The Allstate Corporation (ALL) Earnings Call Transcript & Summary

Welcome, everyone. I'm Tom Wilson, Chair, President and Chief Executive Officer of Allstate. On behalf of Allstate's Board of Directors, our senior leadership team and Allstaters, welcome. Thank you for joining us for our meeting today. We'll begin by -- let me just make sure I can -- I want to make sure that before I continue on, are we clear that -- can everybody hear everything all right? I just want to -- sometimes you talk on and we want to make sure people don't get it. So they don't hear. Could somebody just let me know that we're -- in fact, you can hear it all?

Clear, Mr. Wilson. Please go ahead.

Okay. okay. Thank you. So -- okay. So I have our -- we have our talented Board of Directors here. They have a very diverse set of skills and experiences that help support Allstate's strategy and also enable very effective oversight of our execution. We also have a world-class leadership team that's with us here today. They have their strategic vision to guide where the business will go. And then we've run the business really well with precision each and every day. Rhonda Ferguson, who is Allstate's Chief Legal Officer, our General Counsel and our Secretary of the Corporation will act as secretary, of course, of this meeting. This is our second annual virtual stockholders' meeting. And additionally, of course, we did this to keep everyone safe during the pandemic. What we learned is that this format actually leads to increased participation and better dissemination of the results. So let's get started. Some of my comments today will include forward-looking statements. The actual results may differ materially from those that we talk about today. So please refer to our 2020 form 10-K and all of the other public documents we make available so you have all the relevant information in making your investment decisions. Mr. Charles Zade of the American Election Services, LLC is on the line with us today, and the Board of Directors has appointed Mr. Zade to act as our independent inspector of election. Scott Shirk, Henry Phillips and Diane Craanen of Deloitte & Touche are also participating since they're responsible for the Allstate audit. Now let's go through the agenda. First, we'll present an act on 4 proposals. There will be an opportunity for shareholders to ask questions or make comments about the proposals after all of them are presented. So we'll present the proposals first, then we'll have a time where you can make comments or ask questions about those proposals. Then we'll vote on those proposals. When the preliminary vote is reported, then we'll conclude the official stockholders' meeting. And after the meeting, then we'll report on the state of your company. And there'll be time for general questions and comments at that point that are not related to the 4 proposals being acted on today. Please note that you can submit your questions and vote your shares on the virtual meeting site. We will be using the rules of conduct for the meeting that are included on the virtual meeting platform. And that just helps us ensure as many topics as possible are covered and we're respectful of your time. In the event of a technology failure or a disruption that interferes with the meeting, we might adjourn, recess or expedite the meeting. Updates regarding reconvening the annual meeting if it becomes necessary will be available on our Investor Relations website. Ms. Ferguson has confirmed a quorum is present and we're duly convened for the purposes of acting on the items of business that are properly before this meeting. As a result, I now declare the polls are open for each of the items of business listed in the proxy statement for consideration at today's meeting. Now if you've already voted, you don't need to vote again at this meeting, unless, of course, you wish to change your vote. I'll present the first 3 items to be acted upon, and Ms. Ferguson will make the motion. If you have a question or comment on any item, you'll have the opportunity to raise it after the presentation of all the proposals. So the first item of business is the election of the 12 directors named in the proxy statement for terms expiring at the 2022 annual meeting. The nominees were selected based on their diverse set of skills and experiences, which -- and making sure they align with our business strategy and, importantly, contribute to the effective oversight of Allstate.

Mr. Chairman, I nominate the 12 nominees listed in the 2021 proxy statement. No other persons have been nominated in accordance with the company's bylaws, and the nominations are now closed.

Thank you, Rhonda. The second item of business is the advisory vote on the compensation of the named executives. And as we've laid out in the proxy, the Board's Compensation and Succession Committee carefully considers investor feedback, current market practices. They use an independent consultant when structuring our executive compensation program.

Mr. Chairman, I move that the compensation of the named executives be approved.

