Thread regarding Allstate Corp. layoffs

@211 No announcement in February. No Town Hall on the schedule for March (yet).

@211 2026 announcements were spot on... we will see if your 2027 predications come true. hopefully, there is good opportunity to earn back the reduced commissions.

@219 what makes you so sure? They just showed a graph at agency conference where the Allstate revenue was up over previous along with other new revenue. Wouldn’t they be open to litigation if they were so far off??

Within 18 months there will be a fraction of the current EAs still in existence. This is the purposeful strategy. So you either are a substantial and diversified agency that can flex with the evolving model, or you are selling back to Allstate at 1.5 X. It’s as cut and dried as that.

Allstate leadership has stated the 2027 compensation structure will be announced in Jan/Feb. of 2026 and agents will have a full year to prepare for the changes. Typically, the company announces the upcoming year compensation plan in Oct/Nov. with a January or March implementation date, which tells you the 2027 changes will be significant.

Rumors are the changes will look similar to what Farmers announced with renewal commissions being reduced to 4% to 5% (a 40% to 50% reduction) and new business commissions being reduced to 10% (from current levels of 25% to 30% when hitting your Variable Compensation goal). The company will then give agencies an opportunity to earn back higher commissions if they achieve certain new business, retention and bundling goals set by Allstate. The lower renewal commissions will basically force most agencies to utilize the Allstate Customer Service Center because the cost of retaining service staff will be nearly impossible to absorb. Allstate will provide agencies with AI tools to help them service the work as justification for the lower commissions. Many agents believe that agencies under $15M in premium will struggle to survive and only large agencies who can generate a large flow of new business will remain. This will likely drive many agents to sell their business back to Allstate (TPP) at low valuations (1.5x earned premium) just like cheap stock buybacks. This will allow the company to get more direct control of the premium that was previously “owned” by agents as part of the independent contractor exclusive agent agreement. Instead of paying an average commission of 9% to 12% a year to agents, they basically get it back for 1.5X earned premium and then pay a yearly 2% service commission to an EA or 0% commission if handled thru the service center. Again, these are just rumors/speculation, but hearing this from a lot of different sources. The 2026 compensation changes will be announced next week and those changes are expected to relatively minor and for the most part consistent with current 2025 compensation plan.

As an agent, if you listen to a collection of the agency conference, earning calls, and local meetings you will realize this simply isn't true. Allstate agents still have a strong future here and they will continue for the foreseeable future. The leaders are VERY careful with their words (especially Mario and Tom) so it helps to go back and dissect what they are saying and what they are not. #1 They see Allstate agents as foundational to their future and are planning around us #2 They need retention help and pricing elasticity assistance through relationships and going deeper in the household (not something a call center/AI bot can yet do). #3 We are writing 1/3 of the business at Allstate and managing at least 75% of it including brokered business. Further, there is a reason you don't see profitability being split out by segment as the EAs and IAs are simply more profitable. EAs blend the good of the direct channel with a lot of the good of the IA channel. With 2025 commission cuts it is no longer possible for explosive growth in month states and in most scenarios without going into significant debt which is why I think the next play for Allstate is to increase competitiveness, increase other profit drivers in agencies (ivantage), and rebuild relationships with their agents. Within the next 12-18 months I think you will see Allstate accelerating bettering the relationships with agents as the culture as currently no trust exists (as Tom said himself). There is going to be a lot of moment here as they still "need to continue to adapt" which leaves them in a place to likely pi-s a lot of agents off. Further, IA opportunities in all states will start to rebuild from an all-time low and pressure the EA opportunity to strengthen (business and relationship). A lot of EAs would transition to IAs as only the best ones are left now IF the opportunity existed which mother Allstate has not yet had to really compete with. Allstate got caught with their pants down in the past and I don't expect it will happen again. After 20 years...who knows where all this sh*t is going.

