If the stock price deteriorates, Allstate will definitively be in play....I truly feel that is the ultimate end game for this leadership team....
The only thing saving it right now as an independent company is the current market cap ....making any takeover expensive currently..
I think this will come down to the retention number...watch it closely...
If that retention number continues to be pressured, it will ripple down the stock...
And if the stock gets low enough for a large insurance company or even an auto company looking to sell insurance in house.....WATCH OUT!!!!
Someone will come in, keep the parts they want and sell off the rest...
As already said, the perfect legacy for this overpaid leadership team...
2 replies (most recent on top)
It borders on mo–nic for anyone to say, or even imply, senior leadership wants to destroy the company in order to sell it, and that this is leadership's " end game ". Seriously? Still don't get it! Its much worse than that; senior leadership actually thinks this strategy will allow them to leapfrog the competition. Not merely catchup, but get ahead of Geico et al. Its a scorched earth strategy ( peddled to them by Mc Kinnsey no doubt ) that puts huge value on direct sales, technology and expense savings through offshoring while simultaneously putting limited value on the EA, customer experience, employee morale and retention. Allstate senior leadership has finally acknowledged that insurance is a commodity and only price is a true differentiator. Make no mistake, TW has more than enough money; but a huge ego. He wants to win; but he is terrible at strategy. Current Allstate Leadership is where arrogance and incompetence intersect, a very destructive combination.
Retention is definitely something to keep an eye on. However, Tom Wilson will have the luxury of another record "Pandemic" profit quarter. Moreover, he will be able to hide behind the policy growth of the Nat Gen purchase. This is all be exasperated by the Wall Street analysts refusal to challenge the "Northbrook Hatchett Crew" with any difficult questions in regards to retention. Crain's is the only outlet that seems to challenge Allstate leadership. Moreover, the reduction of expense ratio will work in Wilson's favor. However, Allstate's policy pricing will start to put pressure on the Nat Gen retention also. Independent agents do NOT have to put up with the erratic price instability that Allstate has installed. Q2 earnings and retention will club Tom Wilson like a baby seal more!