Allstate Announces Charges, Settlement
NU Online News Service, 12:33 p.m. EST?The Allstate Corporation in Northbrook, Ill. announced today that it recorded $70 million in after?tax restructuring expenses, or 10 cents per share, and a $38 million after-tax charge of 5 cents per share related to the settlement of a lawsuit in Georgia.
The restructuring expenses, roughly $107 million before taxes, relate primarily to a 2001 initiative to realign the company's claim offices to fewer, larger office locations and to redesign its Customer Information Centers and other back-office operations.
The expenses also reflect amounts related to pension benefit payments made to agents in connection with the reorganization of employee agents to a single exclusive agency independent contractor program. That program was announced in 1999.
The company said it estimates that the annual expense savings related to these programs, once they are completed, will be $140 million on a pre-tax basis.
The lawsuit settlement, for which Allstate recorded a $59 million reserve before taxes, relates to a Georgia class action, Earl, et. al. v. Allstate.
The case involves claims that Allstate Insurance Co. and Allstate Indemnity Co. customers in Georgia over the last six years were entitled to payment for inherent loss of market value after their vehicles were damaged in accidents.
Allstate said the settlement was reached the Georgia Supreme Court ruled against State Farm on Nov. 28, 2001 in a similar class action.
Allstate also said that since 1998 it has been implementing policy language in a majority of states reaffirming that its collision and comprehensive coverages do not include diminished value claims.
The company also disclosed that it continues to litigate several diminished value class actions in other states, including one Illinois case in which a multi-state class has been certified.
Allstate will release its complete financial results for the fourth quarter of 2001 on Feb. 6.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
