Thread regarding Allstate Corp. layoffs

Allstate treats agents like c-rap. They hire criminals to write garbage for enhanced $$ to show short term growth. Move to 2020 they are now handing out allstate shingles to the independents for higher commission while EAs get beat up to death with uncompetitive rates.

I know a lot of good agents and a few bad ones. Ultimately, if we can drive the prices down then agents in general will be able to sell more value versus worried about Allstate’s lack of appetite via price. Sure, every carrier wants great credit, new house, and a $1M 401k rollover but you can’t grow that way. We have to be more aggressive and more risky which is not something Allstate likes even with expenses lowered. Does Allstate (aka Tom Wilson) want to grow but with less profit and more investment? Probably not in a big way but that’s what it is going to take to catch up to the GEICO/Progressives of the world. We don’t have the systems in place and haven’t made the investments needed to handle this type of lay-off (just taking ethics out). If investments were made 5-10 years ago then we might be ready for that but we decided to buy back stock. This will probably end up in 2-3 years with Allstate hiring a bunch of people back. They keep saying it but I haven’t seen anything that makes me think their blue ocean strategy will work. Progressive is moving to fast for us to simply use their 5 year old handbook.

Most of the direct business is poorly written claim nightmares. Allstate can have that business while it is sinking more and more

In my regular experience with Allstate agents the majority of them I deal with don't give a flying leap about educating their current and new business customers on the policies they are selling. They even reject us trying to help them with talking points and training for them and their LSP's on this. In fact many of these agents themselves have no clue in what they are selling or much about insurance. Fact is many, not all, but many agents just want to get the policy bound and the down payment taken. Then they hope the policy sticks on their books by some sort of dumb luck. Many of these agents are akin to used car salesmen and do not provide the level of education, service, and interest in their customers that they claim to.

Interesting thought on the direct channel/online. GEICO does it as good as anyone and yet if you get a quote from them you really don’t understand what your are getting unless you already know insurance. Their technology is still not good enough to immolate a good agent, but might be better than a bad agent. The problem isn’t the agency model in general but rather who is your agent and what carriers they have access too. Also, the fact that an agent can’t help influence a claim or help someone out in an ethical way falls back on the carrier in not creating a channel (or eliminating)/process to do so. Do you want a good agent in your corner to help explain coverages and advocate for you in a claim? For most people the answer to that is a resounding yes. The industry is moving away from EAs and toward IAs/direct but still 50% of premium is with captive agents. I think Allstate will follow suite and eventually turn EAs to IAs like Nationwide once their products are competitive enough to be sold in that environment consistently. Maybe in 30-40 years we will be telling agents goodbye but it won’t happen anytime soon. Honestly, do we really want small businesses to be eliminated while increasing profits of large corporations? Eventually they are going to have to pay a lot more in taxes to pay for all the social programs needed because the have eliminated all the jobs.

Considering corporate is undercutting their own agents with lower rates bound through direct channels and the revised tighter sales requirements and lower compensations agents are slowly being squeezed out. Combine that with the elimination of services and support to agencies. It may take several years but the eventual move to full direct and agency elimination is now in motion.

So here's the problem:
If Gud Hans gets 90% of their sales through captive agencies, then it seems like agencies are irreplaceable...

But what % of new policies industry wide are sold via agents? What was the % 10 or 20 years ago? What will it be 10 years from now?

It's like having an airline 20 years ago that didn't invest in online booking and instead relied on travel agents. Would that airline have survived or would they be a trivia question like TWA or Eastern?

Oh, and in my experience agents are more than useless when you have a claim (and pretty much all other times)

Not really. Agents are a thing of the past. I saved several thousand dollars a year going through Geico. I will never use an agent again. When I needed help, I was able to go through customer service. It's all about technology driving efficiency. Geico has a really good business model that is technology-laden. Most of us do not need an agent when so many things can be done online. Also, with more people working from home and less on the road, nobody really needs an agent or a robust insurance plan.

Plus not many people drive anymore. My agent at my previous insurance company (similar to Allstate but worse than Allstate) was useless. Only time she returned my calls and emails was when I terminated my plan (and I had to go through customer service to take care of that). I honestly was so glad to have taken my business elsewhere and saved thousands.

But I agree that Allstate is not treating you well, At the end of the day, a company will throw away their employees to stay afloat. That's the reality everywhere. The point I am trying to make here is please move on to a different career while you can. Take an online class to improve your skills and work a different job. I do not think Agents (at least not like past Agents) has a role in future Allstate model. Businesses are slowly (or quickly) phasing them out. Also, not like people have much $ to spend these days. I would rather save thousands and talk to customer service than some Agent who would give me the same lip service (although in my case, my agent was not helpful and only succeeded in pissing my off). But that's just my opinion.