Property and Casualty News
No comments
Copyright © 2010 LexisNexis, a division of Reed Elsevier Inc. All Rights Reserved.
Terms and Conditions Privacy Policy
Allstate Agent Association: Company to Terminate 3,000 Existing Agents
Copyright 2010 A.M. Best Company, Inc.All Rights Reserved BestWire
February 1, 2010 Monday 04:33 PM EST
547 words
Allstate Agent Association: Company to Terminate 3,000 Existing Agents
Chad Hemenway
NORTHBROOK, Ill.
Thousands of existing Allstate agents are to be eliminated within the next two to three years as the company sheds those it thinks are not meeting specified production quotas, according to the National Association of Professional Allstate Agents. Association Executive Director Jim Fish said more than 3,000 agents are being sent termination notices. Many agents are "older agents -- 50 to 60 years old -- who might be servicing their book of business and maintaining high retention and loss ratios, but that isn't enough for Allstate.""They (Allstate) are looking to add high-value, production-oriented new agents" to hit marks on new business and premiums the NAPAA says are established by Allstate. Fish said the "so-called" Allstate independent agents are anything but, constantly controlled by the company in "every aspect of the business" from hours of operation and holiday schedules, to personnel requirements, Fish said.Allstate spokesperson Maryellen Thielen said the company "has not set targets for agency numbers or size.""We intend to grow and succeed with Allstate agencies," Thielen said. "We're providing incentives and tools for Allstate agencies to provide a consistently superior customer experience. We're also incenting agents to grow and enhance the customer service their agencies provide. We're actively recruiting new agents to further enhance and strengthen our local presence."NAPAA President Bob Isacsen, who said Allstate "doesn't acknowledge we exist," said the insurer has used agents as a scapegoat for "ineffective leadership.""You have non-insurance people running the company and running it into the ground, if you ask me," said Isacsen, who owned an agency for 21 years before selling about three years ago to retire. Isacsen, who is now the managing director of risk and insurance services at United Nations Federal Credit Union, said many agency owners will not be able to sell now due to a "dearth of available buyers."Just before Christmas, a federal judge approved a $4.5 million settlement between the Equal Employment Opportunity Commission and Allstate Corp. to officially end allegations of age discrimination. A class of 90 older former employees of Allstate will share the award. Its lawsuit, filed five years ago, alleged Allstate Insurance Co. violated the Age Discrimination in Employment Act (BestWire, Dec. 22, 2009).The EEOC alleged Allstate in 2000 began a reorganization plan in which it fired all of its sales agents and offered to make them independent contractors. Part of the plan said that former Allstate sales agents could not be rehired in other, nonagent positions for one year. In the lawsuit, the EEOC said that more than 90% of those agents were older than 40, making the hiring policy in violation of the federal ADEA (BestWire, Oct. 27, 2009).Allstate said it chose to agree to the settlement to avoid further litigation costs but continued to believe its position was correct and that it would have prevailed in court.In afternoon trading on Feb.1, shares of Allstate Corp. (NYSE: ALL) stock were selling at $29.83, down 0.33% from the previous close.Allstate Insurance Group currently has a Best's Financial Strength Rating of A+ (Superior). (By Chad Hemenway, associate editor, BestWeek: [email protected])
February 2, 2010
Terms and Conditions Privacy Policy
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News