The third item of business is the ratification of the appointment of Deloitte & Touche as the independent registered public accountant for 2021. And the Board's Audit Committee has thoroughly reviewed the performance of Deloitte & Touche during last year and prior years and has selected the firm as the company's independent registered accounting firm for the year 2021.

Mr. Chairman, I move that the appointment of Deloitte & Touche as independent registered public accountant for 2021 be ratified.

The fourth item of business is a proposal to amend the proxy access terms that was submitted by Mr. Kenneth Steiner. Mr. John Chevedden has been invited to make the motion on this matter as the authorized representative of Mr. Steiner.

Hello. This is John Chevedden. Can you hear me okay?

We can hear you fine, John.

Okay. This is proposal 4, Improve Our Catch-22 Proxy Access. Shareholders request that our Board of Directors take the steps necessary to enable as many shareholders as may be needed to combine their shares to equal 3% of our stock owned continuously for 3 years in order to enable shareholder proxy access. Proxy access allows a group of shareholders to nominate a director who will compete with management-nominated directors to see who gets the most votes. Competition is good for our Board of Directors. Currently, a strict limit of 20 shareholders must have owned $1.2 billion of Allstate stock for an unbroken 3 years in order to nominate 1 candidate for the Board under our proxy access rules. A strict limit of 20 deep-pocket shareholders does not allow for a diverse group of shareholders. It's disappointing that management does not support the diversity that this proposal calls for. As a practical matter, it is unlikely that more than 50 shareholders would participate in nominating a director using proxy access with this proposal. There's hardly any administrative difference in 20 shareholders submitting proof of owning $1.2 billion of Allstate stock compared to 50 shareholders submitting proof of owning $1.2 billion of Allstate stock, and adopting this proposal would show management's commitment to diversity. This proposal is asking for so little. Our current proxy access is way out of balance and too difficult for shareholders to make use of. The evidence is that there's not been 1 proxy access candidate placed on the ballot of any company during the past 5 years. There have been 500 companies where they show the right to proxy access during these 5 years. 5 years times 500 company equals 2,500 company years without 1 proxy access director candidate. This means that under the current rules, a company such as Allstate would not expect 1 proxy access director candidate during the next 2,500 years. This is way out of balance as far as shareholders are concerned. Management promotes the fallacy that shareholders should be complacent in proving our corporate governance with this proposal simply because we have the average governance practices that a lot of other companies have. The unfortunate attitude of management is that since Allstate is average, the Allstate goal is to block improvement. Management promotes the fallacy that shareholders should have a penny-pinching attitude when it comes to only management accountability to shareholders, but there should be no penny pinching when it comes to CEO pay. The effectiveness of a good governance proposal like this proposal is that it would not result in more cost but would instead pay dividends because the mere presence of good governance serves as a guardrail to make sure that management elects the best directors on their own. Because the management does not elect the best directors, then shareholders have a remedy with teeth to make their director nominations known to management. Adoption of this proposal might incentivize our Chairman and CEO, Mr. Thomas Wilson, and the Chair of the Management Pay Committee, Mr. Michael Eskew, to perform better. Mr. Eskew again received the highest against votes in 2020, and Mr. Wilson was again second in the highest against director votes. Please vote, yes. Improve our catch-22 proxy access, Proposal 4.

Thank you, Mr. Chevedden. As you know, the Board has recommended against the adoption of that proposal, because Allstate already has proxy access bylaws that give shareholders the opportunity to nominate directors for election, and the requirements of those nominations are aligned with current market practice. We'll now accept questions or comments on these 4 items of business. So in topics other than those to be voted at the meeting, we can come back to those in a general session. Rhonda, do you want to read -- I know some questions have been submitted. Do you want to read those for us and we can make sure we address them?

Yes. Mr. Chairman. We actually received 3 questions on the platform. The first one comes from the Carpenter Pension Fund (sic) [ Carpenters Pension Fund ], and it states, "We believe the company's executive compensation plan should be designed primarily to drive the successful execution of the Board's long-term strategic business plan. Today's public company executive compensation plans are largely formulaic peer-related plans with simplistic annual say-on-pay voting reinforcing plan homogeneity. Would you or the Chair of the Comp Committee speak to whether Allstate might be better served by an executive comp plan tailored specifically to the company's particular circumstances and its unique long-term strategic business plan?"

