The good hands are now slimy. They must have a joke for a CEO now and face a rebellion in their ranks. Companies are only as good as their leadership and this company has a failure of leadership, kind of like our government.
I have been an Allstate agent since the 90’s. I can’t believe what Allstate is saying about moral. Maybe they should call a few agents and get their feedback. I am not a napaa member but, I bet that vote will be 99% against Allstate. I can’t figure out what the company is doing or who is leading or making the decisions. From what I understand, about 75% of all new Allstate agents fail in the first few years. They are terminating existing agents because they want them to be at $3,000,000 in premium and appointing new agents where proably less than 1% will ever reach the $3,000,000 level. What they don’t understand is that customers will not travel 20 miles to buy an Allstate policy when there are plenty of neighborhood independent or captive agents. Right now agency moral is probably at the lowest point I can remember and, before you ask, I am on track to hit their goals this year but, I am looking at other options. The company is a mess and I wouldn’t but stock in Allstate if they were giving it away!
I have no sympathy for captive agents. I worked for captive agents long enough to know that when the time came I would be independent. I’m not saying that there’s NO benefit to being a captive but I am saying that the cons far outweigh the pros in my opinion.
Call me at 800-your-hired… I’d love to hire you as a producer for my independent agency. And by the way, we receive 50% more in commissions while having 10 companies at our disposal.
Sounds like the same company I remember working for, happy to no longer represent the slanted A. It is a joy everyday to take business away from Allstate.
I think I got it figured out.. what they appear to be doing is getting rid of the smaller agencies and trying to form a “mega” agency and once they have set up these “mega” agencies they will try to force them to hit these unreasonable goals and they will eventually quit. and then guess what? when you call your mega agent and try to get him on the phone.. it gives you the 1-800 allstate call center. And you know who keeps the 10% agent commision then?? thats right.. the company. pretty terrible way to treat your agents.
We find this often in the independent world as well. It’s too bad because I find loss ratios to be much lower in smaller shops. It’s easy to file a marginal claim when you’re only a number. When it’s Bob or Jim or Suzie and it’s the same person every time, it’s much harder to file that marginal claim.
All companies really need to sit down and look at profitability as opposed to just DWP or policy count. My agency is large enough to pass the business along to everyone but I’ve seen too many mom and pop shops lose good markets for bad reasons.
Companies play the numbers game all the time. They want growth, but don’t provide competitive products in many cases which makes it hard to grow with them, especially in a soft market. Also, if they don’t want to pay an agent contingency, the agent will not get one. All they have to do is increase reserves on a claim to blow up the loss ratio. We missed contingency by .5% because of that kind of situation and the claim was one that should have been subrogated and removed, but the subrogation department was not aggressive in getting the money back which would have removed the claim from the experience.
Allstate Leadership has no doubt alienated many of their agents over the last 20 years and in my opiion the Allstate executives are not very good at what they do. However unions as of late have done more harm than good and the NAPAA leadership considering unionization is a huge mistake. Since NAPAA has a small minority of the agents, it will not make a difference anyway with making headways with management. As one who beleives in the free market, unions including the union in that NAPAA want affiliate with are not only self-serving, but they destory their own jobs and cause harm to our economy. The Insurance Industry has plenty of opportunities and the free market is a much better solution than any artificial muscle a union can provide.
The Allstate leadership have their heads in the sand. They are terminating many agents. The moral is at an all time low. Market share is already shrinking and as the older agents are terminated many of their clients are going to go elsewhere. Seems like a good time to sell ALL stock.
As someone who has been in the insurance business for many years I can say for sure there are some great companies out there and then there are some real dogs. The agency system should be one of Allstate’s great strengths in the face of the “1800 – Name Your Own Price” competition. Unfortunately, it sounds like Allstate is squandering one of its greatest resources. What legitimate professional insurance company would want a unionized workforce representing it? It says, “We don’t believe or trust in the company we represent.”
No one is a slave. If what Allstate is offering is uncompetitive, put out someone else’s shingle.
By unionizing, the agents are gaining virtually nothing, except now they’ll be dues paying members of a group that is controlled by an organization – the AFL-CIO which politically is ideologically opposed to their position as small business people.
Allstate can always pull the plug and no longer distribute through agents. Why not beat them to the punch and get some direct appointments with IA companies. When one carrier treats you poorly, move the book but keep the customer.
I knew something was up when they bought Esurance.
I think allstate has hired the Mayhem guy as their CEO. It really is too bad a company with so much going for it can not keep the backbone of the company happy. I think they are going to pursue the online buyers.
As an Independent, we don’t have the problems the captives have, thank God. In talking with several of our marketing reps, they are beseiged by requests to appoint from Allstate and Farmers agents. These agents are between a rock and a hard place. The company is doing all kinds of wierd things like closing agents, cutting commissions, taking rate on product offerings and these guys have no place to go because of the captive contract. No wonder they are not happy campers. Like you Sarah, I think they are making the commitment to the online buyers via Esurance and could care less about their agents.
Well there’s good and bad. Good news first: I work for another company and Allstate will drop from its lofty perch in the top 3 property and casualty. The bad news as Allstate agents get in bed with unions, the company will become GM. Hope BO decides your too big to fail. Oh more bad news, he will not be president when the unions drain Allstate in 2013.
After the current CEO is dumped by pressure from stockholders, they may see the light, but by that time, many customers and agents will have gone, never to return. State Farm & Farmers are also facing challenges and Independent Agent companies should be stepping forward to reclaim market share. Unions are not a great vehicle to use in most circumstances and agents may feel this is the only way to be heard. They better keep a close eye on where their dues are going or it will just be used to further a political agenda like the unions in other industries.
Mark, this blog is no place to advertise your facilities. Do you think any of these agents want to go back to be a producer for an Independent? You had better be amenable to making them an owner if you bring them in with you. They also may be subject to a strict non piracy agreement with Allstate and legal action could ensue. My guess is that a lot of Allstate agents books will dwindle when they send business to an Independent in return for a commission arrangement.
We understand all of that, of course. Agents are leaving for better opportunities all the time on the independent side and owning their business at the same time. They can survive their non-competes and come out better and happier in the end. We didn’t reinvent this wheel – just improved it, we believe, to create a win-win for many good agents.
the allstate agency channel is a joke. the company uses agents for local presence and does not care about the agent welfare. the organizaiton wants you to meet some lofty goal at any cost. no matter if the agenct makes 10,000 or 50,000 annually. the company has no regard for the agent customer relationship. I suggest to devise a exit plan from the allstate agency channel. It is over for the allstate agent. 10 years from now allstate will be a e surance style company for profitability purposes. It is not about the agent or the customer, it is about the sharholder. Allstate just happens to be in the insurance business.
I was an Allstate agent from 1967 – 1980. Most of those years were spent as a Commercial Account Executive in Florida. When I started as a regular retail agent in a Sears store, there was a move by the Teamsters Union to organize the agents. I was against it then just as I would be against it now if I were still there for one simple reason, no union, no labor law or lawyer is ever going to be able to tell underwriters what they can and cannot write insurance on or for.
With that being said, a union or guild or whatever is an exercise in futility regardless of the temperment of the employer. When the company has the ultimate purse-string, they can and probably should make the rules because it is their capital at risk. Consequently, why aggravate the people that sign your paycheck?
This move to union representation is a sign of frustration with management. Many of the Allstate agents who signed up with Allstate were probably given a lot of pie in the sky about how great it was to be an Allstate agent with a great brand, advertising, competitiveness, etc. Now, the company is dealing from the bottom of the deck with them and with all the recent changes in philosophy, they are rightly mad. No wonder there is rebellion in the ranks.
Pie in the sky promises is how all of the captives work. They have recruitment videos and fancy presentations, they tell you how brand recognition alone will have your phones ringing off the hook. They tell you how a small investment will yield a better life for you.
What they don’t tell you is they have complete control of everything…rates, commissions, lines of business, etc. When they decide to exit any particular line by rate increase or simply not offering it any longer, you’d better find something else to sell or starve.
I’m an ex Allstate agent and have several friends who are still with them. They are miserable! They have seen what’s happened to their fellow agents and wonder if they’re next. They ALL are looking for an escape route, but most are unwilling to start over until they are forced to do so. They can’t necessarily voice thier displeasure with the company publicly for fear of retaliation. It happens. For those agents that are going to become MEGA agents by going in debt up to thier eyeballs, I have a question for you: If the time comes that Allstate decides you’re the next one to go and your book value is not worth what you owe and you can’t find a buyer, what are you going to do? And as far as the union thing goes, what are you going to do, go on strike? I’m sure your clients would love that.
