Allstate, a $40 billion company that has a P/E ratio of less than 8, demonstrated today how it keeps it financials looking so healthy.
The giant insurer announced that it would no longer write new homeowners policies in the entire state of California, effective July 1. Given that California is by far the nation's largest state, one knows the decision wasn't taken lightly, but cutting off the state is a drastic step.
Allstate, which insures nearly 20 million homes, had already taken similar action in hurricane haven Florida, as well as several other states where loss data or legal and regulatory issues made a compelling business case.
The company is free, of course, to sell its products where it likes, but one wonders how the Allstate agency owners in California are feeling this Friday morning. Sure, there are cars and life and all sorts of other insurance products to sell, but the company just cut off several tens of millions of people from using its homeowner product in the future.
They won't be in good hands. They'll be in someone else's hands
Labels: Allstate, California, insurance
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