It's a good question. Let me provide a little bit of context. And if Mike Eskew would like to join in, we can have that as well. So first, the Compensation Committee has a very robust process that they use to decide on executive compensation. It includes both looking outside the company and saying what other companies do and what's the market. It also includes a very in-depth look at what's going on inside the company. And so there's a great deal of conversation about our plans, our strategies at the Compensation Committee level to make sure that their plans are specifically tied to what Allstate does. And so let me give you a couple of examples of both how that works and some changes that the committee made for 2021 that will be important to shareholders. So there's 2 primary components of the management incentive plan. There's an annual plan. How did we do this year? And there's a longer term, which is how did we do over 3 years. The first one is very much tied to the annual operating plan, and that's a very specific plan that the committee reviews multiple times before they decide that it should be the basis for the annual incentive plan. They also look at a variety of scenarios. What if we're wrong about this? What if this happens? And so there's a range that the committee puts together around that. It traditionally has had 3 different components to it. One is, how are we doing and growing? Second, how are we doing on operating profit? And third, how is our investment portfolio doing? And that's been tied very specifically to the plans at the company for the next year and within ranges around it that if you don't get to a certain level, then management pay is nothing; or then, here's where if you overachieve. But they have a lot of conversation and might lead to a great committee that works at that. This year, in addition to that, given the increased focus from shareholders on companies doing more and thinking broader about that, the annual incentive plan has 20% of it now wholly based on 2 items. One is how are we doing on rolling out transformative growth, which is our effort to build a digital insurer. And secondly, how are we doing on diversity, equity and inclusion? And so they have flexibility to embed that into the plan. And so it specifically will be, how did Allstate's management team do in increasing the representation of diversity? And we're good, but we think we can be better there. On the long-term plan, that's much more tied to shareholder value. It has been -- it largely was historically driven by return on equity, which tends to drive the stock price. 3 or 4 years ago, the committee decided to add total shareholder return to that as well on a relative basis. And this year, they've added a growth aspect because in the strategic plans of the company, growth will enable us to get a higher valuation multiple on earnings if we have higher growth. So the committee -- it is highly specific. It is done in the context of what the overall industry does, but it is highly specific to Allstate.

Thank you. A similar question is a little more specific. "Are there any new focuses for CEO pay incentives in the past year?"

The CEO pay follows the overall structure. So there's not a different plan for the CEO than there is for all the other executives. It's 1 pool, 1 plan. The committee obviously spends a lot more time evaluating the CEO performance. They do that on a 1-year basis and a 3-year basis. So every year, they say, how did the CEO do this year? And oh, by the way, how has CEO done over the last 3 years, which brings some long-term continuity to it because that role, sometimes things take longer or should be held accountable for things that happened before the current year. There was 1 change to the CEO compensation, which was to reduce the change in control feature from 3x pay to 2x, and that's because that was commensurate with the market.

Thank you. Our final question related to ballot items relates to the audit firm independence. And it states, "The Carpenters funds believe that the audit firm independence is critical to protecting the integrity of corporate financial reporting. Given that the audit firm and corporate client relationships are generally long tenured, federal regulations require that the lead engagement partner be rotated out of the position every 5 years. Deloitte has been the company's independent auditor since 1992. Could the Chair of the Audit Committee or the representative of Deloitte describe the upcoming lead audit partner rotation process and indicate who makes the decision in the selection of the new lead engagement partner?" Thank you.

Let me take a first shot at that from a macro standpoint, then ask Scott or Henry to join in and tell us about the lead director. You're absolutely correct that the independence of the auditors is critical to making sure that the Board has the information that they need to do proper oversight. It's important for investors to understand that. In fact, that company is doing what it says it's doing and it's reporting it's doing it. Of course, we've all heard about other cases where that has not been the case. And so the Audit Committee initially goes above just the lead audit or the lead partner, which is they look at Deloitte & Touche in total every year, look hard at do we think they're independent. There have been times in the past where we've looked outside and said, well, what would it be like to bring somebody else? And so we should know that the Audit Committee takes independence seriously and thinks actively about it and in that context decided that Deloitte & Touche as a firm was independent. Henry or Scott, do you want to take the lead director (sic) [ audit partner ] rotation question?

