NAPAA - National Association of Professional Allstate Agents, Inc.

destroyed the uniqueness of the Allstate
agent. Many times, the truly great agents
aren’t those meeting or exceeding sales
quotas, but rather are those who nurture
their books of business by building and
rekindling customer relationships. Their
knowledge was achieved through hard
work, keen observation and the knowhow
of getting through the red tape for
their customers. There was a time when
these fine professional agents had less
than a 5% turnover within their ranks.
Once you were an Allstate agent, you
were an Allstate agent for life and proud
of it. You were respected by your company
and you bled Allstate Blue. There
was nothing better than to be an agent
for this wonderful company. The concept
of being an Allstate agent for life was a
successful strategy for the company. Involuntary
agent terminations were extremely
rare, so the agent for life strategy
was very reassuring to the agents.
Enter Ed Liddy. When he appeared
on the scene, one of his bolder acts of
mayhem was to void all the contracts and
agreements that Allstate had with the
agents. Yet when he was CEO at AIG
during the recent financial crisis, he declared
how important it was to honor the
AIG contracts that paid those ridiculous
bonuses. To him, one contract was worthy
of fulfillment and the other wasn’t
because it involved “those lazy, overpaid
Allstate agents.” The ascension of Tom
Wilson is an even greater tragedy for the
customers and agents of Allstate. Before
the arrival of Liddy and his protégé Wilson,
the agent-company relationship was
all about stability and professionalism;
today it is all about mayhem.
In large degree, the agent-for-life concept
still exists at State Farm and still
exists in the independent agent world,
where the companies can’t do enough for
the agents representing them. It even exists
at Allstate with independents holding
contracts with our subsidiaries or
with Allstate directly; but not for captive
Allstate agents.
So what happened Somewhere along
the line, someone in management decided
we were nothing more than overpaid
clerks and order takers. This likely occurred
when we were manning the Sears
booths. In those days, most of us worked
4-hour booth shifts, leading some managers
to believe that we had cushy jobs.
What they forgot was that the rest of our
workday was spent making calls and/or
making house calls. The value of the truly
professional agent was never appreciated.
Yes, it’s true that many of us made very
substantial livings doing what we did.
But anytime you make a good living in
sales, you are selling a lot of something,
and you can’t do that by sitting around
on your posterior, eating bonbons all day
long and working 4-hour shifts.
And look at what we did. We took
a fledgling insurance company, which
started in 1931 on the second floor of
a Sears store in Chicago, and turned it
into a giant. Our value to this corporation
couldn’t and shouldn’t be ignored.
Many of us have lost customers to other
companies because of affordability issues,
but how many times have we been
told by them that we were the best insurance
agent they ever had Why Because
we cared about them and it showed. We
tried to help them through the trauma
of the claim experience. We remembered
when they had babies and watched as
they grew up before our very eyes and
before we knew it, they were getting
their driver’s licenses, some 16 years
later. Mom and dad would tell their son
or daughter, “When you buy your own
insurance someday, you should use our
agent because he’s taken care of our family
for all these years. I wonder what Tom
Wilson’s parents told him… In any case,
you won’t find that kind of loyalty on the
Internet or by calling an 800 number.
I suppose there was a day when the
accountants at Allstate perused the corporate
balance sheet and said. “Look at
those agent commissions. That number
is unbelievably high. We’ve got to find a
way to knock that number down. Why,
Geico doesn’t even have agents and look
how successful they’ve become. We could
be even more profitable if we did the same
thing.” Hence, a new management philosophy
was born! The only thing wrong
with this picture is that agents and customers
are living, breathing people who
have placed their full faith in this company.
Like everyone else, Allstate agents
have college tuitions to pay, mortgages to
meet and all the other expenses of daily
living. In many cases, they have invested
every dollar they could spare into making
their agencies successful.
From a moral point of view, it bothered
me greatly in recent years to see
scratch agents, who didn’t have a prayer
of making it, hired by Allstate. They had
no book of business, yet still had to have
a minimum of $50k in the bank to get
the job. The company knew there was
a 90% or greater casualty rate for these
new agents, yet they still kept bringing
them onboard. Many don’t last a year.
Then they enticed and coaxed existing
agents to find a body they could hire as
a new agent by offering substantial finder’s
fees. This bothered me greatly, but
even more troubling was the fact that it
didn’t bother Allstate management at all.
Clearly, they have no conscience. There
is something morally wrong when a
company knows better, yet self-servingly
looks the other way.
Today, it is even worse than ever. New
agents buying a book of business are
only slightly more successful than those
who don’t. Yet the company keeps hiring
them, knowing they’re going to fail.
Why Perhaps Allstate will be agent-free
in ten years. All they have to do is convince
a few thousand large agency owners
to buy into their new model, wherein
the agency owner will not be an agent in
the traditional sense, but will supervise
a cadre of specialized, woople-speaking
LSPs, much like the Canadian model. I
don’t know about you, but I seem to recall
some in management declaring that
the Canadian model would never come
to the U.S.A.
What really saddens me is reading
the letters in the runningclock newsletter
from people who write to ask, “I’m
thinking of buying an Allstate agency.
I’ve been told to subscribe to your newspaper
to check out the real facts.” Countless
agents, including me, would advise
them to “turn and run the other way as
fast as possible, unless you want to ruin
the lives of you and your family.”
It wasn’t always this way. There was
a day when bringing in a friend was a
very proud day for me and the family of
that lucky guy who became and Allstate
agent. Sadly, those days are gone and will
never return. Ef
38 — Exclusivefocus Summer 2011