Allstate insurance corporation case analysis 43 there

ALLSTATE INSURANCE CORPORATION CASE ANALYSIS 43
There is no significant growth in sales observed in the period between 2011 and 2015. As
a result the company has lost its second place in the auto insurance industry to GEICO. Aside
from obvious negative influence of this factor on Allstate’s growth, this stagnation scares away
investors. There is a high probability that most of investors might choose investing in insurance
companies which are growing dramatically like GEICO. Even a favorable beta index may not be
enough to persuade investors.
Slow revenue growth complicates the implementation of new mechanisms, instruments
and technologies in any business. If revenues are now enough for financing new projects,
managers may not have the financial resources to fund such improvement projects. The fact that
Allstate’s revenues remain to be on the same level for several years is an unfavorable trend the
acts as a warning sign for investors.
Ineffective use of technology. Outdated and ineffective use of newer technology
decreases the potential organizational efficiencies. The current business model which is used in
the company does not employ modern technologies that are employed by industry competitors.
A necessity of moving towards a cloud-centered business model was justified previously. Until
such conversion, collaboration between agencies and the company’s numerous employees occurs

ALLSTATE INSURANCE CORPORATION CASE ANALYSIS 44
on the basis of a standard business model which was used by the company during the last twenty
years. This model implies common problems which are addressed by modern business models.
Hierarchical structure of the company complicates the process of data collection and data
processing. Large amounts of data cannot be processed and converted into business knowledge
effectively, which negatively affects the decisions making process. Standard business model is
usually not very effective for collaboration amongst employees and management. In order to
interact with each other and share work-related ideas, employees are forced to use the help of
intermediaries and managers instead of communicating directly to each other. However, modern
cloud-centered business model simplifies this process. Thus, having outdated technologies means
not taking advantage of the firm’s human resources.
At the moment, usage of modern technologies at Allstate mostly boils down to the usage
of standard program software, modern communicational channels and the Colossus system. It
stands to reason that Allstate is not benefiting from all the advantages that modern technology
can offer. In addition to outdated business model which doesn’t effectively use modern
technologies. In most cases, the company continues to use traditional advertisement tools for
carrying the message of “being in good hands with Allstate”. For example, it has continued to
use the instrument of celebrity endorsement by prolonging a contract with Dennis Haysbert in
2015 (Nielsen, 2015).