Allstate Corporation
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Company Details
- Company name: Allstate Corporation
- Country: USA
- Sub Sector: Insurance - N. America
- Industry Group: Insurance
- Parent Sector: Financials
According to its website, the Allstate Corporation is the nation’s largest publicly held personal lines insurer. A Fortune 100 company, with $156.4 billion in assets, Allstate sells 13 major lines of insurance, including auto, property, life and commercial. Allstate also offers retirement and investment products and banking services. Allstate is widely known through the “You’re In Good Hands With Allstate®” slogan. Allstate was founded in 1931 and became a publicly traded company in 1993. The Allstate Corporation encompasses more than 70,000 professionals. Of its employees, more than 30 percent are minorities; 59.1 percent are women.
Carbon Disclosure
The following data is © Carbon Disclosure Project and was provided by the Allstate Corporation in response to the Carbon Disclosure Project Greenhouse Gas Emissions questionnaires.
Regulatory risks
In contrast to the manufacturing or energy sectors, Allstate is a service company, so we do not expect climate change regulations to significantly impact our operations directly. Allstate currently pursues opportunities to conserve energy in our business operations, so we expect that we will be able to comply with any regulatory changes such as heightened energy efficiency standards or greenhouse gas emissions limits/taxes with minimal financial impact to the company. Allstate has also undertaken energy efficiency measures in buildings that it owns and uses for its business operations and continues to assess additional measures as part of a corporate wide environmental impact reduction program.
Physical risks
As an insurance and financial services provider, the physical risks to our business operations are relatively low and deal mainly with the infrastructure of our business centers and the possible disruption of service to our customers. Allstate maintains a robust business continuity plan, which we review and update regularly, in order to minimize these risks. We have call centers and claims offices located throughout the country, and we have the ability to automatically re-route customers to unaffected offices. Additionally Allstate maintains a small fleet of mobile response units, which allows us to reach our customers and process claims in the immediate aftermath of a catastrophe, even in the hardest hit areas.
General risks
Allstate is the largest publicly held personal lines property and casualty insurer in America. The company insures 1 in 9 vehicles and 1 in 8 homes in America. Changing climate conditions may adversely affect our financial condition, results of operations or cash flows. Allstate recognizes the emerging scientific consensus that the world is getting warmer, and that this trend is influenced to some extent by emissions of greenhouse gases. Climate change, to the extent it produces rising temperatures and changes in weather patterns, could impact the frequency or severity of extreme weather events and wildfires. Such changes could also impact the affordability and availability of homeowners insurance. For example, eight of the 10 biggest natural catastrophes in U.S. history have occurred in the last decade. Recent hurricane seasons have caused unprecedented damage and affected millions of Americans throughout the Gulf Coast and Florida. These infrequent but extraordinarily devastating natural catastrophes present serious risks for consumers, for insurers and for the economy. It’s one of the reasons insurance in catastrophe-prone areas is growing more expensive—and less available.
To the extent that climate change impacts mortality rates, our Allstate Financial segment would be impacted to the extent those changes do not match our the long-term mortality assumptions in our product pricing.
General and regulatory risks management
As stated above, regarding regulatory risks, Allstate currently pursues opportunities to conserve energy in our business operations, so we expect that we will be able to comply with any regulatory changes such as heightened energy efficiency standards or greenhouse gas emissions limits/taxes with minimal financial impact to the company. We are committed to conducting business in a sensible way that protects and preserves the natural environment because we feel it is the right thing to do as a good corporate citizen.
Related to physical and general risks, Allstate continues to work to better prepare and protect America through our collaboration with ProtectingAmerica.org. We also maintain a robust business continuity plan to ensure we will be there for our customers in their times of need.
Current and/or future financial effects of risks
As discussed earlier, the risks identified above primarily relate to the extent climate change influences extreme weather events. As part of our catastrophe management efforts, we are involved with ProtectingAmerica.org, a coalition working to create a stronger public/private partnership to protect people, families, communities and our national economy more effectively from weather related and other catastrophes. The ProtectingAmerica.org coalition is dedicated to raising awareness, educating the public and policymakers, and offering solutions that will better prepare and protect consumers, and the American economy from major catastrophes in a sensible, cost-effective fashion. The comprehensive solution being advanced includes the development of government sponsored, privately funded catastrophe funds at the state and national levels; improved prevention and mitigation measures, including the adoption of more effective land use policies and stronger building codes; enhanced public education about catastrophe risk; better catastrophe relief, recovery and rebuilding processes; and a rigorous process of continuous improvement for catastrophe preparedness and response programs and processes.
