Number of Allstate agents falls to lowest level in memory
That’s down from 9,300 a year ago and 10,400 two years ago, according to filings. The figure topped 12,000 in recent years before beginning its decline.
Even that current number understates the reduction in the once-ubiquitous storefronts with the familiar blue signage across the country. Hundreds of those 8,400 agents work out of their homes as Allstate has encouraged sales reps to use centralized call centers to provide service to their customers.
The 19% drop over the past two years raises questions about the future for Allstate agents. Allstate CEO Tom Wilson has made no secret about his desire to sell insurance and other products through an array of channels.
In 2022, Allstate agents accounted for 38% of new auto policies compared with 71% in 2020, according to the filing. Sales directly to consumers over the internet or phone made up 35% last year versus 24% in 2020. Independent agents accounted for the remainder.
Consumers buying auto policies without going through an agent pay 7% less than they would using an intermediary, a discount that began in 2020.
The association representing Allstate agents foresees the number continuing to drop.
“We see trends going toward fewer and fewer agents on Main Street U.S.A.,” says Ted Paris, executive director of the National Association of Professional Allstate Agents, or NAPAA.
In addition, Allstate has changed its agent compensation in recent years to reduce what it pays when agents’ customers renew their policies and increase what it pays for new business. That’s pressured some agents out of the business.
Still, many agents have responded, writing new auto policies even as Allstate has dramatically hiked rates in the face of intense inflationary pressure. Allstate agents collectively were responsible for 2.40 million new auto policies last year, up slightly from 2.39 million the year before, according to the filing.
Sales over the internet or phone increased more, though — up 24% to 2.20 million from 1.78 million in 2021.
Allstate’s primary rival, at least in the agent-sold part of the business, isn’t following suit. Bloomington-based State Farm has more than 19,400 agents throughout the U.S., a spokeswoman says, the same figure as last year.
An Allstate spokesman didn’t respond to a request for comment.
Many Allstate agents haven’t been pleased with the changes. NAPAA in 2021 sued the company in Cook County Circuit Court, alleging breach of contract over unpopular steps like forcing agents to use a centralized phone system provided by the company. Agents technically are independent contractors, responsible for health care costs, rent and other typical business expenses.
That suit, which Allstate is fighting, is in discovery.