With all the things going on with the company management and all their edicts, they have the gall to tell agents in Texas to go out and hire sales professionals at their expense, train them, license them to achieve growth. I suppose only the so called mega agents would consider doing this, but how can they with cuts in commissions and less competitive product offerings.
I’m an ex Allstate agent and have several friends that still are. I can tell you that they are miserable. They have seen the terminations and forced sales done to other agents and wonder if they’re next. It looks like upper management has gone back to school and gotten a degree in “managing by fear tactics”. Most are looking for an escape route but are unwilling to leap until forced to so by the company. As far as the union thing goes, what are you going to do, go on strike? I’m sure your clients would love that.
A new article came out where Allstate is urging agents in Texas to hire at least 350 Sales Professionals. Of course, these people would be employees of the agent, not Allstate. I wonder how many of the disgruntled Allstate agents will go out and hire and bear the expenses, training of new sales hires when their commissions have been cut, the company taking rate etc. It wouldn’t make much sense to me with all that is going on with the good hands people.
I had a short lived a position working for a scratch agency in Chicago. They “only needed 50K to start their business. The person who “bought” the agency had no prior experience in selling insurance. In fact, they were a school teacher prior to their All State endeavor. After promising me a $12.00/hr salary and then taking it away after I started, and having me call cold call people in the neighborhood during the hours of 9-5 when everyone I called was at work, I realized that All State might not the good hands place to be in. When I was “let go” from a position I was not being paid to do any way, I was so very fortunate that I was able to get hired at an independent agency with a huge book of business and that pays me a “real salary”, and also has several carriers that we can offer a customer, not just one “cookie cutter” policy with rates that went through the roof. We have a lot of old All State customers that are saving hundreds of dollars not sticking with All State. Mayhem indeed.
The question in my mind based on the story is whether you’re a producer or customer service rep. No producer of mine is ever paid a base. You know what your base pay is? The renewal commission I pay you.
I am CSR but I also write personal lines as well as commercial lines for a small agency in Chicago. I would rather have a base pay then to rely on being paid commission only. I sold health insurance before I got my P&C licensing. And we all know what happened to the healthcare industry – it went right down the hopper. I am still licensed to sell health and life and sell a small portion of it in this office as well.
I have no problem paying a CSR a salary because a CSR is also doing productive work processing, quoting and servicing accounts. All of our CSR’s also are paid a commission on business they develop on their own. This gives them the opportunity to make some extra money over their salary. They don’t write a lot, but it is an incentive for them. Some companies also give them some extra on new submissions and written business which is nice.
My CSR’s all get a base pay and bonus based on office production. There’s a HUGE difference between a producer and CSR.
July 28, 2011 at 12:41 pm
Agent says:
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The insurance business is a tough place to get started and succeed in for a young producer. Usually, there is a son or daughter of the owner who is taken care of and remunerated and the other new producers have to write business quickly and a lot of new business to make anything. If a company offers a Producer Development program and help the agent with the expenses for the first year or two, perhaps they can come out. That is assuming you have the right person who will beat the bushes and succeed. Most young people today don’t have the drive to make it and fail in the first year. They want that guaranteed salary and benefits even if they aren’t writing much new business.
The aggressive young producers who don’t know what failure is are the best candidates to succeed in this business. If you can afford to have “just enough” year one, you will be fine. If you can be trained to know that you’re providing a service that can’t be matched by a 1-800 number, you will be fine.
It’s true though that the entitlement mentality has set in for a lot of today’s young people. It’s also set in for a lot of the “producers” that come in here that have been let go from a captive. I want $35K per year plus 25% commission on new business and renewals. Are you kidding me?
I have interviewed several young sales applicants. They can’t seem to grasp the idea of producing commission income in order to be paid. They want the guarantees plus benefits. The insurance business can be lucrative for people with a great deal of desire and have sales ability, but unless a producer is highly motivated, very few of them can make it in the business. They also need access to good markets which provide the products and cost that consumers demand.
I’ve interviewed several dozen like that myself. My turnover is non-existent after 6 months and there’s a reason for that. Fortunately for everyone involved if you come into my office with your hand out for base pay, you’ll be shown the door. I’m no object to a draw against commission to get the ball rolling but that’s temporary.
I have read numerous articles in Insurance publications over the years about producer compensation. Many of them were geared toward the mega agents who have 10-25 Producers out in the field and several million commission income at the agency. It is quite a bit easier for the big boys to fund a young producer than it is for smaller or mid sized agencies. Even if a producer is pretty good and aggressive, you usually don’t make any money on them for at least 2 years. The key is to figure out how far you go with a marginal producer if you can’t motivate them. I have been down that road before too and lost some on a few of them. They just didn’t have the drive to succeed as I did at that age.
July 28, 2011 at 4:35 pm
Mr Independent says:
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I was a captive for 25 yrs with NW. Twelve yrs ago I went independent. Best thing I ever did. Independents have no idea of the control captives are subjected to. Also, it is my understanding that the Big Three captives, Allstate, SF and NW have really tightened up their non-compete clauses so the poor allstate guys will probably have to seek jobs outside the industry, and thats too bad…
Become a STATE FARM AGENT and you can set your WIFE or BROTHER IN LAW or even a TRUSTED EMPLOYEE up with an INDEPENDENT AGENCY “on the side” RIGHT DOWN THE HALL form your STATE FARM agency and you have the BEST OF BOTH WORLDS. The “Captive” SIGN (STATE FARM) to get the calls and walk-in’s, then just WRITE 50% of THE NEW BUSINESS with your INDEPENDENT ON THE SIDE… and, when the RO or CORPORATE turn up the heat, just ROLL THE REST OF YOUR MUTUAL AUTO BUSINESS and PREFERRED HO BUSINESS to your INDEPENDENT and tell the CAPTIVE to “Kiss Off”. Or, when you “RETIRE” from your “Captive” KEEP YOUR XDATES and GO AFTER ALL OF THAT BUSINESS with your INDEPENDENT “ON THE SIDE”. The State Farm Agents in FLORIDA ALL HAVE INDEPENDENT AGECIES “ON THE SIDE” and they are more than thumbing their nose at BLOOMINGTON they are continuing the PROSTITUTION of State Farm to the point where… If the LOYAL State Farm Agents that may still exist in FL or IN ANY OTHER STATE… EVER REALIZE how VALUABLE but UNDERHANDED it is to have an INDEPENDENT AGENCY “ON THE SIDE”… these remaining LOYAL STATE FARM AGENTS would DEMAND that BLOOMINGTON TERMINATE any STATE FARM AGENT with an INDEPENDENT “ON THE SIDE” and 4521 that business to the few remaining LOYAL, HONEST, ETHICAL State Farm Agents that truly belive in UNDERWRITING for QUALITY rather than PROSTITUTING their company… Or, EVERY STATE FARM AGENT, THROUGHOUT THE ENTIRE COUNTRY… should OWN AND INDEPENDENT AGENCY “ON THE SIDE”…
Omni -LOYAL, HONEST & ETHICAL!! Is that what you’re getting from State Farm? What about you Allstate and Farmers Agents? Omni, I’m assuming that 4521 is a code word for begging your managers to seed you some business. Am I wrong?
4521 is what Ed Rust will do to the books of business, in particular SF MUTUAL AUTO, of the INFIDEL agents here in Florida when Ed finally realizes that his FL Agents are TOTALLY OUT OF CONTROL and are setting a very dangerous example FOR ALL OF THE STATE FARM AGENT FORCE, by having INDEPEDENT AGENCIES “ON THE SIDE”. Ed will 4521 ie FLIP THE SWITCH and TRANSFER to books of the infidel agents to the few reaming LOYAL State Farm agents that DON’T HAVE INDEPENDENT AGENCIES “ON THE SIDE”. If the Florida Agents all have Independent Agencies “On The Side” why not EVERY STATE FARM AGENT IN AMERICA? No need for a UNION, haveing an INDEPDENT AGENCY “ON THE SIDE” IS MUCH MORE POWERFUL and EFFECTIVE! Having an independet agency “on the side” is a VERY POWERFUL AND FINANCIALLY BENEFICIAL COUNTERMEASURE AGAINST THE CAPTIVE AGENCY SYSTEM. If Mr. Rust want’s to reduce his agency force in Florida, he could easily base an agent’s termination on BREACH OF CONTRACT, BREACH OF NON COMPETE COVENANTS as these agents are STEARING BUSINESS (STATE FARM MUTUAL AUTO BUSINESS/LIFE INS,ETC) to their Indepdent Agencies “on the side”. Not to mention the FARCE when a SF Agent “RETIRES”, COLLECTS HIS 12 MOS OF RETIRMENT COMMISSION, THEN USES HIS ESTABLISHED INDEPENDENT AGENCY “ON THE SIDE” to market ALL of the XDATES the retired SF Agent has retained… Any State Farm agent with an INDEPENDENT “ON THE SIDE” is making a mochary of the State Farm Captive Agency System and is A HUGE ANTAGONIST to ALL OTHER (CURRENTLY LOYAL) STATE FARM AGENTS THROUGHOUT THE ENTIRE COUNTRY.
