The tables and charts that represent the historical financial metrics

The tables and charts that represent the historical

This preview shows page 29 - 32 out of 57 pages.

and implement effective strategies in order to survive and ultimately thrive following the crisis. The tables and charts that represent the historical financial metrics demonstrate the recovery and growth of Allstate Insurance Company. The relevant reporting range is from the years of 2011 to 2015. The financials reported by the company have shown growth that is representative of historical trends. However, the rates of the firm’s growth are not showing that the firm was operating at its full potential. As a result, the firm lost market share and position. The Allstate Insurance Company In particular, the firm fell out of its market position of being the second-largest personal auto insurer in 2013 (Insurance Journal, 2013). Considering that auto insurance is one of the company’s strongest product offerings, which was the first niche of the firm from the start, this fact seems very disturbing. The reason of this loss is obvious as
Image of page 29

Subscribe to view the full document.

ALLSTATE INSURANCE CORPORATION CASE ANALYSIS 29 the GEICO Corporation managed to exploit growth that aligned with the insurance industry in the United States. This growth the GEICO Corporation enjoyed while the Allstate Insurance Corporation faced various problems and consequently remained stagnant. This situation is illustrated in the figure below (Insurance Journal, 2013). As we see, the number of Allstate Insurance Company direct premiums in the auto insurance market remained to be almost the same from year 2009 through 2013. There was even a slight decrease in this metric reported in the time period between 2009 and 2012. In contrast, GEICO has ensured a stable growth of its direct premiums from year 2009 through 2013. Moreover, GEICO’s trend illustrated in this table is more representative of the general market trends of the insurance industry in the United States at the time. During the five years represented in the table, growth rates reported in direct premiums written by Allstate Insurance Corporation were also lower than average growth rates in direct premiums written by other insurance companies in the United States insurance industry. Even in
Image of page 30
ALLSTATE INSURANCE CORPORATION CASE ANALYSIS 30 2012, when the Allstate Insurance Corporation and lowered its rates, the revenue from direct premiums fell slightly (MarketWatch, 2016). As a result, the Allstate Insurance Corporation currently falls behind the industry in terms of average growth in the personal automotive insurance sector. The lack of growth by Allstate is a contributing factor to the loss of market share. While the loss of market share is never a good metric, the firm was still able to maintain its position as an insurance industry leader. Most of the financial indicators reported by the Allstate Company show a limited growth trend over the last several years, with no signs of increased growth being reported recently. The rates of company’s growth are markedly lower than the average growth rates of the insurance industry. The net income reported fell from $2.85 billion to $2.17 billion, net investing cash flow experienced decrease from $1.62 billion to $742 million and there was a decline in total assets from $110.31 billion to $106.5 billion from year 2014 to 2015.
Image of page 31

Subscribe to view the full document.

Image of page 32
  • Fall '18
  • Notgrass

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Ask Expert Tutors You can ask You can ask ( soon) You can ask (will expire )
Answers in as fast as 15 minutes