Yes. Tom, it's Henry Phillips with Deloitte. I can take that question. As it relates to the rotation of our lead engagement partner, which is currently Scott Shirk, I serve as the Senior Advisory Partner from Deloitte, and I'm part of the team to -- one of my specific roles is to evaluate the successor to our lead engagement partner. And so I work very closely with Kermit Crawford, the Audit Committee Chair, as well as the executive management team to identify the characteristics that will be necessary for that lead engagement partner to be successful over the next 5-year period of time. We then go back and consult -- I could consult with members of senior leadership at Deloitte, and we identify a pool of candidates with focus on some of the criteria the company provided us but with a real focus on quality as well as independence and diversity. And we put forth candidates. The company interviewed all those candidates and narrowed it down to a single candidate with very strong experience within the insurance space. And that was ultimately ratified by the Audit Committee.

Okay.

Thank you. Mr. Chairman?

Yes.

No other questions related to the items of business have been submitted.

Okay. So the polls are still open. You're -- feel free to revote if you'd like to. If you think you need more time, you can please use that vehicle to let us know you need more time. I'll pause here just for a minute to see if somebody needs more time. [Voting]

Okay. If we've got no other request to -- for that, I'll now declare the polls closed. We did, of course, get a preliminary vote report from our tabulation agent, and it represents just a little over 84% of the outstanding shares that were voted prior to the meeting. And Ms. Ferguson will now read the preliminary voting results.

Mr. Chairman, this is the preliminary report of the inspector of election. Each director nominee received more than a majority of the votes cast and, therefore, has been elected. A majority of the shares represented and entitled to vote at this meeting voted in favor of the advisory vote on the executive compensation of the named executive officers. A majority of the shares represented and entitled to vote at this meeting voted in favor of the ratification of the appointment of Deloitte & Touche. Less than a majority of the shares represented and entitled to vote at this meeting voted in favor of the proposal to amend proxy access terms. Final results on all items of business, including the shares cast in person at today's meeting, will be published in a Form 8-K filed with the SEC and posted on our website.