THE INTEGRITY OG ALLSTATE AGENTS IS THE FIRST THING THAT CON=MES TO MY MIND. IT S=HAS BEEN ABOUT 12 YEARS SINCE I WAS IN THE AGENCY BUSINESS BUT I REMEMBER NEW CLIENTS COMING TO MY OFFICE COMPLAINING THAT ALLSTATE WOULD GIVE THEM A LOW QUOTE BY PHONE BUT WHEN THEY WENT TO THE AGENTS’ OFFICE THE COST WAS HIGHER. WHEN WE RAN THE REPORTS WE SAW NO REASON FOR THE INCREASE OF PREMIUM CAUSED BY CLAIMS, OR TRAFFIC VIOLATIONS IN BOTH PERSONAL LINES OF AUTO OR HOMEOWNERS. THIS IS BASED ON MANY ALLSTATE AGENTS NOT JUST ONE BAD EXPERIENCE. IT SEEMED THE GOAL WAS TO LURE NEW CLIENTS TO THE OFFICE BY BAIT AND SWITCH. PERSONALLY, I FELT THAT THIS WAS SOMETHING THAT WAS DEVISED BY THE COMPANY ITSELF AS A MARKETING METHOD AND DID NOT REFLECT UPON THE INTEGRITY OF THE AGENT NECESSARILY BUT THE TRAINING METHODS EMPLOYED BY THE COMPANY. OBVIOUSLY, ALLSTATE WROTE A LARGE PART OF THE MARKET SHARE SO THEIR BUSINESS MODEL MUST HAVE BEEN EFFECTIVE.
Most of the big advertisers like GEICO, 21st Century(Farmers), Allstate,Progressive all tease and proclaim a consumer can save $300-$500 per year on their Auto Insurance with them. In reality, they just want to get them in the door and often can’t save any money if the customer has a good deal or there are issues with MVR’s, credit etc. I have seen Allstate downgrade limits, coverage etc to get a price and sell it. In my view, they are the worst offenders of misrepresenting coverage followed closely by Farmers. State Farm has been guilty of not upgrading coverage and just automatically renewing. In this litigous society, that is a dangerous game to play and an E&O waiting to happen. We send letters out to customers quoting higher limits all the time and encouraging them to get a Personal Umbrella since they are inexpensive. This is the time for Independents to step forward and reclaim market share since the captives are all having issues.
I think the biggest offenders are the ones who let you “name your own price.” Allowing a consumer with no formal knowledge or training has no clue in many cases what they’re actually doing. I have one case in my office where they put in a number that was 75% of what they were paying and the coverage turned out to be 1/10th (25/50 vs. 250/500). Luckily I was able to talk sense into said customer. Sadly many just write the policy and never speak with an agent.
You are right Solvent. Progressive’s Flo advertises letting the consumer pick their price and many semi brain dead consumers fall for it and don’t know or want to know what is left out. If a claim occurs, the company falls back on the position that the customer picked those limits, coverage. People that buy insurance online get no coverage advice. The people on the end of the line are order taker computer geeks who are not licensed and just doing the inputting of info. Responsible consumers ask questions and want to know what is being offered. That is where we come in to offer the needed advice to make an informed decision. We don’t ask people to buy something before they know what is in it like our politicians do.
Agent,
I’m not sure about how progressive handles their calls, but I used to work for the “gecko” and was licensed in the states I took calls from. I know for a fact the internet sales agents did as well. In fact the system programmed so that you can’t start or access a policy in a state you’re not licensed for.
I’m far away from being a computer geek.
I always tried to advise people of the benefits of having higher limits, and why their state minimum liability coverage was not enough. Specially people that live in city’s where you can’t drive a mile without seeing a high valued car.
I found that very few people cared about being protected and mostly cared only about price, until they had an accident that is.
I believe that having an independent agent is a great idea. I had my agent for many years and was pretty happy with his service. I always valued his input and had many policies with him.
I believe having an agent is the way to go, but many people care about price and price only and that’s where the direct writers are making their money.
July 29, 2011 at 1:03 pm
Agent says:
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For every phone geek employed by Progressive, GEICO, 21st Century or others that offer advice on coverage, there are 10 who don’t. I have talked to people that have bought online or phone and they all told me they were sold a price with almost no options given unless they asked for it specifically. It was pretty much bottom line selling. Allstate buying Esurance is going to find out about geek buyers. They are the most disloyal customer that they will write because these people shop for everything online and they will change in a heartbeat for a price. Nice to know that we have customers who give us a chance to requote if the cost goes up.
I now have a P&C license and want to get into the insurance business.
After reading many of the comments and I’ve also put together some financials; I am still confused on how you can make money in the insurance business.
Are most commissions averaging 10%? In other words if you reach $3 million in premiums (Allstate or any other agency) will the agency only have $300,000 to pay its bills?
When would an ‘owner’ get paid if you have all of this high priced ‘new producer’ talent?
Jackie, If you are lucky enough to have a father or mother who owns an agency, they will make sure you are funded while you are learning how to sell and renew business. If you are not, you will have a rough time making a living and will have to really put a lot of business on the books. A typical Homeowners policy pays 15% to the agency. A $1,000 premium =$150 to split between the agency and the producer. 40% to the producer = $60. Do you see now how much business you would have to produce to make a living? The good news is that after you have put a substantial amount of business on the books, you get renewal credit plus new business credit. You will not make a decent living until you reach $1mil business on the books.
That is really all a captive agent can do if they cannot offer coverage. It is also one of the big disadvantages of a captive agent. They don’t have anywhere else to go if coverage cannot be extended. Your best bet is to go with a large independent agent with many markets. You can generally find coverage with someone instead of having to refer to another agent.
Yes, when you become a State Farm Agent, just open an INDEPDENDENT AGENCY “on the side” like ALL of the SF Agents in FL and other states… Then, if AUTO underwriting says “NO” or if the LIFE INSURANCE PRICE is A BIT TOO HIGH, just write it with your INDEPDENDENT. Also, if your Agency Field Executive starts to push to hard for Life production, or Bank CD’s, or if your loss ratios become a problem, just let your AFE know that you have an INDEPENDENT AGENCY “On The Side” and you would be HAPPY TO ROLL ALL OF YOUR MUTUAL AUTO, LIFE, HO etc… busness to it if they don’t LIGHTEN UP on you… And, here is the BIG BONUS, when you retire from SF, after you receive your 12 MONTH RETIREMENT PAYOUT, just start CALLING ALL OF YOUR OLD EXDATES (they will only be a year old) and START COMPETITING for the business and take it away from the SF agent that replced you or that your book was 4521’d to. Your INDEPENDENT AGENCY “On The Side” will be established by then… so it will be EASY TO HAVE YOUR STATE FARM CAKE and… EAT THEIR LUNCH TOO!
EVERY STATE FARM AGENT should have an INDEPENDENT “ON THE SIDE” to LEVEL THE PLAYING FIELD with BLOOMINGTON. No need for the “NASFA” or a UNION, the most powerful advocate for YOU as a STATE FARM AGENT ANYWHERE IN THE USA is… AN INDEPENDENT AGENCY “ON THE SIDE”!
Wow Omni. Hard for me to believe that State Farm would let any of their captive agents have an Independent “on the side” to siphon business away from them. These people didn’t get to be the largest domestic carrier by being stupid. Perhaps they are making allowances for Florida since there are unique challenges there, particularly with the hurricane exposure.
