Assessments still going as planned however how they can be used legally and ethically still being reviewed and debated within Allstate legal and executive level. If and how they will eventually be used to be determined. These assessments are 100% third party created by the way.
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Last time I checked direct sales could not sell a life insurance policy to a person dying of cancer! If you are getting rid of the EA’s kiss Allstate Life and Retirement (ALR) good bye! ALR is a pure Agent/Client relationship sale. Last time I checked ALR accounted for 10% of revenue. I am going to enjoy watching Allstate direct try to achieve an 88% combined ratio! Tom Wilson was a failure when he tried to do it organically and he struck out with 10 years of losses of Esurance! The only thing Allstate direct is going to do is strengthen the Progressive and Geico brands. IA’s will not tolerate the ignorant behavior of Allstate sales managers. They will be promptly shown the door if they try to cut commissions or attempt to do predictive alogarithm pricing on renewals. The average IA enjoys a 95% agency retention ratio. IA’s have the ability to satisfy their customers by getting them a fair rate for their P&C needs. For the record, the average Allstate EA probably has an 89% retention ratio. Tom Wilson and Glen Shapiro do not Care about retention. They care about stock repurchase plans and short term quarterly returns. The Nat Gen combined ratio is about 92%. That is 3% below Allstate goals. The only way to fix that is raise premiums. You will start to see some attrition happen immediately with the shiny new Nat Gen book that Allstate purchased. As stated in previous posts, NAPAA has been useless as a trade organization. However, push is coming to shove. If they can organize some legal action against Tom and Glenn things can get interesting. Moreover, NAPPA MUST shed some light to Wall St. analysts of how commission cuts have negatively affected marketing and servicing at the agency level. Stay tuned, NAPAA is conducting their own agency relationship survey to give the true pulse of Allstate sales force. At the very least it will show the hopeless growth prospect that exists at Allstate. In conclusion, even though the direct sales organization will be priced 7% less than the EA price structure that puts direct 13% higher than the market. Sprinkle in some the Cave man actuarial pricing and underwriting guidelines that is practiced at Allstate and an investment department that is light years behind Geico, things do not look good for this once proud company.
EA is being slowly eliminated. Wait until sales goals come out for 2021 and R3001 is revised for compensation. Only about 20% of EA's will sniff the goals and with far less compensation. Also agency services being rolled into CCC gradually all proof of the eventual goal of primarily direct with focus on low compensated IA's. EA's don't even realize that when they call ASIC that half the time they are now talking to CCC while IA's now have more specialized service means. Not to mention the new discount if customers bind with the CCC instead of agents. There could be no more writing on the wall. 2022 is target year for total EA elimination.
Why two different rates? Allstate is not only downsizing corporate employees but strategizing to purge agents in a cost effective way in a very quiet and strategic effort to go 99% direct sales.
Offering two rates undermines EA agents by intentionally making the playing field unfair which agents really need to come together and challenge in court. This maneuver is purposely forcing Allstate direct sales and Independents to compete with its own EA agents for the same pool of potential customers.
With the entire industry’s growth driven on price rather than value, as acknowledged by the Allstate executive team, two separate rates will eventually create unattainable goals to be met by EA agents as the pool of customers become less and less while the direct sales and independents become larger and stronger. This unfair internal competitive rate differential will result in agents being suspect to meeting ABO requirements which ultimately ends up as a book of business gift to Allstate.
Side note: Anyone else notice the new marketing not mentioning contact a local agent? Marketing is also in sync with purposely undermining EA agents as well. Marketing omits the mention of a local agent and places the emphasis on calling Allstate.
I also thought that the loss of EA marketing money and reduced commissions were going for rate reductions and stronger marketing. When our we going to see it? All I know is we continue to get newsletters about rate increases. Truth is, Tom, Glenn, and the rest of the dog and pony show frickin lied to all of us EA agents and now they’re screwing with corporate employees livelihoods too.
In my gut, I believe Allstate has had a private strategy in place at the CEO and board members level to implement a legal but unethical practice of purging agents.
If the future goal is to minimize agency force by expanding the independents and direct sales then Allstate should exhibit some class and TPP agents at 100% vested and at the market rate for a book of business.
But why wouldn’t they do this? My TSL told me that it would be financially impossible to offer a buyout for all the agents. Think about it. Why do something ethical when you have a unilateral contract that can be changed at any time to the companies advantage? Wouldn’t you implement a strategy to legally steal books from agents by reducing commissions, increasing self competition , ex. Direct against Agent in an effort to financially weaken EA agents to the point of default?
What I would like to know is when In the hell are the spineless EA agents going to finally stand up to Allstate and say we have had enough. See you in court!
One last statement about the previous posters comment about direct sales versus “nasty” agents. You don’t know what the hell you are talking about. I have done both and from that experience I have seen bad things done on par in both sales arenas. However, I will admit that direct sales s—s as a job. 8 hours of nonstop calling and working in a “sweatshop” environment under constant corporate scrutiny and pressure to meet company goals. It’s no picnic. Most of you won’t last 6 months in the job as well as your ethics and value system pushed to the brink of being broken. Good luck.
