EF summer 08.indd - National Association of Professional Allstate ...

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[ “I think that Canada is the testing ground for the U.S. The Canadian market only represents a small slice of Allstate, maybe 1 percent or ] less, and our cultures are similar. What better place for the company to test market its new business models.” anything. All the working notice does is provide a job through the company’s transition to its new model. What do they have to look forward to Well, the quota is $45,000 per month in new business premium, so it will be life on a treadmill. A local manager at one of the new AIA [Allstate Insurance Agency] locations informed one of his agents that, once the 24 month working notice is over, if he doesn’t make his monthly quota, he would receive a warning. If he misses it again, he would be put on a corrective action. If he misses it for a third month, he would be terminated. EF: What about the newer agents who have less to lose Kafka: The new agents have never experienced the taste of renewal business, so they don’t know what they’re missing. I don’t think it will take long before they find out that they’re getting shortchanged. Under the new model they’re still only earning 15% on new business and nothing for renewals. It just isn’t a good deal, in my opinion. EF: Allstate seems to like the concept of “mega” agencies. Do you see anything wrong with that picture Kafka: Yes I do. Agency customers want to feel important and some want to be pampered. The way the AIAs are set up, customers are assigned to the agency, not to an agent. In my mind, this makes them nothing more than a number, which is how I fear they’ll be treated. With the personal touch gone, why should they stay There are some customers who want to deal over the Internet, some who want to deal with call centres and then there are those who want to deal face-to-face – that’s the program I signed up for and what I plan to continue to do. EF: Will the Canadian model work Kafka: I don’t see how it can. The agents aren’t motivated and hostility continues to grow. I see the AIA experience as a good training ground for newer agents, but it’s not a real future. The level of production is unsustainable over the long term. EF: Was “losing” its most successful and experienced agents part of the company’s master plan, or was it simply a fluke Kafka: I think the consensus is that the company was oblivious to how we perceived the changes. Management doesn’t understand the driving force behind the successful agent. EF: You are a named plaintiff in the class action lawsuit that was brought against Allstate earlier this week. Obviously, you must have strong feelings about what has happened over the past ten months. Can you elaborate Kafka: In late November 2007, when I realized our concerns had fallen on deaf ears, I contacted the law firm of Scarfone Hawkins LLP. In January I received an email that they wanted to meet with me. Then on February 5, I made the three hour drive to Hamilton, Ontario to meet with David Thompson, a partner in the firm, and another of the firm’s attorneys, Michael Stanton. During the drive I couldn’t help but think of the enormous task that lay before me. I had prepared three identical file folders, one for me and one for each of the attorneys. Everything was in chronological order. These files represented many days of research and photocopying. I never let them out of my sight - they were, at least in my estimation, far too important. When I sat down with the attorneys, I learned that Scarfone Hawkins only accepts one in a hundred of the class action cases presented to them. But this fact did not deter me. It became apparent to me that I had found the right firm – these guys knew what they were doing. I resolved that our case would make the 1% cut. Prior to our meeting adjourning, I turned to David and said “The lives of 436 agents have been destroyed by the July 24th announcement. I came here today to seek justice on their behalf.” This class action suit represents a six-month labour of love for me. EF: How does an agent join the class action lawsuit Kafka: To learn more about the lawsuit Canadian agents are invited to visit the Website www.classactionlaw.ca. They should then click on ‘active claims’ and then again on ‘Allstate’ As far as joining the lawsuit, anyone who was an active Allstate employee agent in Canada on July 24, 2007 is automatically a member of the class. Agents should refer to the Statement of Claim to determine if they are members of the ‘retention class’ or the ‘departure class.’ Also, anyone who does not want to participate in the lawsuit can opt out by sending an email. EF: Have Allstate’s actions over the past ten months caused you any stress or anxiety Kafka: Allstate’s actions have caused me great stress and many sleepless nights. I 22 — Exclusivefocus Summer 2008