Agent, Wake up and smell the “Independent Roast”! Unless you are trying to “cloud the coffee”???? Surely, you know that Corporate has allowed the FL SF Agents to write NON RENEWING HO POLCIES with a handfull of non AM Best rated carriers to appease the State of Floirda’s Insurance Commissioner as too much State Farm NEW HO and Non Renewing BUSINESS was being written with CITIZENS the market of last resort, not the market of FIRST CHOICE for SF Agents. HOWEVER, that is NOT good enough for most of the FL Agents, they have taken that Corporate Consession to a much HIGHER LEVEL which could and IS much more damaging to State Farm’s CAPTIVE model… MANY have INDEPENDENT AGENCIES “On The Side” RIGHT DOWN THE HALL or IN THE OFFICE ON THE NEXT FLOOR or DOWN AT THE OTHER END OF THE BUILDING… This is ABSOLUTELY EMPOWERING to the SF Agent with the INDEPENDENT “On The Side” but it is MORE THAN A SLAP IN THE FACE for EVERY LOYAL SF AGENT that does NOT have an INDEPENDENT “On The Side” irrespective of what state the SF Agent operates in. An INDEPENDENT “On The Side” is a continuation of the prostituion of the State Farm Culture of Quality and Loyaly to the CAPTIVE agency system. Obviously, the SF Agents in FL were able to use the HOMEOWNERS line as a LOSS LEADER for many years (decades) to get to that highly sought after MUTUAL AUTO BUSINESS… That HO business SHOULD have been MUCH MORE CLOSELY UNDERWRITEN as the book is primarily a loosing proposition and much too large in FL. I pitty the FL SF Agent that only submited QUALITY Homeowners and BOP risks, THEY SHOULD HAVE PROSTITUTED the company like the majority of their colleagues. NOW, that prostitution continues in as much as… Many SF Agents have an INDEPENDENT “On The Side” to WRITE and POTENTIALLY ROLL quality MUTUAL AUTO BUSINESS and LIFE Business for LOWER RATES with other carriers… What I would like to know, and you should too, unless YOU have an INDPENENDENT “On The Side” is will BLOOMINGTON (in writing) FORMALLY ALLOW its FL AGENTS and ENTIRE CAPTIVE AGENCY FORCE throughout the country, to OPEN INDEPENDENT AGENCIES “On The Side”? Because, if it is ok for some, why not all. And, if SF Corporate will not allow INDEPENDENT AGENCIES “On The Side” will they then TERMINATE and 4521 the books of business to the waining LOYAL SF AGENTS with NO Indpendent’s on the side? This would be a VERY good idea RIGHT NOW in FL as a DEFENSIVE manuver as my guess is that many FL SF AGENTS are CURRENTLY MOVING and are POISED TO MOVE ENTIRE BOOKS OF MUTUAL AUTO BUSINESS and “Stick it To The Farm”. The only way to retain the integrity of the SF Captive Agency model is to HAVE A CORPORATE CONDONING or CONDEMNATION and CONSEQUENCES.
What Say You?
A.JOHN
I am glad I am not located in Florida trying to deal with these issues. In Texas, we have our own challenges, particularly in the coastal Tier 1 & 2 areas where the Windstorm association is actively involved. The Standards have issues with business in those areas. Texas also is a weather state and many carriers have a hard time making a consistent profit on HO since hail and wind can be devastating.
I saw an article yesterday where Allstate CEO Wilson said he had received enthusiastic support from their agents for the changes being made. Hello! He has a rebellion in full swing with possible unionization and he thinks the agent force is supporting him. He sounds as tone deaf as our politicians in DC. Allstate will get what they deserve with this kind of leadership.
August 1, 2011 at 10:10 am
mike says:
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REALLY YOU AGENTS HAVE FINALLY WOKE UP? YOU THINK THAT WILL WORK WITH ALLSTATE?
Why not? Rather than JOIN A UNION, let good old fashioned “free enterprise” LEVEL THE PLAYING FIELD. If you are a so called “CAPTIVE AGENT”, realese the BONDS OF CAPTIVITY by OPENING AN INDEPENDENT “ON THE SIDE”. Seriously ALL of the STATE FARM AGENTS in FLORIDA have INDEPENDENT AGENCIES “On The Side”… Well, probabl not all, there may be a few LOYAL “Shmucks” that still honor their contract with Bloomington and think that the INFEDEL AGENTS with INDEPENDENT AGENCIES “On The Side” may be subject to TERMINATION if BLOOMINGTON Discovers them, but… BLOOMINGTON OBVISOULY CONDONES the Independent “on the side”, not just the FL HO Markets that BLOOMINGTON allows for HO CAN/REWRITES… I’m talking about FULL BLOWN INDEPENDENT AGENCIES “On The Side”…
Wow, this is a hard one…who to root for?
ALLSTATE VS UNIONS…
it’s kind of like the devil vs megadevil…no offense to their agents, but their company has long been one of the more crooked examples of free enterprise known to mankind…
and then there are unions, which stifle growth, and actually reduce employment in the name of creating jobs, not for people who work with a company, but from taking dues and creating worthless jobs with the union itself…
So in one corner, Megaselfishstate…the greased hands people…
VS
Unions…be sure to ask for them by name…willing to stifle growth and manifpulate any election necessary to get “card check” into law…because no right thinking person believes an union will help them save their job…so trick someone into being muscled into ‘unionhood’…
Good luck to the agents and hope you can find ways to remove yourself from Allsnake.
Omni’s solution is better than unionization. These guys should seek to go Independent rather than trying the union route to force Allsnake to do the right thing. Perhaps Allsnake really wants to be another Progressive and deal direct as evidenced by the recent purchase of Esurance. They basically threw their agents under the bus and I don’t blame their captive agents for being upset since their commissions have been cut among other things.
Allstate, State Farm, Nationwide – they are all drive-through window insurance companies where “millions” are served low quality insurance. You wouldn’t have your wedding reception at McDonald’s, but millions buy low value insurance from the one-name agents who know nothing outside of their limited portfolio of products, and have no knowledge to differentiate why there products are substandard, and most don’t even know who ISO is.
When an agent grows up, they need to make a choice: Do they keep peddling policies based on price aided by the company’s cheesey commercials, or do they provide a professional service using the best tools available? That requires being an IA.
Market, I think you hit the nail on the head. You can also add 21st Century, Progressive, Farmers, GEICO to the list of advertisers on the cheesy commercials. They are after the entitlement/non thinker bunch who think you can get something for nothing. People that buy insurance falling for a line are asking for trouble in the long run. IA offers actual advice to people on their protection needs. Hopefully, we will see an increase in market share when the dust settles from the captive agents mess we are seeing with these markets.
In our current high performance environment, all companies demand “expected results”. That’s what delivers “expected results” when we open our paychecks. A fair trade.
It is the carriers responsibility to provide the products and filings to be competitive in the market place. Allstate is not currently very competitive in our area for Home or Auto. They resort to quoting less than Replacement Cost on HO and lower limits and missing coverage on the Auto. The customer often don’t know what their Allstate agent left out and are shocked when we point this out to them.
I see where the Allstate agents voted to do their guild/union to deal with management. It will be interesting to see how all this shakes out. The net result will probably be fewer Allstate agents and more Independents created or joined with other. I think Allstates volume will fall off when this business starts getting moved.
The CAPTIVES cant control their agents. If you are a loyal captive agent, working hard within the captive guidelines, and you do not have an INDEPENDENT AGENCY “ON THE SIDE” to roll ALL of your business to (if you and corporate have a disagreement) You are a SAP. I feel sorry for the loyal agents within State Farm and Allstate, etc that DON’T have an independent “ON THE SIDE”. They are FOOLS. Apparently the captive carriers don’t know or don’t care how vulnerable they are when their captive agency force has Independent Agencies “On The Side”… Those “On The Side” Independent Agencies become PRIMARY real quick and make a MOCKERY of the captive agency system and all of the remaining (if any) loyal captive agents!
I am 36 year retired Senior Account Allstate Agent. who retired early at age 55. We had similar issues, that made us hire a labor lawyer,to present our case. We won the case, and was compensated. There is hope, if u unite, and hire a good labor lawyer. Good luck. R u in GOOD HANDS?
But but but but, I thought I was in good hands!
The good hands are now slimy. They must have a joke for a CEO now and face a rebellion in their ranks. Companies are only as good as their leadership and this company has a failure of leadership, kind of like our government.