Home Office people are just waiting for the hammer to fall. Now going on 35 days. It's terrible that they've had no communications in so many areas. This plus worrying about the Wuhan virus is enough to drive people crazy. Very poor way to treat the employees they say they care about.
If the paying customer can get a lower new business and renewal rate with a Direct Sales representative than an agent, yes Direct Sales will have higher new business and retention results. The bigger question is WHY two different rates? Most agents do exactly what Allstate demands that they do. Starting back in the 1980’s when some agents PAID for ALSTAR. Then agents had to pass the series 6 and 63 licenses so they could be “financial advisors”. Then Allstate “captive” agents had to deal with knowing Allstate IAs were paid higher commissions on new and renewal business. Some agents may be unethical and exhibit “petulant whining”, but the facts are still the facts. And in some cases when leadership was made aware of unethical practices, leadership did nothing because at year-end they wanted to be the top region, or win the trip, or add “a few pennies” to their Field Sales Bonus (FSB). “Tear up the R3001 (contract) and let the nasty agents go on their way.” Your words, ok. Their is enough whining and unethical activity to go around to everybody. No one is exempt. But agents are so good at selling, not only will they sell an early used 2000 vehicle, they’ll sell a new 2021 vehicle, and then sell the auto insurance as well.
It is a fact that corporate direct sales and new business has been far more ethical. accurate, and stays on books longer than agency bound business. Agents play used car salesmen to try and get a few pennies of compensation while pressing unethical and negative experiences on our customers. Agents failed miserably at being "Trusted Advisors". Agents have scammed and cheated their way into being expendable with the eventual move to direct and the lower compensation level IA focus. More cost and manpower is used in Allstate corporate handling the agents' petulant whining over compensation and assignment than it and they are worth alone. Tear up the R3001 and let these nasty agents go on their way. There are plenty of early 2000's used cars that need sold.
Personally I would reduce both sales and claims areas to start.... right after I gutted the executive group.
I will offer my insight in regards to Sales. I too agree that Sales is a very important area for Allstate or any insurance company. Without Sales there are no policies to file a claim on, and no customers calling, and no need technology support. Sales IS the key to any successful insurance company. However, with that being said, Allstate has A LOT of layers of Sales leadership/management roles that needed to be revised or even eliminated a very very long time ago. Is there a need for a Regional Sales Leader (RSL) to oversee the Territory Sales Leader (TSL) who oversees the Field Sales Leader (FSL) who oversees the agent? NO. The RSL, TSL, and FSL are on a regional level. This does not include the layers of Home Office Sales leadership roles. There is no NEED for that many layers of Sales leadership. And I’m in Sales. There are thousands of people in these roles at Allstate. With that many people in those roles to ‘support’ the agent, how did we (Allstate) slip all the way from the #2 spot in auto market share to the #4 spot? Also, especially on the Allstate Independent Agent (AIA) and Encompass side, there is a lot of redundancy. I am not advocating for a reduction in force, especially not now. However, if Allstate is to try and compete with GEICO and Progressive, Sales “leadership”, not the agent, but the leadership has got to be, need to be revamped. Allstate agents know how to sell insurance, and they do it very well. Give agents reasonable competitive rates, reasonable support, less Sales “leadership”, and they will move Allstate auto market share in the right direction, with less multiple upon multiple layers of Sales “leadership/management”.
Reminds me of the movie OFFICE SPACE when they come in to review everyone.
Wish corporate employees had a union about now. They are modeling themselves after GEICO, Progressive, and USAA. The EA's will wish they were better organized and lead by a stronger NAPAA to tackle Allstate strategy of going Direct writing company 100% in the future. NAPAA is caving in to the wishes of Allstate and not the agents.
It's that simple people.
Can't disagree however the clowns running this ship have a reputation of doing the exact opposite of what makes sense if it means a few more sheckels in their pockets and that they can throw at the shareholders. It almost seems deliberate. Remember Tom Wilson ran Sears into the ground and Glenn Shapiro ran Liberty Mutual into the ground before they slithered here and both made millions upon millions with those ventures. If they can leave here with millions more they don't care about the smoldering heap and ruined lives they leave behind.
It seems like thru all of it, claims and sales is getting slaughtered with these layoffs. I say that because those two departments keep getting a lot of attention/mention on this forum. It is puzzling to me and probably a lot of others on here. Wouldn't claims and sales be the departments the company would want to preserve and focus on transforming in a way that benefits Allstate's market share? Outsourcing and reduction in force in these departments seems way more harmful than beneficial in this situation. These are the two groups that customers have to deal with whether shopping for a policy or filing a claim on their policy. Reduction or elimination in either of these groups is downright foolish for customer retention. Change my view!
This whole process has been nothing but a confusing mess since Wilson opened his big yapper on that June 11th call. This has been a screw up of epic proportions & doesn't seem to be getting any better.