Corporate Responsibility

When we continuously improve our customer experience, our business thrives, and we enable our customers to live a good life.

Introduction

At its core, insurance represents a collaborative approach to risk, and Allstate is the resource broker for this collaboration. By accurately and efficiently assessing and managing claims, we continue to be a force for good and maintain the trust of our valued customers. By innovating, we ensure our business successfully maneuvers the rapid industry transitions due to advances in information technology.

Knowledge Management

The world’s workforce is changing and the learning and training preferences of millennials are different from past generations. They prefer digital, centralized media. To support our evolving claims team, in 2016, Allstate began implementing our knowledge management system. We customized and designed the system to provide claims employees with uniform information. This includes centralized training content that is palatable to a wide-range of employees. Today, our claims process is increasingly streamlined and consistent. This strategy also:

• Increases employee efficiency, improving customer experience
• Improves the quality of claims handling
• Reduces informal training time
• Reduces redundant resources and effort needed to create, distribute and maintain

We know the customer experience begins and ends with our employees. Our team’s capability to deliver high quality and consistent claims experiences is at the core of driving high customer satisfaction.

Continuous Improvement

Continuous Improvement (CI) is a management system that improves customer experience, agency owner and staff experience and business outcomes by empowering employees to advance their work methodology. The CI deployments have generated excitement and significant impact around employee engagement, customer experience and efficiency dimensions. To date, we have implemented CI in all claims express operations. By year-end 2016, all auto field operations will participate in the CI environment, totaling more than 35 claims offices.

Efforts are underway to deploy a systemic CI model across the remaining claims lines of business. This approach will be piloted at the senior leadership level and include a national deployment strategy and a root-cause problem-solving database. Our goal is to complete the implementation of CI across all claims offices by the end of 2017.

Preventative Home Care

Many of us know of preventative healthcare. In that same vein, Allstate is helping homeowners consider preventative care of their homes. Our Home Checkup program gives our customers an in-depth assessment of their home to help them better understand their risks and provide recommendations of maintenance measures. We tailor the assessment, conducted onsite by an Allstate inspector, to the interests and home care goals of each customer.

Simplifying the Claims Process

We work hard to ensure our claims process is as simple and stress free as possible. By continuously improving our claims process, we drive customer retention and satisfaction. In 2014, we undertook an assessment of our claims process called End 2 End. The assessment found customers prefer interacting with one claims professional throughout the process rather than multiple people. In response, Allstate now assigns a claim owner to each case. The owner is responsible for the entirety of the claims process, including:

• Reaching an agreement on liability with the at-fault insurance carrier and expediting the customer deductible upon agreement
• Informing insureds and claimants when supplemental damage to their vehicles is identified and explaining the impact to repair time and rental car extension
• Incorporating the explanation of medical payment or personal injury protection coverage and process as part of the initial loss fact-gathering contact rather than having a medical specialist perform the explanation

Results of the trial show the average number of claims professionals our customers encountered dropped from 4.5 to 2.1 in 2014. In 2015, we began migrating all of our claims processes to this new model, including our property claims.

Beyond the clear benefits to our customers, we found this process improved our claims handlers’ familiarity with the claims process as a whole. Further, it improves their ability to establish personal relationships with our customers because of their increased interaction. In light of this success, we are committing more resources to continuous improvement in this area.

Quantitative Research and Analytics

Allstate’s quantitative research and data analytics team works to leverage our data management system, NextGen, to identify and prevent risks to our customers. While this system provides our workforce with actionable tasks, the team maximizes its value by applying their models to create milestones, making our risk identification even more proactive.

We also use data analytics to predict and identify fraudulent claims. To this end, we continuously update sophisticated mathematical models developed by our Special Investigation Unit (SIU). In 2015, we submitted 23 civil actions against fraud perpetrators, seeking damages of nearly $69 million.

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Improving Access to Information

The accessibility and quality of data continues to improve across the business landscape. In order to capitalize on this megatrend, we created several initiatives that increase our connectivity with customers.

• Connected Home: We offer customer discounts for installing monitoring devices for intruder alarms, smoke detection, carbon monoxide leaks, lighting, temperature level and appliance usage.

• The Allstate Digital Locker®: To expedite claims in the case of an event, Allstate developed The Allstate Digital Locker application, available by phone or internet connection, which allows users to keep a digital list of their personal property.

• Drivewise: Using a mobile app or plug-in device, we can inform our customers when they are demonstrating risky driving behavior. More recently, we modified the program to give cash back to customers with safe driving habits.

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Technology

Advances in technology continue to open doors to previously unimaginable services. Surveys indicate that our customers are looking for more control of their insurance experience through digital media. By developing the technologies involved in the claims process, we empower our customers to contact us with ease.

Self-service
While Allstate will always maintain options for a personal insurance experience, many of our customers voice a strong interest in self-service options. To meet the rising demand for self-service insurance, Allstate is improving our online claims experience. Already, we are revamping our online presence by streamlining the process of filing and checking the status of claims.