Unfortunately, many communities in America today are in the path of natural disasters that have become more devastating in the last decade. For Allstate and other companies in the insurance industry, this means trying to balance protecting customers in high-risk areas with protecting the remaining insured households across the country. For example, actions we have taken or are considering to maintain an acceptable catastrophe exposure level in our property business include: purchasing reinsurance or engaging in other forms of risk transfer arrangements; limitations on new business writings; not offering continuing coverage to some existing policyholders; withdrawing from certain geographic markets; changes in rates, deductibles and coverage; changes to underwriting requirements, including limitations in coastal and adjacent counties; discontinuing coverage for certain types of residences; and/or removing wind coverage from certain policies and allowing our agencies to help customers apply for wind coverage through state facilities such as wind pools. While actions taken are primarily focused on reducing the catastrophe exposure in our personal and commercial property businesses, we also consider their impact on our ability to market our auto lines when evaluating the feasibility of their implementation.
Through our insurance business, we will continue to monitor changes in climate and weather patterns. Allstate keeps abreast of ongoing scientific and hurricane modeling research primarily through regular discussions with premiere hurricane modelers. Those discussions focus upon the prevailing scientific thought about how climate change might be expected to impact the frequency and severity of future hurricanes and how new findings from ongoing research should be reflected in the cost of insurance. Allstate will continue to encourage modelers to make improvements as science advances, and ask them to provide us with the best science-based models and expected hurricane damage and loss projections. To permit Allstate to adjust to evolving risk, we are working for changes in the regulatory environment, including fewer restrictions on underwriting and recognition of the need for appropriate risk based pricing.
Opportunities presented by current or anticipated regulatory requirements on climate change
We generally do not expect current or anticipated regulatory requirements related to climate change to create opportunities related to Allstate’s personal lines and life insurance businesses. However, we continue to monitor the regulatory environment to identify opportunities that may arise.
Opportunities presented by current or anticipated physical changes resulting from climate change
To the extent climate change produces rising temperatures and changes in weather patterns that could impact the frequency or severity of extreme weather events and wildfires, we continue to monitor such potential changes to attempt to make sure they are accurately reflected in the rates we charge for insurance that provides coverage related to extreme weather events and wildfires.
General opportunities presented by climate change
Allstate is primarily engaged in the personal property and casualty insurance business and the life insurance, retirement and investment products business. Because Allstate’s property and casualty rates must be actuarially related to the risk covered, commercial opportunities presented by climate change in personal insurance lines are limited. In the homeowners’ line, Allstate offers underwriting incentives designed to encourage improved resistance to hurricane damage. In many areas, we offer lower rates for homes constructed under more modern and stringent building codes and for homes retrofitted with improvements designed to better withstand hurricane force winds. Allstate continues to examine actuarial data to identify any situations where lower emissions and lower risk may converge. In addition, Allstate pursues environmentally friendly and convenient options such as paperless billing for our customers. We are also exploring other environmentally friendly product options for our customers.
Planned investment in products and services designed to minimise/adapt to effects of climate change
Allstate continues to expand its paperless billing option, and we have even piloted a new product feature called Allstate GreenSM for customers who participate in the Allstate® Easy Pay Plan. By choosing this option, customers can virtually eliminate their paper statements and Allstate will contribute to a local environmentally-friendly project, such as a reforestation initiative.
Our Investment team proactively invests in clean energy projects as part of its larger investment strategy.
Future financial effects of opportunities presented by climate change
Allstate continues to investigate new product opportunities related to climate change. Our Investment team will also continue to evaluate clean energy investment opportunities.
Greenhouse Gas Emissions
- Greenhouse Gas emissions methodology used: GHG Protocol.
- Accounting year: 01/01/2007 to 31/12/2007
- Total global Scope 1 activity in Metric Tonnes CO2-e emitted: 96,264
- Total global Scope 2 activity in metric tonnes CO2-e emitted: 182,391