I have been an Allstate agent since the 90’s. I can’t believe what Allstate is saying about moral. Maybe they should call a few agents and get their feedback. I am not a napaa member but, I bet that vote will be 99% against Allstate. I can’t figure out what the company is doing or who is leading or making the decisions. From what I understand, about 75% of all new Allstate agents fail in the first few years. They are terminating existing agents because they want them to be at $3,000,000 in premium and appointing new agents where proably less than 1% will ever reach the $3,000,000 level. What they don’t understand is that customers will not travel 20 miles to buy an Allstate policy when there are plenty of neighborhood independent or captive agents. Right now agency moral is probably at the lowest point I can remember and, before you ask, I am on track to hit their goals this year but, I am looking at other options. The company is a mess and I wouldn’t but stock in Allstate if they were giving it away!
I have no sympathy for captive agents. I worked for captive agents long enough to know that when the time came I would be independent. I’m not saying that there’s NO benefit to being a captive but I am saying that the cons far outweigh the pros in my opinion.
Call me at 800-your-hired… I’d love to hire you as a producer for my independent agency. And by the way, we receive 50% more in commissions while having 10 companies at our disposal.
OMG – no doubt Republican insurance agents joining a UNION?!? Guess this makes more sense to them than when other groups want to collective bargain?
90% of Allstate agents have NOT joined a union. I wonder what percentage of the 10% who have joined are Democrats.
It’s okay. Thinking is hard.
Rock on Tea Party…
Sounds like the same company I remember working for, happy to no longer represent the slanted A. It is a joy everyday to take business away from Allstate.
I think I got it figured out.. what they appear to be doing is getting rid of the smaller agencies and trying to form a “mega” agency and once they have set up these “mega” agencies they will try to force them to hit these unreasonable goals and they will eventually quit. and then guess what? when you call your mega agent and try to get him on the phone.. it gives you the 1-800 allstate call center. And you know who keeps the 10% agent commision then?? thats right.. the company. pretty terrible way to treat your agents.
Farmers insurance group has done the same thing over a year ago.
I know because i was one of the small agents with over 32 years with Farmers.
We find this often in the independent world as well. It’s too bad because I find loss ratios to be much lower in smaller shops. It’s easy to file a marginal claim when you’re only a number. When it’s Bob or Jim or Suzie and it’s the same person every time, it’s much harder to file that marginal claim.
All companies really need to sit down and look at profitability as opposed to just DWP or policy count. My agency is large enough to pass the business along to everyone but I’ve seen too many mom and pop shops lose good markets for bad reasons.
Companies play the numbers game all the time. They want growth, but don’t provide competitive products in many cases which makes it hard to grow with them, especially in a soft market. Also, if they don’t want to pay an agent contingency, the agent will not get one. All they have to do is increase reserves on a claim to blow up the loss ratio. We missed contingency by .5% because of that kind of situation and the claim was one that should have been subrogated and removed, but the subrogation department was not aggressive in getting the money back which would have removed the claim from the experience.
Allstate Leadership has no doubt alienated many of their agents over the last 20 years and in my opiion the Allstate executives are not very good at what they do. However unions as of late have done more harm than good and the NAPAA leadership considering unionization is a huge mistake. Since NAPAA has a small minority of the agents, it will not make a difference anyway with making headways with management. As one who beleives in the free market, unions including the union in that NAPAA want affiliate with are not only self-serving, but they destory their own jobs and cause harm to our economy. The Insurance Industry has plenty of opportunities and the free market is a much better solution than any artificial muscle a union can provide.
The Allstate leadership have their heads in the sand. They are terminating many agents. The moral is at an all time low. Market share is already shrinking and as the older agents are terminated many of their clients are going to go elsewhere. Seems like a good time to sell ALL stock.
Seems like ALL stock should be rated a SELL!
As someone who has been in the insurance business for many years I can say for sure there are some great companies out there and then there are some real dogs. The agency system should be one of Allstate’s great strengths in the face of the “1800 – Name Your Own Price” competition. Unfortunately, it sounds like Allstate is squandering one of its greatest resources. What legitimate professional insurance company would want a unionized workforce representing it? It says, “We don’t believe or trust in the company we represent.”
No one is a slave. If what Allstate is offering is uncompetitive, put out someone else’s shingle.
By unionizing, the agents are gaining virtually nothing, except now they’ll be dues paying members of a group that is controlled by an organization – the AFL-CIO which politically is ideologically opposed to their position as small business people.
Allstate can always pull the plug and no longer distribute through agents. Why not beat them to the punch and get some direct appointments with IA companies. When one carrier treats you poorly, move the book but keep the customer.
I knew something was up when they bought Esurance.
I think allstate has hired the Mayhem guy as their CEO. It really is too bad a company with so much going for it can not keep the backbone of the company happy. I think they are going to pursue the online buyers.
As an Independent, we don’t have the problems the captives have, thank God. In talking with several of our marketing reps, they are beseiged by requests to appoint from Allstate and Farmers agents. These agents are between a rock and a hard place. The company is doing all kinds of wierd things like closing agents, cutting commissions, taking rate on product offerings and these guys have no place to go because of the captive contract. No wonder they are not happy campers. Like you Sarah, I think they are making the commitment to the online buyers via Esurance and could care less about their agents.
Well there’s good and bad. Good news first: I work for another company and Allstate will drop from its lofty perch in the top 3 property and casualty. The bad news as Allstate agents get in bed with unions, the company will become GM. Hope BO decides your too big to fail. Oh more bad news, he will not be president when the unions drain Allstate in 2013.
After the current CEO is dumped by pressure from stockholders, they may see the light, but by that time, many customers and agents will have gone, never to return. State Farm & Farmers are also facing challenges and Independent Agent companies should be stepping forward to reclaim market share. Unions are not a great vehicle to use in most circumstances and agents may feel this is the only way to be heard. They better keep a close eye on where their dues are going or it will just be used to further a political agenda like the unions in other industries.
In Oregon, earn higher commissions representing top carriers while having REAL independence. Call Mark at Choices Insurance, 503-302-5978.
Mark, this blog is no place to advertise your facilities. Do you think any of these agents want to go back to be a producer for an Independent? You had better be amenable to making them an owner if you bring them in with you. They also may be subject to a strict non piracy agreement with Allstate and legal action could ensue. My guess is that a lot of Allstate agents books will dwindle when they send business to an Independent in return for a commission arrangement.
We understand all of that, of course. Agents are leaving for better opportunities all the time on the independent side and owning their business at the same time. They can survive their non-competes and come out better and happier in the end. We didn’t reinvent this wheel – just improved it, we believe, to create a win-win for many good agents.
the allstate agency channel is a joke. the company uses agents for local presence and does not care about the agent welfare. the organizaiton wants you to meet some lofty goal at any cost. no matter if the agenct makes 10,000 or 50,000 annually. the company has no regard for the agent customer relationship. I suggest to devise a exit plan from the allstate agency channel. It is over for the allstate agent. 10 years from now allstate will be a e surance style company for profitability purposes. It is not about the agent or the customer, it is about the sharholder. Allstate just happens to be in the insurance business.
I was an Allstate agent from 1967 – 1980. Most of those years were spent as a Commercial Account Executive in Florida. When I started as a regular retail agent in a Sears store, there was a move by the Teamsters Union to organize the agents. I was against it then just as I would be against it now if I were still there for one simple reason, no union, no labor law or lawyer is ever going to be able to tell underwriters what they can and cannot write insurance on or for.
With that being said, a union or guild or whatever is an exercise in futility regardless of the temperment of the employer. When the company has the ultimate purse-string, they can and probably should make the rules because it is their capital at risk. Consequently, why aggravate the people that sign your paycheck?
This move to union representation is a sign of frustration with management. Many of the Allstate agents who signed up with Allstate were probably given a lot of pie in the sky about how great it was to be an Allstate agent with a great brand, advertising, competitiveness, etc. Now, the company is dealing from the bottom of the deck with them and with all the recent changes in philosophy, they are rightly mad. No wonder there is rebellion in the ranks.
Pie in the sky promises is how all of the captives work. They have recruitment videos and fancy presentations, they tell you how brand recognition alone will have your phones ringing off the hook. They tell you how a small investment will yield a better life for you.
What they don’t tell you is they have complete control of everything…rates, commissions, lines of business, etc. When they decide to exit any particular line by rate increase or simply not offering it any longer, you’d better find something else to sell or starve.