Virtual Interactions
The rise of audio-visual communication presents Allstate with tremendous opportunities to improve the quality and experience of our claims process. We currently utilize several applications to virtually connect with our customers and vendors to collaborate during the claim’s life cycle including the assessment of damage. We are actively testing new drone technology to potentially deploy to better service our customers, for example, in flooded or hurricane impacted areas where access is limited.

QuickFoto
We have an app for that. QuickFoto allows our customers to upload photos of their auto accidents. Using these photos, we can rapidly assess damages and complete the claims process, often within a few days.

Fast Mobile e-Payment
Our Fast Mobile e-Payment system, requiring only an email address or mobile phone number, is the new industry standard for quick and stress-free claims payment. This new digital payment process dramatically cuts wait time and paper waste. Fast Mobile e-payment is faster than electronic fund transfers and is available across the U.S. It works with any bank for all Allstate auto and property insurance claims that have a single payee.

Allstate leverages our resources as an institutional investor to be a force for good.

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Introduction

With over $77.8 billion in assets, Allstate’s investment decisions represent a critical part of our corporate footprint. How we choose to invest our assets affects our employees, customers and investors. By investing in high-performance portfolios, our employees enjoy financial stability, we protect our ability to pay the claims of our customers and we attract further investment.

In 2015, we set aside approximately $772 million of our investments to invest in portfolios that are both high performance and socially responsible. Our socially responsible portfolios not only provide Allstate with strong returns, but also often yield positive externalities, the financial impacts of which are difficult to quantify. We provide the best value to our shareholders by taking a competitive and holistic approach to investing.

Last year, our $772 million in sustainable investments included:

• $51 million in our Socially Responsible Investments portfolio
• $491 million in a low-income-housing tax credit (LIHTC) portfolio
• $230 million in renewable energy

Nurturing Diverse Talent in Asset Management

The number of multicultural and diverse households continues to grow, shifting the United States toward a nation where minorities compose a majority of the population. Despite research showing that diverse investing teams consistently outperform less diverse investing teams, women and minorities are still underrepresented in the private equity and real estate private equity investment sectors. Allstate works to secure the continuity of our workforce through a variety of diversity initiatives (to read more about inclusive diversity at Allstate, click here). To ensure our investment team demonstrates superior performance and helps bridge the underrepresentation gap, Allstate created the Diversity Emerging Managers program.

The goal of Allstate’s Diversity Emerging Manager program is to identify the next generation of women and minority investment managers. To do this, we collaborate with Grosvenor Capital Management to select women- and minority-owned firms that demonstrate excellence to participate in the program. Of the $100 million allocated to the program, Allstate has committed $65 million toward participating firms. We carefully assess the returns on the funds we commit for investment.

In addition to our financial commitment, the participating firms also receive development training from Grosvenor Capital Management that covers a wide range of topics related to operating an asset management firm, including management, finance and marketing.

Impact Community Capital

Impact Community Capital (ICC) was founded to create a bridge between low-income communities in need of investment and insurance companies with a need to entrust their policyholders’ capital in impactful and profitable investments. Since its inception, the sum of ICC’s socially responsible investments in underserved communities has grown to more than $1 billion. The ICC invests in affordable housing, healthcare and economic development.

Since 2000, Allstate has helped ICC increase its ability to finance affordable housing by investing in securitized loans packaged by its Impact Community Impact Loan (Impact CIL) affiliate. Impact CIL purchases mortgage loans on newly constructed or rehabilitated affordable multifamily housing properties, most of which are eligible for Low Income Housing Tax Credits (LIHTC). When the mortgage pool reaches an optimal size, the loans are securitized. Under the Community Impact Loan Program, Impact CIL has provided more than $800 million of financing on project loans comprising more than 33,000 low-income housing units.

The Perspectives Charter Schools and Allstate Partnership

In 2010, Allstate Investments began hosting students from Perspectives Charter School, a school on the South Side of Chicago, at our Northbrook, IL headquarters. Over the course of the five-day internship, up to 20 high school juniors are exposed to the broad range of professions at Allstate, with a focus on investing, which is a professional field often overlooked by high school students. This program enables Allstate to deepen our relationship with the Chicago community.

The program introduces the students to investment concepts and what it means to trade for a large institutional investor. Through our Investing Challenge, the students apply these investment concepts by selecting stocks, tracking performance and presenting the results to the Investment Department. The internship also provides the students with opportunities to meet diverse employees from various disciplines across the company, including marketing, legal, technology, agency ownership, communications and human resources. We emphasize to the students the need to plan for their career through a strong focus on their education and networking, and to plan for retirement at an early age–both of which help to achieve long-term financial health. We are proud of this unique partnership and continue to expand the reach and depth of programming each year.

Integrity is central to our business. We believe that doing what’s best for our customers begins and ends with operating by only the highest ethical principles.

Introduction

Allstate’s success depends on our collective culture of ethics. We are proud of our reputation, which we have built on the sturdiest of foundations: integrity, honesty, caring, accountability and superior performance.

