Mr. Liddy has been a vocal leader in the campaign to establish a national catastrophe fund–an idea that has drawn much fire, including from many of his peers within the insurance industry.

However, Mr. Wilson–who joined Allstate in 1995 as vice president of finance and was elected chief financial officer later that year–made it clear he will not shy away from the fight to secure facilities to back up private carriers in a natural disaster.

In an interview during a recent trip to the nation's capital, Mr. Wilson said it is essential that federal and state authorities deal with catastrophes “prospectively rather than retroactively.”

While he concedes many possible approaches to the problem have been suggested, Allstate has put its money where its mouth is by helping create ProtectingAmerica.org last fall to push for a series of state catastrophe funds, supported by a national backstop.

“If somebody has a different bill with a different federal solution that is satisfactory to Allstate, we'll consider it,” he said. “The way you pay money–who pays the money–is all based on politics, not necessarily on an economic and rational solution.”

Whatever solution is devised, he added, “someone is going to have to deal with this issue looking out their front windshield rather than their rear-view mirror.”

Absent any comprehensive solution, he warned, the risk of catastrophe will continue “going up, with coverage going down. That is not a good thing because that gap is something the consumer bears.”

This issue is critical to the economy, he added, “because one-third of America's net worth is tied up in homes.”

“We believe private insurance plays a role at some level, so there is some economic rationality, but we think there should be state catastrophe funds–adequately funded, but state-sponsored,” he said. “Above that–because some events are bigger than any state can handle–we think a federally-sponsored, but privately-funded catastrophe fund is important. We think that is a better deal for consumers.”

The disaster reserve should be funded over time, he said. State funds should go out and collect premiums. Whenever there is a major catastrophe, they should pay the claims out of that fund–but if that source isn't adequate, “our proposal is that a government-sponsored entity should borrow the money, and it should be paid back over time from future premiums,” Mr. Wilson said.

Although the two developments weren't directly related, according to Allstate, the carrier has taken heat for reducing its presence in hurricane-prone areas of Florida and Long Island, N.Y., while at the same time warning that without government-backed catastrophe funds, carriers would withdraw from exposed markets.

Rather than using its market power as leverage to push its political agenda, Allstate cites the huge hurricane losses it endured over the past two years, as well as a dangerous overconcentration of exposure in catastrophe-prone areas, as the rational cause behind its decision to retrench.

Mr. Wilson observed that in the rush to win continued federal involvement in terrorism insurance, less emphasis is being placed on a government role in covering weather-related catastrophes.

“It's interesting to me how we spend so much time and effort dealing with terrorism, and not as much time on natural disasters, when, in fact, the losses from natural disasters over the last five years have been far larger than the losses from terrorism,” Mr. Wilson said.

“That is not to say losses from terrorism aren't a terrible thing, but losses of homes and businesses are equally important,” he added.

Looking to build on the company's recent growth and financial success, Allstate's incoming CEO will emphasize technology to differentiate its products, eliminate “one-size-fits-all” underwriting and improve the customer experience.

The “good hands people” at Allstate will also continue to leverage its “great brand,” according to Mr. Wilson, who cited the carrier's omnipresent advertising message as one of its greatest strengths.

When asked if he is optimistic his new team will be able to continue to keep the business on the upward path devised by Mr. Liddy, Mr. Wilson said: “I think we can grow the business, absolutely. The way we will do it is give the best price in the market, through product differentiation and through customer satisfaction.”

Allstate is emerging as a star in the eyes of analysts. Indeed, Allstate's board announced its succession decision just hours after a brokerage firm upgraded the stock to a buy and raised earnings estimates.

Meyer Shields and Michael Phillips, analysts at Stifel Nicolaus & Company, said at the time that Allstate is expected to have “sustained underwriting outperformance” in the private passenger auto segment during the next several years.

“We think that Allstate is a much smarter company than many investors give it credit for, and that its peer-low [price/earnings] multiple reflects too much hurricane fear and not enough recognition of its very impressive capabilities,” the two analysts said in their report.

When asked how he has redefined the company, Mr. Wilson said, “A lot of it is from being smarter at how we price. We use data better, and our motto is: 'The right price for every customer.'”

He explained that under prior regimes, Allstate would put its customers in wide categories–”broader age brackets, broader car-price brackets, broader driving brackets.” But now, he noted, Allstate is doing a far better job “pricing each customer appropriately.”

Mr. Wilson said the company's goals in underwriting are: “Do it efficiently, the right amount, not too little, not too much,” adding that he wants the same approach used for customer service–”not too little, not too much.”

Allstate also streamlined the claims component of the business, he said, noting that “four years ago, we sought operational excellence,” and pointing out that the carrier formerly had 220 claims offices, but has reduced that to 120.

with Allstate Logo: