Risk Management

An institutional commitment to
understanding risk

Allstate manages enterprise risk under an integrated Enterprise Risk and Return Management (ERRM) framework with risk-return principles, governance and analytics. This framework provides an enterprise view of risks and opportunities and is used by senior leaders and business managers to drive strategic and business decisions. Our qualitative risk-return principles define how we operate and guide decision-making around risk and return. These principles are built around three key operating components: maintaining our strong foundation of stakeholder trust and financial strength, building strategic value and optimizing return per unit of risk.

Our Enterprise Risk and Return Management governance includes an executive management committee structure, Board oversight and chief risk officers (‘CROs’).

Our Enterprise Risk and Return Council (ERRC) establishes risk-return targets, determines economic capital levels, and directs integrated strategies and actions from an enterprise perspective. The ERRC is a senior management committee appointed by the CEO and chaired by the chief risk officer (CRO). ERRC members include the CEO, business unit presidents, enterprise and business unit CROs and chief financial officers, the general counsel and the treasurer. The ERRC convenes monthly to assess and manage the various risks and opportunities faced by the company, which can include topics such as regulatory change, cybersecurity, macroeconomic stability, investment markets, and risks affected by climate change, such as severe weather events.

The Board oversees Allstate’s business and management, including risk and return management, and regularly reviews:

  • Overall business strategy
  • Business plans for Allstate’s property and casualty business, life insurance and voluntary accident and health insurance businesses, and Allstate’s investment portfolio
  • Liquidity and use of capital
  • Legal, regulatory and legislative issues

The Board has overall responsibility for oversight of management’s design and implementation of ERRM. Risk and Return Committee oversight focuses on the risk and return position of the company, and Audit Committee oversight focuses on risk assessment and risk management policies, including the effectiveness of management’s control environment.

CROs are appointed for the enterprise and for Allstate Protection, Allstate Financial and Allstate Investments. Collectively, the CROs create an integrated approach to risk and return management to ensure risk management practices and strategies are aligned with Allstate’s overall enterprise objectives.

Read more about our risk-management systems and the risk factors identified in 2013 in our Annual Report or in our Risk and Return and Audit Committee Charters.

Technology helps us predict the unexpected

Allstate’s risk management capabilities protect our enterprise, but they also provide additional security to our customers. We gather extensive data on the types of claims policyholders file and the risks they face. We use that data to provide value-added information to our customers. For instance, after winter storms in the Midwest and on the Eastern Seaboard, we proactively reached out to customers in those regions about how to mitigate ice damming on snow-covered roofs. We also send customized alerts to customers when storms are approaching, along with tips about how to minimize damage to their homes and vehicles.

Education enables customers to protect themselves

We help customers limit risk by educating them about how to prepare for and protect against common mishaps and risks. From what to do when a tree falls on a car, to how to prepare a teenager for the responsibilities of driving, to what regular maintenance home and vehicle owners should perform, our “Tools and Resources” website has the information customers need.

Our repair network helps ensure work is done right the first time

Through our Good Hands Repair Network, Allstate helps policyholders find capable, qualified vendors to repair their vehicles. In 2013, we began expanding this program to cover home repairs. Customers can use our directory even when they don’t have a claim, but simply need a repair referral.

A new policy statement on climate change risk

Climate change poses significant risks to Allstate’s businesses, communities and the world at large. In 2014, with the guidance of its Sustainability Leadership Committee and external NGO partners, Allstate updated a comprehensive climate change policy statement that outlines the company’s approach toward climate change, its progress in mitigating its climate change impact and its goals for the future. The full statement will be available soon.

ECC Monitor: OK