NAPAA - National Association of Professional Allstate Agents, Inc.

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Questioner : Dan Farrell - Sterne Agee & Leach Inc. “Okay. And then, could you just comment generally on your ongoing efforts to improve productivity of the agent force And I know in the past, you’ve talked about there being a little higher turnover of agents. And maybe just give us some general color on where we stand right now.” Joseph Lacher (Unedited answer) “Yes. Again, the biggest thing to think about is we’re not in any way trying to reduce the number of people we’ve got serving our customers, the license sales professionals and folks working inside of agencies.” Since the question was specifically about agents and not LSPs, Joe’s answer is akin to describing the direction from which the sun rises by telling us the direction in which it sets. But his answer does support the theory of retaining a large number of LSPs in a Sales Center environment like the Canadian model. He then proceeds to tell us that Allstate will facilitate the acquisition of smaller agencies by larger agencies and suggests it is a desirable process. Again, makes reference to the concept of fewer but larger agencies. Here’s what he said: “What we’ve found is that in some cases, some of our agencies have a sufficiently small scale; that they’re not able to readily able deliver that customer value proposition that we’re looking for. And we’re trying to help them get to scale. The likely result of that may be that some of the smallest folks conclude they can’t get there on their own, and the best way to do it is by combining with another agency.” Finally Joe gives us some insight to when Allstate expects this merger process to occur: “We’re making good progress on that. That work will continue. It will take us at least another year or year and a half to really move it where we want to go. And we feel good about the progress we’re making overall.” If you are a former agent reading this, you likely feel a bit of relief in not having to deal with the uncertainty that lies ahead for the agents under Allstate’s EA program. Not so for the rest of us. According to Mr. Lacher, whatever changes lie ahead, it will take Allstate about a year and a half to get there. Yet neither Mr. Lacher nor Mr. Wilson has laid out a master plan to the agency force, opting instead to create certain mayhem by springing it upon us at the last minute. Regardless, every agent will feel the effects of Allstate’s new plan both financially and emotionally. Newly hired agents will undoubtedly be the most affected because of the significant investment they’ve risked by opening a brand new business. They will have little to no chance to recoup their investment. Tenured agents will suffer economic losses as well. Only those with guaranteed TPP will be somewhat protected. These are the agents that became EAs before the year 2000. The TPP is not guaranteed for anyone who became an EA after that. For them, the TPP can be changed or eliminated altogether. Few agents remain who have the guaranteed version of the TPP, and the rest of us are subject to the whims of a profit-at-any-price management team. Anticipating Allstate’s future actions is a bit like solving a thousand-piece puzzle. Many of the key elements required to put the puzzle together have been acquired through understanding Allstate’s past. To that end, we have seen the steps Allstate has already taken to the exclusion of the agent. These pieces cannot be ignored. There are some unknown variables that could ultimately affect the type of role the agent will play. Perhaps two of the unknown pieces are market conditions and Allstate’s ability to pursue profits at any cost. But to avoid solving the puzzle, or to avoid anticipating what the company might do in spite of these unknowns, is a serious mistake. Agents would be wrong to believe they are protected from this uncertainty by their contract. That is because we have a 90 day, unilateral, and terminable for any cause agreement. And agents who think they’re safe as long as they meet Allstate’s declared business objectives and who are in compliance, should not be so cocksure about their future security. Canadian NOA agents are proof that this is not so. I believe agents have enough “history” to help them anticipate the future. Allstate is banking on a youthful and inexperienced sales force that has no memories or preconceptions, and can be molded into “ideal” workers who will utilize all of the company’s processes and scripts. I contend, therefore, that past performances are an indicator of future actions. For the sake of thousands of agents who will potentially be financially harmed, I hope I am wrong. Unfortunately, Allstate has almost a perfect track record when it comes to living up to its past reputation. Ef Contract Terminated If you have been terminated by the company for failure to meet expected results, NAPAA wants to help. We will post your agency for sale on our Website at no charge. Just fax or email a copy of your termination letter to 866-627-2232, or HQ@ napaausa.org. After forwarding your termination letter to us, go to the Sell Agency Listing page at www.napaausa.org and fill out the information you want included in your ad. Important: Be sure to click “NAPAA Member – No Charge” before sending. We will post your listing for free. 52 — Exclusivefocus Summer 2011
A Creed for Allstate Agents I am an Independent Contractor… 1. I am an independent contrac tor and the owner of an insurance agency offering Allstate insurance prod ucts to consumers in my community. 2. The operation of my agency is subject only to my own professional judgment. 3. I am free to determine the hours of operation, as well as the holiday schedule for my agency. 4. It is my decision to offer 24 hour service to my customers through the All state CIC, or not to. 5. I will produce insurance appli cations in compliance with Allstate’s guidelines, but will establish my own business practices regarding how, when, and where the work will be done. 6. I am not subject to quotas or mini mum production standards. 7. I am not subject to supervision, direction, or performance reviews from Allstate managers. 8. I do not provide reports to the company, outside of premium remittance reports. 9. I am available to meet with com pany management from time to time at mutually agreed places and times, but attendance at company meetings and training sessions are at my option. 10. I may staff my agency with work ers of my choosing. Allstate will provide binding authority approval subject to licensing requirements and background check information only. All hiring, train ing and evaluation of my staff are at my sole direction. 11. I am afforded the ability to con tract with other insurance providers of my choosing for the purpose of securing cov erage where Allstate has refused applica tion for coverage (right of first refusal). 12. Having made a significant invest ment to acquire prospect and lead in formation, all personal information and quotes prepared for prospective clients by my agency are the property of my agency and may not be shared with call centers or others for any purpose. 13. My contract with Allstate may not be terminated without cause, except in the event that Allstate no lon ger offers insurance in my state. “Cause” is specified in my contract and not sub ject to change without prior consent of both parties to the contract. 14. As an Allstate agent in good standing, I am an approved buyer for the purchase of additional Allstate agencies or books of business. 15 I am free to sell my agency without unreasonable interference from Allstate. No buyer may be denied approval to pur chase my agency without cause. “Cause” is specified in writing in my contract and not subject to change with out prior con sent of both parties to the contract. Summer 2011 Exclusivefocus — 53
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NAPAA - National Association of Professional Allstate Agents, Inc.

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