Former Allstater here who worked in AIA. Why does every genius at Allstate who has never worked in the IA or Direct channel spout off such ill-informed garbage about those channels? Allstate is not "leaving the EA space" or "turning everything direct". They are finally investing to compete in all the places customers choose to shop. That's right! Customers make that choice, not Carriers! As of the latest 2019 IIABA Market Share report:
Captive agents (EA's) still write 46.6% (or $153.5 Billion) of Personal Lines premiums
IA channel writes 35.1% or $115.3 Billion of Personal Lines WP
Direct writes 18.3% or $60.5 Billion of Personal Lines WP
"The EA channel has been slowly shrinking for the last 20 years so let's decamp and put all of our eggs into Direct and IA!" said no competent Allstate executive ever because you'd be a total t–d to walk away from the largest distribution channel for Personal Lines (Not that Allstate doesn't have plenty of t–ds in leadership).
To the commenter on IA quality of business- The AIA channel ran a historical minimum 5pt better loss ratio than the EA's selling the exact same products... 5pt minimum and the channel has been alive since 1974. Go grab a Protection Finance lackey and see for yourself. Unlike EA's where every new agent on some version of an accelerated bonus program cannibalized other EA books, and/or shoved every piece of non-standard risk through the system possible via shady/omitted UW tactics, the IA channel actually has Carriers that specialize in non-standard risks so you can perform real UW due diligence and place the business where it will make money (a la Nat Gen).
Don't forget about Expense Ratio! EA's are and will be a dominant force in PL distribution for a long time. It is just a dang expensive model to build up and keep growing when pricing is more transparent than ever and expected profit margins are lower than ever. As recently as 2019 Allstate was spending ~$1.3M per net growth of 1 EA. Unsustainable. Appointing an IA cost them less than $2k. Say what you want about the disadvantages of an IA, but making your investment back is pretty easy on $2k, even when with a c-appy producer. And when you don't have to pay for their leads, subsidize their marketing, help them find/hire staff, and send the best ones on 3 egregious trips each year with the added expense of flying out every SVP in the company first class, the expense side looks pretty attractive too. Even with those higher commissions.
And if you think IA's are overpaid on commissions, try to get yourself a copy of the Big I (IIABA) Best Practices study that details what areas the best performing IA's in the country spend money on in their operations. I'd stack that up against best Allstate EA proformas I saw any day. They actually pay their entire staff a living wage (real salaries and bonus), give them benefits, and have to pay for all the things EA's happily take for granted like third party software, IT infrastructure, and advertising just to name a few.
It's tiring watching an EA rent a storefront, hire 2 hourly people, open a laptop, and be able to write business with a top carrier; and then complain about IA commissions as they sit there with no appreciation about what it takes to open an actual insurance agency where Allstate doesn't hand you everything on a platter for having at least a $100k their 401k that some FSL needing to hit their recruiting goal counted as "liquid capital". Sheesh.
TW is not a total dummy when it comes to running a Fortune 100 company that shells out the kind of dividends the Institutional investors who own the majority of Allstate want to see (76.5% ownership to be exact). And those Institutional investors (e.g. Vanguard, BlackRock, Charles Schwab, insert any major name wealth management firm) are the ones running your 401k's and virtually every other retirement vehicle available, so assuming you have a retirement account, you have likely benefited from all those Blue Chip dividend companies (Allstate included) steadily streaming money back into the Mutual Funds that comprise your nest egg. He's right to make a shift toward making Allstate available wherever customers want to buy it and to have different market price points associated with level of service the customer needs. Unfortunately he chose a shortcut path laden with job outsourcing to poorer countries instead of retooling the existing workforce. I never thought you could make a domestic insurance company who only sells products in our borders feel so un-American, but somehow TW and GS figured it out.