Allstate Agency Count Fell 15% In Past Year Amid Overhaul
February 22 2012 - 11:07AM
Dow Jones News
Allstate Corp.'s tally of its agencies fell 15% over the past
year, a decline that coincided with the insurer's effort to
overhaul agent compensation and provide funding to urge agencies
looking to merge.
The insurer's network of so-called "exclusive agencies" fell to
about 10,000, a decrease of about 1,500 since the last time the
company released its annual financial filing. Its current annual
financial filing was released Wednesday. Those agents sell
Allstate-branded home, auto and life-insurance products almost
exclusively.
The reduction comes as Allstate has ramped up an initiative to
provide loans to its more successful agents to help them buy up
smaller agencies and take over the client lists of those
agencies.
The company is also planning an overhaul of its agent
compensation structure that's designed to increase bonuses for its
best agents while pushing the least-successful ones out the door by
cutting base pay.
The proposed changes prompted an uproar among agents who were
concerned about whether they would be among the group that would
see their compensation fall. The company partly backed off its plan
in December, saying it would cut base pay for agents to 9% from the
current 10%. It had initially proposed cutting the base pay to
8%.
Allstate says the money saved on base pay will go to fund an
increase in bonuses from agents that hit performance targets. The
company says the changes will be implemented in 2013.
Allstate's exclusive agencies provide about 86% of the premiums
for the company's home and auto unit, its largest segment.
The number of independent agencies, which sell Allstate policies
in addition to offerings from other insurers, fell by about 100 to
roughly 4,400 agencies.
-By Erik Holm, Dow Jones Newswires; 212-416-2892;
erik.holm@dowjones.com
--Liz Moyer contributed to this article.
Allstate (NYSE:ALL)
Historical Stock Chart
From Jun 2024 to Jul 2024
Allstate (NYSE:ALL)
Historical Stock Chart
From Jul 2023 to Jul 2024