I have to agree with the statement EA offices are not going away any time soon. During the earnings call it alluded to new product sales were "almost evenly split" . That means it hasn't surpassed EA offices becuase if it did they would be bragging about it all day lol. Please remember Allstate has not only sold Allstate products like for example Amica. Allstate due to it';s strick underwriting has been using expanded markets ( plcaes the don't risk losses for shareholders!) in many, many states. There are states you don't even know that haven't added Allstate homeowners paper since 2007. They are written with from Homesite to American Modern to Pacific Specailty. Some don't even carry Allstate auto due to no multi discount. The fact is it's not like Allstate can have a call center take over hundreds of thousand of home insurance that are brokers with outside companies. It will never work and the insureds will be gone.

@1pb It bothers me! What more do you know about AI? Is it intended to replace agents and agency staff?

So it doesn't bother EA's that AS announces their new generative AI program for handling a myriad of tasks aimed at elimination of human labor and has the wherewithall to call it "Agentic AI"?

Pass me a salted donut while I watch this go down.

Full of sh it.
Agents have the biggest book of business compared to the call center and web. The problem is how few physical offices there are especially in more populated areas.

Many EAs have I’ve invested hundreds of thousands and in come cases millions to buy their agencies and many owe that. If this is just speculation and fear mongering, I don’t appreciate it. The situation is stressful enough as it is. If you are aware of future plans for the EA distribution channel, please share more detail.

@OP Please expand. What is in the works that you are aware of? Thank you in advance for the heads up.

@q6 What is coming for them?

I don't think OP means Exclusive Agents will be "gone" in March '26. But from what I hear a lot of them will wish they were based on what is coming for them.

Is this for the "800 plus agents that are on the last legs" as commented on an earlier post?
Many agencies are failing to meet production goals is the common thread, or is this something else? A bigger game plan by Allstate to reduce office footprint? Please expand.

Eyes on everybody. Allstate can make crazy moves at times. 'Security is key...' get rid of Security; 'we're rolling out Scrum Master courses' , then get rid of SMs. Don't bank on your performance review history saving you, if you're wrong team at wrong time, you're gone.

Not saying this to scare people this is just reality of where we and industry are at.

@an I do not know about your area, but that has not been our experience. The new product rates have not been competitive at all in our area. The only people we've been writing are extremely old and haven't shopped in 40 years. Few young people are in our book of business or shop for Allstate. Why would they when Progressive almost always beats us and the kiddos use apps to compare prices? Once upon a time, we had 8-10 EAs in our area. We are down to 3, and one of these is under threat of being closed because business is so slow. Even the highest-selling EA is not making numbers. The ZIP codes in our immediate area took horrible rate increases, whereas more urban areas took decreases. This is forcing everyone to go after the same pot of customers. I agree that brick-and-mortar won't be gone instantly, but I believe Allstate is heading to a more regionalized model with fewer local agents in smaller towns. It is all a matter of time.

EA's, FOC IT , and the rest of project management.

@an What you lay out is all logical and necessary to run a long-term viable business. That’s where we were. That is no longer where we are. Some people know, many more people sense that we are about to do illogical things to deliver a record profit year for Tommy. He will go out on a high note. What comes afterward……I pity us all.

Care to elaborate? Allstate has helped EA offices promote and sell the new auto product with ease as far as rates go. the tech side has been more bumpy but nothing extrordinary. There are thousands of Allstate insureds with products that go back 40 years for personal lines. They are managed and serviced by EA offices as the clients expect. They will not abandon the model at this time as it would be a huge hit if they left. Trust me when I say that they depend on EA offices. Also be aware many EA offices have seen a sure in activity and sales with the new auto product. You may think younger don't want or need a brick and mortar office but as the companies shifted much service and sales to offshore offices, many younger clients have flocked to the brick and mortar offices for a real person. Allstate was built on being in good hands with a local agent at your disposal. Young and old still rely on this model. They do espically more now due to the way the online sales and offshore service has not been able at times to live up to the same expectation. Sometimes you need someone to help you purchase to protect yourself and family. Many online and offshore sales have left insureds to find they had 250/500 at SF and now have 25/50 as an example. Or you needed to select a $0 cost option to include comprehensive with glass. Those are just a couple of examples. There are many more. So do tell what more EYES than there are already on EA offices are there?