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Allstate Looking to Eliminate Up to a Quarter of Its Agency Force

Source: IFA

Posted on 05 Feb 2010

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Allstate Corp. appears to be taking the first steps toward possibly eliminating as much as a quarter of its agent force because of low performance.

The National Association of Professional Allstate Agents (NAPAA) issued the warning in a Jan. 21 newsletter, saying the insurer has placed nearly 4,000 of its 12,153 agency owners in the lowest performing segments.

"This group will be targeted for termination,” the newsletter warns. “We see no more reprieves for agents that don’t meet company expectations. If you are in this group, we suggest that you begin to explore other employment options.”

NAPAA representatives told the Chicago Tribune that they expect up to 3,000 agents to get cut.

The group said in its newsletter that agent terminations for failing to meet quotas have “accelerated” and that Allstate is now giving those agents who miss established goals one year to recover.

Allstate wrote about $1.8 million in premium per agency, based on the 14,700 exclusive agencies and financial representatives who wrote $26.6 billion in premium in 2008.

“Our goal is to provide a consistently superior customer experience,” Maryellen Thielen, an Allstate spokeswoman told in a statement. “We intend to grow and succeed with Allstate agencies.”

The insurer, she said, has not set targets for agency numbers or size. “However, it’s clear that growing agencies is good for our customers, the agencies and Allstate,” Thielen said in a statement. Agency locations in the range of $3 million to $4 million in premiums (between 3,000 to 4,000 policies in force) “have the scale to support the staff and other resources needed to provide superior levels of customer service,” according to Thielen

She said Allstate is helping smaller agencies “to get on track and grow over time,” using incentives and resources, including 24-hour call center support, agent technology and detailed research on customers of an agency.

“Some agencies may choose not to take this journey with us, but for agency owners committed to providing consistently superior levels of service, the opportunities have never been better to grow their agencies,” Thielen added.

The National Association of Professional Allstate Agents is a nonprofit organization whose membership consists of agents under contract with Allstate Insurance Co., former Allstate agents and other interested parties and which seeks to communicate on issues that affect Allstate agency owners and their customers.