Thank you, Rhonda. As all the business items on the agenda have now been covered, I'll declare this meeting concluded. Let's now discuss Allstate's bright future, which is built on a legacy of success. Allstate is an exceptionally strong company. And as the Allstate brand is world class, we have extensive customer relationships with over 130 million policies in force. Net income last year was $5.5 billion, and we have talented employees and a highly ethical culture. We have distribution relationships that touch virtually every American and many in Canada as well, including over 10,000 Allstate agents, 40,000 independent agents and many of the largest brand-name retailers both in the United States, Canada and now increasingly around the world. We serve customers with -- we have industry-leading capabilities in insurance pricing, claims and emerging technologies such as telematics. Our investment portfolio is managed by an exceptional investment team. Of course, all of these are necessary for our current success, but they're also necessary for our future success for a new world that's rapidly emerging. And today, as many of you have already heard, May 25 marks the 1-year anniversary since George Floyd's murder, and that sparked the renewed focus on civil rights and racial inequity. At the same time, we have competing ideologies that are causing rifts in society. And then a lack of financial stability impacted many Americans as the economy shut down due to the pandemic. This -- all of this, the role of corporation is changing, and businesses are being asked to do more to fix the world's problems. And businesses as a corporation like Allstate, we used to be judged by how we did what we did. So how did we do insurance because that's what we did. Businesses are increasingly being asked to be involved in more than just what they do. And this request is -- in some cases demand, reflects the belief that America can be better. We can have greater prosperity for more people. We should have schools that give children the chance to become productive, well, citizens. Racial inequity should be eliminated, and neighborhoods should be safer. In this environment, businesses such as Allstate have to step up and do more. Now we constantly need to earn the operating license that's been granted to us by society. And our license to operate starts with serving customers. We're also expected to create economic value. That means jobs and profits. It includes improving society by investing in new inventions and communities. So Allstate's purpose amidst all this is to empower customers, create economic value for shareholders provide opportunity for our team and improve communities. And we have a long history of fulfilling those roles, where we were a driving force in getting airbags put into cars and save lives. Innovations such as Your Choice Auto over a decade ago led the industry in features that you see on advertisements all the time now like Accident Forgiveness and new car replacement. Allstate was there first. Anchor pricing began with make and model pricing in the 1950s, and it continues as we lead in telematics pricing. We generate attractive returns for shareholders. Over the last 5 years, the company has paid out $2.9 billion of common dividends and repurchased almost 25% of the common shares outstanding for about $8.5 billion. At the same time, almost $6 billion was invested in growth through the acquisitions in SquareTrade, InfoArmor and National General. We improve communities by helping victims of domestic violence, particularly where money is a weapon of choice. Allstate empowers millions of youth to be active participants in making the world better -- to be better citizens. Now this history of success is the foundation for a successful future. And we are focused on better serving our customers by building a digital insurer that provides affordable, simple and connected protection solutions. Allstate agents will grow with more competitive prices, additional customer support, new technologies and differentiated products. The acquisition of National General will increase growth through independent agents. This will generate attractive returns for shareholders, because we'll be increasing market share in personal property liability and, at the same time, expanding the protection solutions offered to customers through Allstate protection products, Allstate indemnity protection and our other protection businesses. At the same time, ensuring the safety and health of our employees has been our priority since day 1 of the pandemic, and we successfully transitioned most employees to a remote environment, quickly adapting our business practices to ensure we continue to serve customers. And while Americas has made a lot of progress in controlling the coronavirus, our employees in India are still suffering. We're providing financial support, assisting with medical support and joining with other corporations to improve the situation in India. Looking forward, employees will have more flexibility on where they work, either from home or in a hybrid fashion. And I think if you asked our employees and ask them to put it simply who'll be commuting is overrated. Minimum compensation to employees was raised from $15 an hour to $16 to $18 an hour this year. We're also focused on inclusive diversity and equity. After Mr. Floyd was murdered, we reflected, we learned and we acted. So in total, Allstate, we're at or above average on most measures of diversity. We were recognized once again as the top company for diversity and inclusion by DiversityInc. Now that said, we can do more. We must be more diverse. So we're building a 3-year plan with increased resources to be the most diverse digital protection solutions company. At the same time, we acted. Juneteenth was made a company holiday to celebrate the emancipation of people and the end of slavery. Almost 31,000 individuals completed the diversity course of last year, which was a 70% increase in the second half of the year. We issued $1.2 billion of bonds through a syndicate of exclusively minority-, women- and veteran-owned business enterprises. Looking forward, Allstate, we're going to continue to challenge conventional wisdom on pricing factors by using new methods such as telematics. We will fight racism through the Allstate Foundation. We're also committed to addressing climate change. The impact of climate change has been a priority to for 25 years, as long as I've been here. Here, too, we must do more, focusing on reducing the risks that our customers face today. However, we've not been focused as much on the genesis of climate change as on the remediation necessary. Because of climate change, we have much more severe storms that's impacting our customers. So much of the infrastructure and homes were not built to deal with this severity of storms. More first responders, such as firefighters and emergency response units, are needed with better equipment. We work on stronger building codes. Risk-sharing pools sponsored by the federal and state governments have to be expanded. We worked over 25 years to create a number of these, but we need to do more because the risk is higher. The impact of climate change on the investment portfolio will also be a key focus moving forward. So transforming our existing businesses, improving diversity and equity and addressing climate change have positive trajectories that are far from complete. And Allstate is positioned for success far into the future. With your support, Allstate will continue to protect people from life's uncertainties and help build a better world. We will also have the courage to stay focused and not be involved in issues where we do not have expertise. So we're living in extraordinary times. Human potentially is unlimited, a world where poverty, disease, crime and racism do not bar the way for millions of Americans to benefit from greater prosperity. It's where every child can reach their full potential. And Allstate will work to harness our resources to fulfill our purpose: empower customers, create economic value for shareholders, provide opportunity for our team and improve communities. So you can count on Allstate to continue to lead. We will now accept questions or comments from shareholders on any issues that are not related to the 4 items or proposal. So Rhonda, are there some other questions that have come in?