I’m an ex Allstate agent and have several friends who are still with them. They are miserable! They have seen what’s happened to their fellow agents and wonder if they’re next. They ALL are looking for an escape route, but most are unwilling to start over until they are forced to do so. They can’t necessarily voice thier displeasure with the company publicly for fear of retaliation. It happens. For those agents that are going to become MEGA agents by going in debt up to thier eyeballs, I have a question for you: If the time comes that Allstate decides you’re the next one to go and your book value is not worth what you owe and you can’t find a buyer, what are you going to do? And as far as the union thing goes, what are you going to do, go on strike? I’m sure your clients would love that.
With all the things going on with the company management and all their edicts, they have the gall to tell agents in Texas to go out and hire sales professionals at their expense, train them, license them to achieve growth. I suppose only the so called mega agents would consider doing this, but how can they with cuts in commissions and less competitive product offerings.
I’m an ex Allstate agent and have several friends that still are. I can tell you that they are miserable. They have seen the terminations and forced sales done to other agents and wonder if they’re next. It looks like upper management has gone back to school and gotten a degree in “managing by fear tactics”. Most are looking for an escape route but are unwilling to leap until forced to so by the company. As far as the union thing goes, what are you going to do, go on strike? I’m sure your clients would love that.
A new article came out where Allstate is urging agents in Texas to hire at least 350 Sales Professionals. Of course, these people would be employees of the agent, not Allstate. I wonder how many of the disgruntled Allstate agents will go out and hire and bear the expenses, training of new sales hires when their commissions have been cut, the company taking rate etc. It wouldn’t make much sense to me with all that is going on with the good hands people.
I had a short lived a position working for a scratch agency in Chicago. They “only needed 50K to start their business. The person who “bought” the agency had no prior experience in selling insurance. In fact, they were a school teacher prior to their All State endeavor. After promising me a $12.00/hr salary and then taking it away after I started, and having me call cold call people in the neighborhood during the hours of 9-5 when everyone I called was at work, I realized that All State might not the good hands place to be in. When I was “let go” from a position I was not being paid to do any way, I was so very fortunate that I was able to get hired at an independent agency with a huge book of business and that pays me a “real salary”, and also has several carriers that we can offer a customer, not just one “cookie cutter” policy with rates that went through the roof. We have a lot of old All State customers that are saving hundreds of dollars not sticking with All State. Mayhem indeed.
The question in my mind based on the story is whether you’re a producer or customer service rep. No producer of mine is ever paid a base. You know what your base pay is? The renewal commission I pay you.
I am CSR but I also write personal lines as well as commercial lines for a small agency in Chicago. I would rather have a base pay then to rely on being paid commission only. I sold health insurance before I got my P&C licensing. And we all know what happened to the healthcare industry – it went right down the hopper. I am still licensed to sell health and life and sell a small portion of it in this office as well.
I have no problem paying a CSR a salary because a CSR is also doing productive work processing, quoting and servicing accounts. All of our CSR’s also are paid a commission on business they develop on their own. This gives them the opportunity to make some extra money over their salary. They don’t write a lot, but it is an incentive for them. Some companies also give them some extra on new submissions and written business which is nice.
My CSR’s all get a base pay and bonus based on office production. There’s a HUGE difference between a producer and CSR.
The insurance business is a tough place to get started and succeed in for a young producer. Usually, there is a son or daughter of the owner who is taken care of and remunerated and the other new producers have to write business quickly and a lot of new business to make anything. If a company offers a Producer Development program and help the agent with the expenses for the first year or two, perhaps they can come out. That is assuming you have the right person who will beat the bushes and succeed. Most young people today don’t have the drive to make it and fail in the first year. They want that guaranteed salary and benefits even if they aren’t writing much new business.
The aggressive young producers who don’t know what failure is are the best candidates to succeed in this business. If you can afford to have “just enough” year one, you will be fine. If you can be trained to know that you’re providing a service that can’t be matched by a 1-800 number, you will be fine.
It’s true though that the entitlement mentality has set in for a lot of today’s young people. It’s also set in for a lot of the “producers” that come in here that have been let go from a captive. I want $35K per year plus 25% commission on new business and renewals. Are you kidding me?
I have interviewed several young sales applicants. They can’t seem to grasp the idea of producing commission income in order to be paid. They want the guarantees plus benefits. The insurance business can be lucrative for people with a great deal of desire and have sales ability, but unless a producer is highly motivated, very few of them can make it in the business. They also need access to good markets which provide the products and cost that consumers demand.
I’ve interviewed several dozen like that myself. My turnover is non-existent after 6 months and there’s a reason for that. Fortunately for everyone involved if you come into my office with your hand out for base pay, you’ll be shown the door. I’m no object to a draw against commission to get the ball rolling but that’s temporary.
I have read numerous articles in Insurance publications over the years about producer compensation. Many of them were geared toward the mega agents who have 10-25 Producers out in the field and several million commission income at the agency. It is quite a bit easier for the big boys to fund a young producer than it is for smaller or mid sized agencies. Even if a producer is pretty good and aggressive, you usually don’t make any money on them for at least 2 years. The key is to figure out how far you go with a marginal producer if you can’t motivate them. I have been down that road before too and lost some on a few of them. They just didn’t have the drive to succeed as I did at that age.
I was a captive for 25 yrs with NW. Twelve yrs ago I went independent. Best thing I ever did. Independents have no idea of the control captives are subjected to. Also, it is my understanding that the Big Three captives, Allstate, SF and NW have really tightened up their non-compete clauses so the poor allstate guys will probably have to seek jobs outside the industry, and thats too bad…
Become a STATE FARM AGENT and you can set your WIFE or BROTHER IN LAW or even a TRUSTED EMPLOYEE up with an INDEPENDENT AGENCY “on the side” RIGHT DOWN THE HALL form your STATE FARM agency and you have the BEST OF BOTH WORLDS. The “Captive” SIGN (STATE FARM) to get the calls and walk-in’s, then just WRITE 50% of THE NEW BUSINESS with your INDEPENDENT ON THE SIDE… and, when the RO or CORPORATE turn up the heat, just ROLL THE REST OF YOUR MUTUAL AUTO BUSINESS and PREFERRED HO BUSINESS to your INDEPENDENT and tell the CAPTIVE to “Kiss Off”. Or, when you “RETIRE” from your “Captive” KEEP YOUR XDATES and GO AFTER ALL OF THAT BUSINESS with your INDEPENDENT “ON THE SIDE”. The State Farm Agents in FLORIDA ALL HAVE INDEPENDENT AGECIES “ON THE SIDE” and they are more than thumbing their nose at BLOOMINGTON they are continuing the PROSTITUTION of State Farm to the point where… If the LOYAL State Farm Agents that may still exist in FL or IN ANY OTHER STATE… EVER REALIZE how VALUABLE but UNDERHANDED it is to have an INDEPENDENT AGENCY “ON THE SIDE”… these remaining LOYAL STATE FARM AGENTS would DEMAND that BLOOMINGTON TERMINATE any STATE FARM AGENT with an INDEPENDENT “ON THE SIDE” and 4521 that business to the few remaining LOYAL, HONEST, ETHICAL State Farm Agents that truly belive in UNDERWRITING for QUALITY rather than PROSTITUTING their company… Or, EVERY STATE FARM AGENT, THROUGHOUT THE ENTIRE COUNTRY… should OWN AND INDEPENDENT AGENCY “ON THE SIDE”…
Trix are for KIDS
Omni -LOYAL, HONEST & ETHICAL!! Is that what you’re getting from State Farm? What about you Allstate and Farmers Agents? Omni, I’m assuming that 4521 is a code word for begging your managers to seed you some business. Am I wrong?
