Starting or Purchasing an Agency with AllState

[Orange22]

Hello! I am in the process of getting appointed with Allstate. I am being offered an office in the claims center for two years- scratch agency. I am a little nervous because at my current job almost every other cancellation we send out is to Allstate. The other problem is that they cut down their commissions to 9%. My fear is that Allstate prices wont be competitive relevant to other insurance carriers and writing new business would be extremely difficult.

What is the average number of policies an average Allstate agents writes?

 

[xrac]

Hello! I am in the process of getting appointed with Allstate. I am being offered an office in the claims center for two years- scratch agency. I am a little nervous because at my current job almost every other cancellation we send out is to Allstate. The other problem is that they cut down their commissions to 9%. My fear is that Allstate prices wont be competitive relevant to other insurance carriers and writing new business would be extremely difficult.

What is the average number of policies an average Allstate agents writes?

I do not know the answer about average number of policies. However, you know the issue of cancellations and the drop in commission. My understanding is commission level is dropping to 8%. All it may be is sour grapes but here is a link for the RunningClock archive. November « 2011 « Boycott Allstate

 

[nyc2phi]

how can someone run an agency with overhead on 8% comm ?

Do they offer any kind of bonus, profit share, or other perk ?

 

[Guest]

We are the #2 agency in the Northeast Region of Allstate and I can certainly speak on the matter. DO NOT BUY INTO OR EXPAND WITH ALLSTATE AT THIS TIME. To go the scratch route will be suicide (do not let the FSL pitch it any other way) You will make essentially a 10k bonus if you hit 2.5x baseline, 44% commission commission the first 6 months which then ticks down to the standard 10/10 after 3 years (IF YOU ARE HITTING 2.5X BASELINE) You also get a per policy bonus but trust me...trust me...trust me...DO NOT DO IT. Here's the next best part...

Allstate has RFG (resources for growth) which is their current way of evaluating agencies from everything to keeping your contract to a sliding NB/RENEWAL commission scale. That's right...in 2012 your NB commission will floor at (it's rumored) 6% and same w/ renewals. It's currently 10/10. If you max RFG (only 10% of offices will) it will shoot to 11/11. Otherwise they are only slashing. Guess what RFG IS? P&C rentention, P&C growth (policies in force over previous year) LIFE/FINANCIAL production and "ALI." Now what is ALI you ask? AGENCY LOYALTY INDEX. The newest anal raping device from Allstate. Policyholders (selected at random...or so they say) get a 3 page survey from Allstate asking a handful of questions. Only 3 questions apply to your agency (how likely are you to renew, how satisfied are you with your agent and how likely are you to refer your agent) The scale is 1-5...if they don't answer a (5) which is the best...your LOSE. Next best part...insureds are killing us on this survey (afterhours call center speaks broken english, why should i pay my deductible for a hit and run non fault...my agent isn't pulling for me (in that hit and run circumstance) why did my premium go up etc... WE ALL KNOW THE INEVITABLE GRIPS OF INSUREDS and guess what? on that survey these insureds hold OUR OFFICE to these unavoidable common day personal lines service gripes. And allstate is coming down w/ an IRON FIST. We hire telemarketing companies to call every insured at every renewal, we call every insured with a claim, we do everything we can do. But when your company claims service is run by abu in india....your insureds policy increases and our web program says "unable to identify reason for premium increase" and there is no support...that survey is going to hammer you. They are shutting down 30% of agents in 2012 based off this ALI. Scratch office will need minimum of 18k life/afs production (ok shouldn't be a problem) and after that you are looking at 40k+ life production every year just to NOT LOSE POINTS in that category. If you can buy a book that cash flows (2mil or more)...has an unrealistically low loss ratio and the seller will sell for 2x or less....OK MAYBE....MAYBE. But trust me...this company is wicked, ruthless, sinister and you will have 50% of your agency running on un-controllable "what if's" I would pursue other carriers. We have earned phenominal income over the years and we cannot complain for that..but moving forward it's just not what is used to be. We are that TOP agency that the FSL will show your OUR results and pitch how well off you will be after years of growing your book. Run my friend....xyzN
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You need to look at the PIF trend over the last 5 years...you must look extremely hard at the loss ratio and ALI. Retention...well obviously. Look at the overall % of AIC, APC, AFCIC, INDEMNITY and other line 10 PIF. Older AIC retains well but your sitting on over priced premium, etc. If the ALI is 70 or below on an existing book RUN. If the loss ratio is over 55 RUN. Interview the EFS's in the market and when that's all done....find the nearest brick wall....bang your head off it and shame on you for even considering Allstate.

WOW.... This is probably the most informative post about Allstate that I've ever read on this site, and there are lots of them.

It amazes me that these captive companies are making it impossible for their agents to succeed. I don't understand why they are restricting their own growth. Maybe the industry is wanting to move all agents to employee/W2 positions like LM and eliminate independent contractors?

This makes me feel sorry for the gal that runs the Allstate agency down the street. Maybe I'll start sending her sympathy cards when I take one of her clients.

 

[Newby]

On top of all this, I as the Allstate customer keep seeing adds on TV telling me to check out Esurance.com by Allstate for even more savings. Isn't this just the company using the brand the agents built over many years trying to sell me direct and cut out the agent?

 

[todd02]

On top of all this, I as the Allstate customer keep seeing adds on TV telling me to check out Esurance.com by Allstate for even more savings. Isn't this just the company using the brand the agents built over many years trying to sell me direct and cut out the agent?

Lmao I was pissed (farmers agent) about us competing with 21st century when my company bought them. But you don't see our 21c commercials saying owned by Famers. That's freaking stupid they would say that lol

 

[nyc2phi]

Do other captive companies get access to their subsidiaries ? I know esurance does not have agents but what about companies like Nationwide which owns Harlysville ?

I am with Liberty and we own Safeco, Ohio Cas, ect. but I do not get access to anyone but Liberty

 

[xrac]

WOW.... This is probably the most informative post about Allstate that I've ever read on this site, and there are lots of them.

It amazes me that these captive companies are making it impossible for their agents to succeed. I don't understand why they are restricting their own growth. Maybe the industry is wanting to move all agents to employee/W2 positions like LM and eliminate independent contractors?

This makes me feel sorry for the gal that runs the Allstate agency down the street. Maybe I'll start sending her sympathy cards when I take one of her clients.

Allstate moved all of their agents from W-2 to 1099 several years ago to X the benefits liability. That is what RunningClock is all about. There is a group of agents who have been engaged in long term litigation because of Allstates actions.

 

[westcoast]

there is a lot to gripe about that is for sure. but tell me another game in town where you can buy a book at 2X pretty much where you want. starting independent just aint happening without a bunch of relationships. (am i right) ? and there aren't any for sale. I agree starting fro scratch it's a no brainer-go indy...
i like the idea of a running start. i built a book in securities, great experience but i would like an easier softer way..

 

[moonlightandmargaritas]

Allstate moved all of their agents from W-2 to 1099 several years ago to X the benefits liability.

New Allstate agents hired starting in 1990 were 1099s (called an R3001 contract). In 2000, the remainder of the W-2 employee (R830 contract) folks (most had started under the escalator at Sears) were moved to 1099 status.