Yes. We received a couple of questions that -- well, "Could you talk about the company's approach regarding share buybacks vis-a-vis increase to dividend?"

A very important question...

That's the first one.

For the [indiscernible] shareholders. The Board is very active in capital deployment that I think virtually every May, I'm -- like I'm sure every meeting we're talking about some portion of capital deployment. The priorities on deploying capital has been to invest in the business and growth, make sure the businesses are contemporary or adapting to new technologies to -- and getting excellent returns to the extent that there is -- there are acquisition opportunities, particularly where we can create more value using our capabilities. So for example, Allstate Protection products has been on a huge growth trajectory by leveraging some of Allstate's strength in its brand, and it's really driven great growth for us. National General, we both use -- bring our capabilities to National General, but National General also brings great capabilities. So that's a 1 plus 1 equals 3. So we will invest in the business, do acquisitions when it makes sense. And then the key focus is on shareholder returns. And that comes really in 2 ways. One is the dividend. The other is share repurchases. As you know, we just raised the dividend by 50% the last quarter. It's a good dividend yield, and that was because we felt like we had the earnings potential and power to continue to provide good cash returns for shareholders. At the same time, I think center is additional capital that's not used in those 3 items. We've pursued share repurchases. And I mentioned we've repurchased about 25% of shares over the last 5 years, which means that your ownership in the company, if you've held 1 share, has now gone up by that amount. And so we've -- but we increased the dividend to also reward those people who stuck with it and didn't want to sell their shares and wanted to just own more of Allstate in total. So the future will look like the past. The Board's -- first Board oversight were heavily engaged looking at making sure that capital is deployed, first, to make sure we fulfill our purpose, serve our customers and do that well; secondly, to the extent we can, leverage capabilities to make more money for shareholders and expand the business platform, we'll do that; and then thirdly, to make sure that shareholders get good cash returns.

Thank you. The next question is, "How is the company transforming in the process of fintech and online insurance?"

Well, certainly, the world is changing quickly, whether that be in insurance or outside of insurance, whether that be -- I was walking last week, then I started counting how many people were looking at their phones when they were walking. And I quit counting at 20 people when I -- and I was at about 35% actually not just have it in their hands, actually looking at it in their hands. So the world is much more connected. And as you point out, the technology is a key part of how that's done. So that certainly makes our -- makes us have to redo our business model, make sure we have the technology to do that. And at the same time, we're getting a host of new competitors who are using new technology to go about business a different way. And our primary focus there has been on transformative growth, which is to really build a digital insurer. And it has 4 components to it. One is to expand access for customers. Two, to improve the customer value proposition. Three, to be more sophisticated at the way we market using that connectivity and then to invest in more sophisticated marketing. And fourth, then, of course, you need technology to do all of that well. So we're investing in a new technology stack. On expanding access, we now provide customers ubiquitous access 24 hours a day under the Allstate brand. You can call a call center. You can call local Allstate agents. You can get on the web. We're available for you any way you'd like to be. That took a fair number of operational changes inside the company last year. But Glenn and his team did a fabulous job pulling that together. The customer value proposition, the second piece, begins with deciding what is it you want to do for customers and be clear about that, and it's to be affordable, simple and connected. So with technology today, we can lower our costs. So we're working on lowering our costs, and we've improved our competitive position on auto insurance. Secondly, we can also be more connected to people, and we're working on improving our mobile apps. And so the -- and then we're building that -- using technology to build simpler products because insurance can be complicated for people. With technology, we believe we can make those products simpler for people. Marketing is also related to the fintech world, because much marketing is done over mobile-based stuff today. We all know we're being tracked everywhere you go, and so we can use that to make sure we get the right offer to the right person at the right time. And so our cost of acquisition is lower, which then enables us to be more affordable. And then the technology solutions. We're investing hundreds of millions of dollars in a new technology stack to make that all happen. So we're out aggressively transforming our business, and the goal then will be to increase market share in personal property-liability. We have similar efforts going on at our other businesses whether that be Allstate Protection products, Allstate Identity products, our Roadside Services. We're using a variety of ways we can use technology and fintech to grow our business.