4521 is what Ed Rust will do to the books of business, in particular SF MUTUAL AUTO, of the INFIDEL agents here in Florida when Ed finally realizes that his FL Agents are TOTALLY OUT OF CONTROL and are setting a very dangerous example FOR ALL OF THE STATE FARM AGENT FORCE, by having INDEPEDENT AGENCIES “ON THE SIDE”. Ed will 4521 ie FLIP THE SWITCH and TRANSFER to books of the infidel agents to the few reaming LOYAL State Farm agents that DON’T HAVE INDEPENDENT AGENCIES “ON THE SIDE”. If the Florida Agents all have Independent Agencies “On The Side” why not EVERY STATE FARM AGENT IN AMERICA? No need for a UNION, haveing an INDEPDENT AGENCY “ON THE SIDE” IS MUCH MORE POWERFUL and EFFECTIVE! Having an independet agency “on the side” is a VERY POWERFUL AND FINANCIALLY BENEFICIAL COUNTERMEASURE AGAINST THE CAPTIVE AGENCY SYSTEM. If Mr. Rust want’s to reduce his agency force in Florida, he could easily base an agent’s termination on BREACH OF CONTRACT, BREACH OF NON COMPETE COVENANTS as these agents are STEARING BUSINESS (STATE FARM MUTUAL AUTO BUSINESS/LIFE INS,ETC) to their Indepdent Agencies “on the side”. Not to mention the FARCE when a SF Agent “RETIRES”, COLLECTS HIS 12 MOS OF RETIRMENT COMMISSION, THEN USES HIS ESTABLISHED INDEPENDENT AGENCY “ON THE SIDE” to market ALL of the XDATES the retired SF Agent has retained… Any State Farm agent with an INDEPENDENT “ON THE SIDE” is making a mochary of the State Farm Captive Agency System and is A HUGE ANTAGONIST to ALL OTHER (CURRENTLY LOYAL) STATE FARM AGENTS THROUGHOUT THE ENTIRE COUNTRY.
4521 BEFORE IT’S TOO LATE!
Omni: LOYALTY is a two way street! When these companies start dealing with their agents fairly, LOYALTY may not be an issue.
THE INTEGRITY OG ALLSTATE AGENTS IS THE FIRST THING THAT CON=MES TO MY MIND. IT S=HAS BEEN ABOUT 12 YEARS SINCE I WAS IN THE AGENCY BUSINESS BUT I REMEMBER NEW CLIENTS COMING TO MY OFFICE COMPLAINING THAT ALLSTATE WOULD GIVE THEM A LOW QUOTE BY PHONE BUT WHEN THEY WENT TO THE AGENTS’ OFFICE THE COST WAS HIGHER. WHEN WE RAN THE REPORTS WE SAW NO REASON FOR THE INCREASE OF PREMIUM CAUSED BY CLAIMS, OR TRAFFIC VIOLATIONS IN BOTH PERSONAL LINES OF AUTO OR HOMEOWNERS. THIS IS BASED ON MANY ALLSTATE AGENTS NOT JUST ONE BAD EXPERIENCE. IT SEEMED THE GOAL WAS TO LURE NEW CLIENTS TO THE OFFICE BY BAIT AND SWITCH. PERSONALLY, I FELT THAT THIS WAS SOMETHING THAT WAS DEVISED BY THE COMPANY ITSELF AS A MARKETING METHOD AND DID NOT REFLECT UPON THE INTEGRITY OF THE AGENT NECESSARILY BUT THE TRAINING METHODS EMPLOYED BY THE COMPANY. OBVIOUSLY, ALLSTATE WROTE A LARGE PART OF THE MARKET SHARE SO THEIR BUSINESS MODEL MUST HAVE BEEN EFFECTIVE.
Most of the big advertisers like GEICO, 21st Century(Farmers), Allstate,Progressive all tease and proclaim a consumer can save $300-$500 per year on their Auto Insurance with them. In reality, they just want to get them in the door and often can’t save any money if the customer has a good deal or there are issues with MVR’s, credit etc. I have seen Allstate downgrade limits, coverage etc to get a price and sell it. In my view, they are the worst offenders of misrepresenting coverage followed closely by Farmers. State Farm has been guilty of not upgrading coverage and just automatically renewing. In this litigous society, that is a dangerous game to play and an E&O waiting to happen. We send letters out to customers quoting higher limits all the time and encouraging them to get a Personal Umbrella since they are inexpensive. This is the time for Independents to step forward and reclaim market share since the captives are all having issues.
I think the biggest offenders are the ones who let you “name your own price.” Allowing a consumer with no formal knowledge or training has no clue in many cases what they’re actually doing. I have one case in my office where they put in a number that was 75% of what they were paying and the coverage turned out to be 1/10th (25/50 vs. 250/500). Luckily I was able to talk sense into said customer. Sadly many just write the policy and never speak with an agent.
You are right Solvent. Progressive’s Flo advertises letting the consumer pick their price and many semi brain dead consumers fall for it and don’t know or want to know what is left out. If a claim occurs, the company falls back on the position that the customer picked those limits, coverage. People that buy insurance online get no coverage advice. The people on the end of the line are order taker computer geeks who are not licensed and just doing the inputting of info. Responsible consumers ask questions and want to know what is being offered. That is where we come in to offer the needed advice to make an informed decision. We don’t ask people to buy something before they know what is in it like our politicians do.
Agent,
I’m not sure about how progressive handles their calls, but I used to work for the “gecko” and was licensed in the states I took calls from. I know for a fact the internet sales agents did as well. In fact the system programmed so that you can’t start or access a policy in a state you’re not licensed for.
I’m far away from being a computer geek.
I always tried to advise people of the benefits of having higher limits, and why their state minimum liability coverage was not enough. Specially people that live in city’s where you can’t drive a mile without seeing a high valued car.
I found that very few people cared about being protected and mostly cared only about price, until they had an accident that is.
I believe that having an independent agent is a great idea. I had my agent for many years and was pretty happy with his service. I always valued his input and had many policies with him.
I believe having an agent is the way to go, but many people care about price and price only and that’s where the direct writers are making their money.
For every phone geek employed by Progressive, GEICO, 21st Century or others that offer advice on coverage, there are 10 who don’t. I have talked to people that have bought online or phone and they all told me they were sold a price with almost no options given unless they asked for it specifically. It was pretty much bottom line selling. Allstate buying Esurance is going to find out about geek buyers. They are the most disloyal customer that they will write because these people shop for everything online and they will change in a heartbeat for a price. Nice to know that we have customers who give us a chance to requote if the cost goes up.
Also, Their TPA is Safelite… Yikes
Mr. Solvent,
I now have a P&C license and want to get into the insurance business.
After reading many of the comments and I’ve also put together some financials; I am still confused on how you can make money in the insurance business.
Are most commissions averaging 10%? In other words if you reach $3 million in premiums (Allstate or any other agency) will the agency only have $300,000 to pay its bills?
When would an ‘owner’ get paid if you have all of this high priced ‘new producer’ talent?
Am I missing something or is it money lost?
Jackie, If you are lucky enough to have a father or mother who owns an agency, they will make sure you are funded while you are learning how to sell and renew business. If you are not, you will have a rough time making a living and will have to really put a lot of business on the books. A typical Homeowners policy pays 15% to the agency. A $1,000 premium =$150 to split between the agency and the producer. 40% to the producer = $60. Do you see now how much business you would have to produce to make a living? The good news is that after you have put a substantial amount of business on the books, you get renewal credit plus new business credit. You will not make a decent living until you reach $1mil business on the books.
Are you allowed to refer clients to an independant agency if you can’t offer them insurance?
That is really all a captive agent can do if they cannot offer coverage. It is also one of the big disadvantages of a captive agent. They don’t have anywhere else to go if coverage cannot be extended. Your best bet is to go with a large independent agent with many markets. You can generally find coverage with someone instead of having to refer to another agent.
Yes, when you become a State Farm Agent, just open an INDEPDENDENT AGENCY “on the side” like ALL of the SF Agents in FL and other states… Then, if AUTO underwriting says “NO” or if the LIFE INSURANCE PRICE is A BIT TOO HIGH, just write it with your INDEPDENDENT. Also, if your Agency Field Executive starts to push to hard for Life production, or Bank CD’s, or if your loss ratios become a problem, just let your AFE know that you have an INDEPENDENT AGENCY “On The Side” and you would be HAPPY TO ROLL ALL OF YOUR MUTUAL AUTO, LIFE, HO etc… busness to it if they don’t LIGHTEN UP on you… And, here is the BIG BONUS, when you retire from SF, after you receive your 12 MONTH RETIREMENT PAYOUT, just start CALLING ALL OF YOUR OLD EXDATES (they will only be a year old) and START COMPETITING for the business and take it away from the SF agent that replced you or that your book was 4521’d to. Your INDEPENDENT AGENCY “On The Side” will be established by then… so it will be EASY TO HAVE YOUR STATE FARM CAKE and… EAT THEIR LUNCH TOO!
EVERY STATE FARM AGENT should have an INDEPENDENT “ON THE SIDE” to LEVEL THE PLAYING FIELD with BLOOMINGTON. No need for the “NASFA” or a UNION, the most powerful advocate for YOU as a STATE FARM AGENT ANYWHERE IN THE USA is… AN INDEPENDENT AGENCY “ON THE SIDE”!
