Allstate has quietly laid off more than 500 employees this year, most of those eliminated positions casualties of “a more efficient system” that lets customers send in photos of their damaged vehicles.
A spokesman for the Northbrook-based insurer said those cuts were nationwide but declined to comment on specifics, including when the layoffs would be completed.
The company’s QuickFoto Claim feature, which lets customers snap photos of damage after accidents and start the claims process, is becoming a dominant method for inspection, Allstate President Matt Winter said during an Aug. 2 earnings call with investors. It now takes less than a day to get a vehicle inspected and a damage estimate to the policyholder, a process that used to take about a week.
This, along with drones that assess roof damage, a new immediate payment method and other tech, has resulted in “a more efficient system,” Winter said.
In the past, “there was a lot of dead time, unproductive time as adjusters drove around” to cars and body shops for estimates, Winter said. “We looked at that and realized emerging technologies, data and analytics could rectify that and take some of the inefficiency out of the system.”
Allstate is phasing out its drive-in inspection stations, where customers could take a damaged car for assessment. Though it is unclear how many of those sites have been closed, Chairman and CEO Thomas Wilson said during the earnings call that the company has almost 940 drive-ins.
The closures and layoffs have come at a cost.
Allstate spent $53 million from April through June on restructuring and related charges, according to Securities and Exchange Commission filings. Much of that went to severance packages and shutdown costs, Wilson said. The company spent only $11 million on restructuring during the same period in 2016.
Some of that cost this year also has gone toward “realigning certain departments” for Allstate’s Esurance and Encompass brands, according to SEC filings.
Esurance, which focuses on an online and mobile experience, cut about 100 positions nationwide this year. The last day for most of the employees was May 28, Esurance spokeswoman Dolleen Cross said.
“The changes will ensure we’re structured appropriately with the right resources at the right scale,” Cross said in an emailed statement. “By reducing operational costs, our customers will continue receiving the competitive rates and savings they’ve come to expect from Esurance.”
Most of those layoffs were concentrated in three of Esurance’s 17 offices: one in Sioux Falls, S.D., and two in California, Cross said.
Esurance employs about 3,300 people, she said. That number is included in Allstate’s total employee count, which is about 43,000, spokesman Justin Herndon confirmed.
Company representatives wouldn’t say whether the 100 Esurance layoffs were included in Allstate’s count of 500 terminated employees.
Herndon declined to comment further on Encompass, a personal property and casualty insurance brand. During the earnings call, John Griek, director of investment relations, said, “The business has gotten smaller as we exit unprofitable markets and raise prices,” though there are plans for growth.
The expansion of QuickFoto Claim is also expected to create positions, Herndon said. He declined to comment on a number of new jobs.
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