Thank you. The next question relates to exclusive agent channels. It states that you were committed to the channel, but lately, recently, the appointment of independent agents are offering the same exact products in other major cities. Can you talk a little bit about the future of the exclusive agency force?

Well, first, let me be clear about the independent agent. We've had an independent agent business that has sold under the Allstate brand in areas where it was not economic to have an exclusive agent because there just wasn't enough people in the town to warrant 1 person selling 1 company's products. That business has been with the company for over 25 year or since I've been here. So for over 25 years. We are actually working to transition that business to National General as an independent agent company. That will take us some time because obviously, customers bought from them and like their products and don't have any reason to have to switch from Allstate the brand to the National General brand. Also, there's a bunch of technology and operational work to be done. So that's not new. But it is important to talk about Allstate agents and the change that we're collectively working with them on. And I would make a couple of points. First, we're following the customer. Today's customers want -- they do want affordable, simple and connected protection solutions. And we've thrived by serving our customers, and we have to change as they do. so over half of our customers want the help of an insurer -- over half of consumers, not just our customers, a lot more percentage of our customers want help of an Allstate agent. And particularly when it comes to buying a product, they need and want less help on service issues today because so much of it can be done online, mobile. Get on your phone, do a couple of clicks and you can change your address without having to call somebody and have them do the work for you. So with those new technologies, we can do it at a lower cost, which makes it more affordable for customers. But they do really value the help on buying a product. So as a result, we shifted a portion of the agent's variable compensation opportunity to new business since this is what customers want to pay for. At the same time, we're building a centralized service capability so we can service customers around the clock at lower cost. We'd like to use technology to actually make some of that work just the go away as well. So serving customers as they change then requires all of us to change. Secondly, Allstate agents, they have lots of opportunities to grow and prosper amidst all this change. So we're going to help them adapt to this, do a better job for our customers, serve them the way they want. But there's other opportunities they have to grow. So we have a large range of property-liability products. That's auto, home, boat, motorcycle insurance. And with higher variable compensation on new business, it's more profitable for them to grow. And we've also made it easier to grow by increasing advertising and improving the competitive price position of auto insurance. So we're all in on Allstate agent growth. We recently broadened the range of life insurance solutions that we offer to customers. You -- we can help customers with retirement, investment plans. Small businesses can be served with commercial insurance or workplace benefits. And we're working on testing ways to provide coverage, protection coverage, over things like cell phone, computers, electronic devices and personal identity protection through Allstate agents. So Allstate agents are an important way in which we serve our customers. That is our primary goal. And we're working hard to help them adapt to the change. And that's the path for success for all of us.

Thank you. The next question states, "Can you speak about what the company is doing to encourage employees to become vaccinated?"

So we've -- first, we give people time off if they need time off to go get vaccinated. We obviously encourage people to make the choice that they want to protect themselves. So it's not a requirement that employees get vaccinated, but we encourage people, if it's aligned with their beliefs, to do that. We try to make it easy by giving them time off. We make it free. So we're doing -- giving vaccinations at one of our facilities in the Chicago land area, try to set up other ways they can do it. And we're part of a coalition that's helping advocate for increased vaccinations so that those people who can get it can -- we can stack and build up herd immunity.

Mr. Chairman, no other questions have been submitted.

Okay. Well, thank you for your support of Allstate. This is a fabulous company. I am proud and blessed to be able to lead the company. And since there are no other questions, I'll adjourn the meeting and thank you for joining us.