Allstate Insurance Company Closes San Jose Office, Consolidating Operations to Sacramento

The Allstate Insurance Company has made the difficult decision to close its San Jose office, effective immediately, and transfer operations to its Sacramento office. This consolidation will result in the elimination of approximately 50 positions, a move that the company believes is necessary to adapt to the changing regulatory landscape and increased risk in the California insurance market.

Key Takeaways:

• The closure of the San Jose office will affect around 50 employees, but will not impact agent, sales management, or claims positions.
• The consolidation is a result of the lingering effects of Proposition 103 and the company's exposure in earthquake-prone areas, which have hindered its ability to grow and compete in the California market.
• Allstate believes that the California insurance market has become overly regulated, leading to a lack of velocity and a fear of taking on new customers.
• The company is committed to the California market and plans to continue serving its Northern California customers as before.
• The consolidation is expected to cut the company's annual expenses by approximately $2-3 million.
• The San Jose office was established in September 1988.
• John Blakely, Regional Vice President, San Jose, stated that the company is hopeful for legislative relief and new leadership in the California Department of Insurance to alleviate the regulatory burden.

Statistics:

• 50 positions will be eliminated due to the consolidation.
• The consolidation is expected to cut the company's annual expenses by approximately $2-3 million.
• The San Jose office was established in September 1988.
• Allstate plans to continue serving its Northern California customers as before.

Sources:

• "Allstate Insurance Company Closes San Jose Office, Consolidating Operations to Sacramento" (PRNewswire, January 11, 1995)
• Contact: John Violet (San Jose office) 408-452-6651, Denny Shunta (Sacramento office) 916-852-4830