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Allstate’s Wilson Names Head of Biggest Insurance Unit to Increase Profit

Published: February 28, 2012 | 8:55 am
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Allstate Corp. (ALL) Chief Executive Officer Thomas Wilson picked a new head for the insurer’s biggest unit, home and auto coverage, as he seeks to improve profit at the residential business.
Matt Winter was named president of the unit, Northbrook, Illinois-based Allstate said yesterday in a statement. Formerly head of the life-insurance business, Winter will be succeeded in that role by Don Civgin, the chief financial officer. Steve Shebik will become CFO. Mark LaNeve, a senior executive vice president whose duties were expanded last year to oversee agency operations, resigned for personal reasons, the company said.
Wilson, 54, has been shifting senior executives since the departure in July of Joseph Lacher, formerly head of home and auto insurance. Wilson said in November that he expanded the responsibilities of LaNeve and Winter, who was given the task of overseeing property-casualty claims and risk management.
“We’ve been nervous about management for a while, simply because it seems to be less than perfectly stable,” Meyer Shields, an analyst at Stifel Nicolaus & Co. who advises clients to hold the stock, said in a phone interview. “I think that the question of stability is still there.”
Allstate, the biggest publicly traded auto and home insurer, was little changed at $31.37 yesterday in New York. It has declined less than 1 percent in the past year, compared with the 11 percent drop in the 24-company KBW Insurance Index.
Brian Faith, a spokesman for the insurer, declined to comment. Allstate is “confident in the abilities of our strong leadership team,” Wilson said in the statement.

Unacceptable Profits

Wilson has been raising rates for residential coverage and said in December that the homeowners business hasn’t generated acceptable profits for “some time.” Results were hurt last year as Allstate faced claims related to tornadoes in the second quarter and Hurricane Irene in August.
Allstate’s property-and-liability unit, which sells home and auto coverage, generated more than 80 percent of the insurer’s revenue last year. The life-insurance division, Allstate Financial, accounted for about 16 percent of revenue. Allstate had about $32.7 billion in revenue in 2011.
The management changes may stretch the senior leadership team as Allstate seeks to improve the profitability of its home- insurance division, refocus life-insurance operations and integrate Esurance, an online seller of car coverage, said Mark Dwelle, an analyst with RBC Capital Markets.
“All of those require different skills,” he said in a phone interview yesterday. “Each one of them individually was a pretty big job.” He rates Allstate “sector perform.”

Shifted Focus

Winter helped shift the focus of the life division to underwritten products sold at Allstate agencies and through employers, according to the statement. The insurer has stopped selling its own variable and fixed annuities.
Allstate has been losing auto-insurance customers as drivers buy coverage on the Internet rather than from agents. The insurer completed the acquisition of Esurance in October to compete with direct-to-consumer sellers Progressive Corp. and Berkshire Hathaway Inc.’s Geico unit.
Allstate also announced yesterday that Steve Verney, chief risk officer, kept that title and was promoted to the senior leadership team, reporting to Wilson.

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