Allstate recently announced a major boost to its common stock dividend, reflecting its superior financial results, particularly in personal lines auto where it is a profitability leader. The only problem is that Allstate’s auto business isn’t growing. Indeed, last year Geico and Progressive accounted for 88 percent of all new customers and 84 percent of all new revenue in auto which is why both companies have overtaken Allstate in market share.
Like most auto carriers, Allstate needs to find ways to win more customers – particularly younger ones in the rapidly growing digital channel where both Geico and Progressive excel. But Allstate (and almost all other carriers who have tried) has struggled to make money selling online. I believe this is in part because their fraud and risk selection tools are inadequate to master the far more anonymous, fragmented and therefore fraudulent online market. And changes in demographics, commuting patterns and rising remote employment are all making finding a solution to this problem a top priority for carriers.
Coincidentally, VeracityID has demonstrated that our idFusion User Composable Risk Selection and Customer Experience Platform is capable of rapidly improving carrier loss ratios for business sold through the digital direct auto insurance channel.