feel as though I’ve aged by a decade since the July 24th announcement. EF: Has there been any talk about unionizing among agents planning to stay Kafka: Let me start out by saying that I was never a big fan of unions. However, if I was planning to stay, there would definitely be a union in place given what we’ve experienced over the past ten months. We were exploited, which is reason enough to fight for a union. But, to answer your question, I am not aware of any serious talk about unionizing. EF: Do you have an opinion whether the Canadian model will have any effect on US agencies Kafka: I think that Canada is the testing ground for the U.S. The Canadian market only represents a small slice of Allstate, maybe 1% or less, and our cultures are similar. What better place for the company to test market its new business models EF: A number of agents have already left the company. Do you foresee more agents leaving Kafka: My prediction would be at least 50%, maybe more. EF: What is your reaction to Allstate CEO Mike Donoghue’s letter of May 22nd in response to the class action lawsuit Kafka: Mike Donoghue’s message has been consistent since the announcement. EF: Is there anything else you would like to share Kafka: Most people today understand why companies implement cost-cutting measures, but Allstate’s announcement last July came on the heels of sixteen quarters of mostly record profits. That’s a hard pill for agents to swallow. Four years of solid profits and the agency force is rewarded with a brutal financial beating. I did not want to leave and neither did the others – but Allstate gave us no choice. EF: Esther, I want to thank you for sharing. Good luck to you. Kafka: You’re welcome and thank you for supporting Allstate agents wherever they are. Following is the text of Allstate Canada CEO Michael Donoghue’s letter of response to the $60 million lawsuit filed on May 20, 2008. Allstate's response to the statement of claim May 22, 2008 Yesterday, a statement of claim was filed against Allstate Insurance Company of Canada and Allstate Corporation under class action legislation by two former Agents and one current Agent. It is not yet certified as a class action law suit, a process which is quite lengthy and can take a great deal of time. The statement of claim is seeking $60 million in damages. Allstate is currently reviewing the statement and will not be making any public comments on the specifics or contents of the claim. Rest assured that Allstate will take the necessary steps to vigorously defend against the allegations contained in the statement of claim in the proper quarters, but we will not do so publicly or in the media no matter how fervently others attempt to put the debate there. Allstate stands firmly behind its business decision to introduce the Allstate Insurance Agency and we are moving ahead. Since October 2007 we’ve opened 20 new Allstate Insurance Agencies – 13 in Quebec; 3 in New Brunswick; and 4 in Ontario. There will be 3 more open by the end of May, 2 in Ontario; and 1 more in New Brunswick. I encourage all of you to visit our Agents in one of our new agencies as they open across Canada. I have shared with you in the past that with any change there are those who are excited about our new way of doing business and those who are not. As you know, some Agents have decided to pursue other endeavours and I know that there are others still contemplating their available options. That said, I am optimistic about our future and we will focus our energy and resources on supporting the majority of our agents who have and will move into their new Allstate Insurance Agency. We are excited about the new Allstate Insurance Agency and we know that it will not only enhance and strengthen our relationships with our customers, but also enable us to grow, be profitable and remain competitive in a changing marketplace. For those who stay the course, we will strive toward a prosperous future that is based upon the requirements and expectations of the customers we serve. MJD Summer 2008 Exclusivefocus — 23
Page 1 and 2: Exclusivefocus Summer 2008 An Offic
Page 3 and 4: We finance Allstate books of busine
Page 6 and 7: president’s letter Farewell Messa
Page 8 and 9: usiness opportunities to increase a
Page 10 and 11: letters to NAPAA I wish to terminat
Page 12 and 13: letters to NAPAA ker friends are la
Page 14 and 15: letters to NAPAA I appreciate you
Page 16 and 17: 16 — Exclusivefocus Summer 2008
Page 18 and 19: the thief becomes your health infor
Page 20 and 21: agent issues The Kafka Interview IN
Page 24 and 25: usiness Would You Like Fries With T
Page 26 and 27: feature There Must be a Better Way.
Page 28 and 29: elated bonus. His first step is to
Page 30 and 31: company is “unwilling or unable
Page 32 and 33: Is a sea of paperwork slowing you d
Page 34 and 35: membership musings Standing By You
Page 36 and 37: whether spending this amount of mon
Page 38 and 39: AAs most of you know who have been
Page 40 and 41: technology What To Expect When It
Page 42 and 43: integrated or separate video card,
Page 44 and 45: onus from Allstate, such as the rat
Page 46 and 47: technology Allstate Agents Have a C
Page 48 and 49: June 10, 2008 Ladies and Gentlemen
Page 50 and 51: on my behalf. Allstate did offer to
Page 52 and 53: and better refine your analysis. If
Page 54 and 55: staffing Is Your Staff “Engaged
Page 56 and 57: usiness tips Stronger Documentation
Page 58 and 59: organizing your business Forming an
Page 60 and 61: the NAPAA market place Agencies for
Page 62: the NAPAA market place Agencies for

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