Wow Omni. Hard for me to believe that State Farm would let any of their captive agents have an Independent “on the side” to siphon business away from them. These people didn’t get to be the largest domestic carrier by being stupid. Perhaps they are making allowances for Florida since there are unique challenges there, particularly with the hurricane exposure.
Agent, Wake up and smell the “Independent Roast”! Unless you are trying to “cloud the coffee”???? Surely, you know that Corporate has allowed the FL SF Agents to write NON RENEWING HO POLCIES with a handfull of non AM Best rated carriers to appease the State of Floirda’s Insurance Commissioner as too much State Farm NEW HO and Non Renewing BUSINESS was being written with CITIZENS the market of last resort, not the market of FIRST CHOICE for SF Agents. HOWEVER, that is NOT good enough for most of the FL Agents, they have taken that Corporate Consession to a much HIGHER LEVEL which could and IS much more damaging to State Farm’s CAPTIVE model… MANY have INDEPENDENT AGENCIES “On The Side” RIGHT DOWN THE HALL or IN THE OFFICE ON THE NEXT FLOOR or DOWN AT THE OTHER END OF THE BUILDING… This is ABSOLUTELY EMPOWERING to the SF Agent with the INDEPENDENT “On The Side” but it is MORE THAN A SLAP IN THE FACE for EVERY LOYAL SF AGENT that does NOT have an INDEPENDENT “On The Side” irrespective of what state the SF Agent operates in. An INDEPENDENT “On The Side” is a continuation of the prostituion of the State Farm Culture of Quality and Loyaly to the CAPTIVE agency system. Obviously, the SF Agents in FL were able to use the HOMEOWNERS line as a LOSS LEADER for many years (decades) to get to that highly sought after MUTUAL AUTO BUSINESS… That HO business SHOULD have been MUCH MORE CLOSELY UNDERWRITEN as the book is primarily a loosing proposition and much too large in FL. I pitty the FL SF Agent that only submited QUALITY Homeowners and BOP risks, THEY SHOULD HAVE PROSTITUTED the company like the majority of their colleagues. NOW, that prostitution continues in as much as… Many SF Agents have an INDEPENDENT “On The Side” to WRITE and POTENTIALLY ROLL quality MUTUAL AUTO BUSINESS and LIFE Business for LOWER RATES with other carriers… What I would like to know, and you should too, unless YOU have an INDPENENDENT “On The Side” is will BLOOMINGTON (in writing) FORMALLY ALLOW its FL AGENTS and ENTIRE CAPTIVE AGENCY FORCE throughout the country, to OPEN INDEPENDENT AGENCIES “On The Side”? Because, if it is ok for some, why not all. And, if SF Corporate will not allow INDEPENDENT AGENCIES “On The Side” will they then TERMINATE and 4521 the books of business to the waining LOYAL SF AGENTS with NO Indpendent’s on the side? This would be a VERY good idea RIGHT NOW in FL as a DEFENSIVE manuver as my guess is that many FL SF AGENTS are CURRENTLY MOVING and are POISED TO MOVE ENTIRE BOOKS OF MUTUAL AUTO BUSINESS and “Stick it To The Farm”. The only way to retain the integrity of the SF Captive Agency model is to HAVE A CORPORATE CONDONING or CONDEMNATION and CONSEQUENCES.
What Say You?
A.JOHN
I am glad I am not located in Florida trying to deal with these issues. In Texas, we have our own challenges, particularly in the coastal Tier 1 & 2 areas where the Windstorm association is actively involved. The Standards have issues with business in those areas. Texas also is a weather state and many carriers have a hard time making a consistent profit on HO since hail and wind can be devastating.
I saw an article yesterday where Allstate CEO Wilson said he had received enthusiastic support from their agents for the changes being made. Hello! He has a rebellion in full swing with possible unionization and he thinks the agent force is supporting him. He sounds as tone deaf as our politicians in DC. Allstate will get what they deserve with this kind of leadership.
REALLY YOU AGENTS HAVE FINALLY WOKE UP? YOU THINK THAT WILL WORK WITH ALLSTATE?
Why not? Rather than JOIN A UNION, let good old fashioned “free enterprise” LEVEL THE PLAYING FIELD. If you are a so called “CAPTIVE AGENT”, realese the BONDS OF CAPTIVITY by OPENING AN INDEPENDENT “ON THE SIDE”. Seriously ALL of the STATE FARM AGENTS in FLORIDA have INDEPENDENT AGENCIES “On The Side”… Well, probabl not all, there may be a few LOYAL “Shmucks” that still honor their contract with Bloomington and think that the INFEDEL AGENTS with INDEPENDENT AGENCIES “On The Side” may be subject to TERMINATION if BLOOMINGTON Discovers them, but… BLOOMINGTON OBVISOULY CONDONES the Independent “on the side”, not just the FL HO Markets that BLOOMINGTON allows for HO CAN/REWRITES… I’m talking about FULL BLOWN INDEPENDENT AGENCIES “On The Side”…
Wow, this is a hard one…who to root for?
ALLSTATE VS UNIONS…
it’s kind of like the devil vs megadevil…no offense to their agents, but their company has long been one of the more crooked examples of free enterprise known to mankind…
and then there are unions, which stifle growth, and actually reduce employment in the name of creating jobs, not for people who work with a company, but from taking dues and creating worthless jobs with the union itself…
So in one corner, Megaselfishstate…the greased hands people…
VS
Unions…be sure to ask for them by name…willing to stifle growth and manifpulate any election necessary to get “card check” into law…because no right thinking person believes an union will help them save their job…so trick someone into being muscled into ‘unionhood’…
Good luck to the agents and hope you can find ways to remove yourself from Allsnake.
Omni’s solution is better than unionization. These guys should seek to go Independent rather than trying the union route to force Allsnake to do the right thing. Perhaps Allsnake really wants to be another Progressive and deal direct as evidenced by the recent purchase of Esurance. They basically threw their agents under the bus and I don’t blame their captive agents for being upset since their commissions have been cut among other things.
Allstate, State Farm, Nationwide – they are all drive-through window insurance companies where “millions” are served low quality insurance. You wouldn’t have your wedding reception at McDonald’s, but millions buy low value insurance from the one-name agents who know nothing outside of their limited portfolio of products, and have no knowledge to differentiate why there products are substandard, and most don’t even know who ISO is.
When an agent grows up, they need to make a choice: Do they keep peddling policies based on price aided by the company’s cheesey commercials, or do they provide a professional service using the best tools available? That requires being an IA.
Market, I think you hit the nail on the head. You can also add 21st Century, Progressive, Farmers, GEICO to the list of advertisers on the cheesy commercials. They are after the entitlement/non thinker bunch who think you can get something for nothing. People that buy insurance falling for a line are asking for trouble in the long run. IA offers actual advice to people on their protection needs. Hopefully, we will see an increase in market share when the dust settles from the captive agents mess we are seeing with these markets.
In our current high performance environment, all companies demand “expected results”. That’s what delivers “expected results” when we open our paychecks. A fair trade.
It is the carriers responsibility to provide the products and filings to be competitive in the market place. Allstate is not currently very competitive in our area for Home or Auto. They resort to quoting less than Replacement Cost on HO and lower limits and missing coverage on the Auto. The customer often don’t know what their Allstate agent left out and are shocked when we point this out to them.
I see where the Allstate agents voted to do their guild/union to deal with management. It will be interesting to see how all this shakes out. The net result will probably be fewer Allstate agents and more Independents created or joined with other. I think Allstates volume will fall off when this business starts getting moved.
The CAPTIVES cant control their agents. If you are a loyal captive agent, working hard within the captive guidelines, and you do not have an INDEPENDENT AGENCY “ON THE SIDE” to roll ALL of your business to (if you and corporate have a disagreement) You are a SAP. I feel sorry for the loyal agents within State Farm and Allstate, etc that DON’T have an independent “ON THE SIDE”. They are FOOLS. Apparently the captive carriers don’t know or don’t care how vulnerable they are when their captive agency force has Independent Agencies “On The Side”… Those “On The Side” Independent Agencies become PRIMARY real quick and make a MOCKERY of the captive agency system and all of the remaining (if any) loyal captive agents!
I am 36 year retired Senior Account Allstate Agent. who retired early at age 55. We had similar issues, that made us hire a labor lawyer,to present our case. We won the case, and was compensated. There is hope, if u unite, and hire a good labor lawyer. Good luck. R u in GOOD HANDS?