Allstate defends its move

THE ANCIENT ROMANS had a tradition: Whenever they constructed an arch, the engineer assumed accountability for his work in the most profound way possible -- by standing under the arch as the capstone was hoisted into place.

At Allstate, we don’t build coliseums, we insure the homes and vehicles of 1.5 million households in California and 17 million customers across the country. But our agents and employees take their responsibility just as seriously. We hold ourselves to a standard of performance that says simply and clearly that we want our company to remain in a strong position to help protect those customers.

Allstate recently announced that we will no longer write new homeowner and landlord package policies in California, though we will continue to cover our current customers and this decision will not affect the renewal of their policies.

Indeed, Allstate is taking this action because of how many Californians we already insure. We are making sure that we have the financial strength to serve our customers in California and across the country if a major natural disaster occurs. A movie theater shouldn’t sell more tickets than seats; a hotel shouldn’t overbook its rooms. We are carefully managing how many homeowner policies we acquire in catastrophe-prone areas around the country, including California, so we can meet our customers’ needs in the years ahead. That’s prudent, that’s responsible, that’s accountability.

Across the country, more homes are being built in hazard-prone areas such as coastal and woodland tracts, and the cost to rebuild homes has increased dramatically. Meanwhile, changing climate patterns may be fueling storms and fires; indeed, many Southern California fire agencies now face year-round fire conditions.

It is shortsighted to look at one year of profits -- as our critics have -- and say our actions are unnecessary. It was just two years ago that our company incurred more than $5 billion in catastrophe-related costs as we helped our customers rebuild their lives after hurricanes Katrina and Rita and other disasters.

More than 1,200 Allstate agency owners and 2,400 Allstate employees call California home, and they are committed to the state. We’ve developed a program for new customers in California to find homeowner policies with companies not affiliated with Allstate while still working with our agencies for other insurance products. As market conditions change, we will reassess our situation to determine if we can offer new polices in this market in the future.

Beyond this commitment to Californians, our agents and employees across the state are, as always, available to answer questions. If and when a disaster strikes, they will be on the front line, going the extra mile in a time of need.

There undoubtedly will be some voices out there attacking the prudent steps we are taking. We can only imagine what those voices would be saying if California suffered a major wildfire at the same time a hurricane struck the Atlantic coast and insurers weren’t financially strong enough to help protect their customers. Our first responsibility has to be to our existing homeowner policy customers -- including 900,000 of them in California.

Our decision to not write any new homeowner insurance in this state was not taken lightly or cavalierly. And we hope that Californians understand our actions in light of our shared future in the state. It was done as part of a larger effort to ensure a healthy company. It’s our responsibility to prepare for the inevitable challenges that lie ahead.

Our business is about helping put lives back together and getting families back on their feet. We’re taking steps now to ensure that we are in a strong position to help protect customers in California and across the country. In short, we’re holding ourselves accountable.