’s benefits segment, which provides group supplemental and health coverage, is planning to eliminate several hundred positions in the insurer’s latest downsizing.
The job cuts, impacting about 200 positions from July to the end of the year, will primarily occur in servicing, billing, and sales, along with some other support roles, according to people with direct knowledge of the matter.
The layoffs were announced last Thursday by the unit’s COO, Paul Montanari, who cited operational efficiencies as the rationale. Most of these jobs will be transferred to Allstate’s office based in India, and the affected employees are required to train their replacements to do their jobs, according to people familiar with the matter.
Allstate Health and Benefits, previously known as Allstate Benefits, offers voluntary benefits and individual life and health products, including life, accident, critical illness, short-term disability, and other health insurance products sold through workplace-enrolling independent agents and Allstate exclusive agencies.
It accounts for 4.5% of Allstate’s 2021 consolidated total revenue, 5.2% of total adjusted net income, and 2.3% of its policies in force, according to the carrier’s most recent 10-K report to the Securities and Exchange Commission.
Allstate didn’t respond to a request for comment.
The carrier’s latest rounds of cuts and decision to outsource some of its support roles to India could be part of a larger shake-up within the company. Since late 2019, Allstate has been pursuing a “Transformative Growth Plan” intended to increase customer value and lower premiums, build a new technology ecosystem, streamline its business model, and improve efficiencies amid rising competition from fast-growing rivals like Progressive.
In its stockholder meeting held on May 24, 2022, CEO Tom Wilson cited how the auto insurance business is reducing costs without lowering margins by leveraging technologies such as quick photo claim, which enables settling claims with a lower expense.