Conducting business with integrity doesn’t just attract new customers and benefit our bottom line—it engages our workforce. We received an 82 percent favorable score (considered “exceptional” performance) on our 2015 VOICE survey for our environment of trust. Allstate’s environment of trust is one of our nine most significant drivers of engagement, retention and satisfaction, according to the survey.

Code of Ethics

Allstate’s Code of Ethics outlines the values that are the core of who we are and what we do. Our values define our culture and our beliefs, and set forth expectations for how we conduct our work. In addition to our Code of Ethics, we have policies for:

• Anticorruption/bribery
• Antitrust/competition
• Confidential information
• Conflicts of interest
• Data privacy (e.g., employees, customers, consumers)
• Diversity/discrimination/equal employment opportunity
• Fair dealing (fair business practices)
• Fair employment
• Gifts and entertainment
• Information security
• Insider trading
• Intellectual property
• Misconduct investigations
• Non-retaliation
• Political contributions, activities and lobbying
• Procurement integrity/dealing with suppliers/supply chain oversight
• Protecting company assets
• Records management and retention
• Social media
• Workplace harassment
• Workplace health and safety

Governance

Allstate has a robust governance structure for ethics and compliance. In 2015, we had approximately 400 Allstaters across the enterprise focusing on ethics and compliance initiatives. Of these, our Chief Ethics and Compliance Officer is the most senior individual overseeing our ethics and compliance program. In this role, our CECO is responsible for the company’s code of conduct; ethics and compliance budgeting; the hiring of related positions; and, to a lesser extent, procurement practices. The CECO meets with the Board of Directors twice per year and reports on the company’s performance and initiatives.

We also house an Internal Controls Committee that is cross-functional and includes managers and executives. The committee convenes on a quarterly basis and discusses a wide variety of management topics related to ethics and compliance, including performance, education, risk and culture.

Ethics and Compliance Risk Assessment
We conduct a highly collaborative risk assessment on an annual basis. Through this assessment, we assess risks related to:

• Anticorruption/bribery
• Antitrust/competition
• Conflicts of interest
• Data privacy laws and regulations relevant to employee, customer, or consumer data
• Financial integrity and fraud
• Gifts and entertainment
• Information technology security
• Insider trading
• Money laundering
• Political contributions, activities and lobbying
• Procurement integrity/dealing with suppliers/supply chain oversight

Training and Communication

Board of Directors
Allstate’s culture of integrity begins with our most senior leaders. Our Board of Directors receives specialized ethics and decision-making education. In addition, we provide them with training on topics such as insider trading, cyber security, conflicts of interest and regulatory developments.

Employees
We distribute our Code of Ethics to all of our employees along with a formally documented ethics and compliance education curriculum. We conduct ethics and compliance training both as a standard part of the onboarding process and on an annual basis, and monitor its effectiveness through a variety of internal measures. As of 2015, 100 percent of our employees had completed ethics and compliance training—a condition of employment at Allstate.

In addition to Code of Ethics training, select employees undergo risk-specific training that addresses topics such as anticorruption, conflicts of interest, data privacy, equal opportunity, insider trading, procurement, social media, workplace harassment and money laundering.

Managers
All of our managers undergo targeted training with respect to their special responsibilities toward compliance and ethics.

We focus our manager training on creating an environment where employees feel comfortable speaking up when they observe unethical behavior, handling reports, and preventing retaliation. To measure the impact of our training, we:

• Document manager feedback
• Track misconduct
• Record the frequency with which the Code of Ethics is downloaded
• Conduct an employee survey annually to determine the strength of Allstate’s culture of ethics

Our culture of ethics survey is one of the primary drivers of feedback within our ethics and compliance initiatives. After we compile the results, the CECO presents them to each senior leader at a face-to-face meeting. At this meeting, we identify areas of strength and of opportunity, and many of our business areas develop their own customized solutions to address them.

Recognition

Allstate was named as a 2015 and 2016 World’s Most Ethical Company® by the Ethisphere Institute, a global leader in defining and advancing the standards of ethical business practices. The “World’s Most Ethical Companies” designation recognizes those organizations that significantly influence the way business is conducted by fostering a culture of ethics and transparency at every level of the company. To qualify, companies are scored in five categories, including ethics and compliance; corporate citizenship and responsibility; a culture of ethics; governance and leadership; and innovation and reputation.

Reporting Concerns

We encourage our employees to report any activity they observe or experience that causes concern. Should an employee decide to report a concern, they can contact their manager, another manager, or a Human Resources representative. Additionally, they can utilize our companywide reporting process, available 24/7, via phone or web. They also can choose to remain anonymous if the law permits. In 2015, approximately 44 percent of our employees who filed reports chose to do so anonymously.

After an employee files a report, it is tracked within our established case management system. The system records and logs reports and related investigations regardless of how the report was originally made.

Allstate policy and the Code of Ethics prohibit any form of retaliation for reporting a workplace or ethical concern.