EF Fall 07.indd - National Association of Professional Allstate ...

featureThe Canadian Experiment:a Precursor for U.S. Agencies?BY JIM FISHIIn an astonishing move that hasshaken, rattled and roiled its agents inCanada, Allstate Insurance Company ofCanada has announced a bold initiativethat strips agents of their renewal booksof business and closes 256 agent locationsthroughout Canada. The company’s planis to consolidate these locations and replacethem with what it calls “AllstateInsurance Agency” offices.The new offices will all have the samelook and will be strategically locatedin areas of high visibility. According tosources familiar with the plan, the companyintends to open 103 such locations.While the details of this initiativeare sketchy, it appears that the companyhopes to staff each of these offices withbetween three and five producers, mostof whom will be recruited from its poolof displaced agents. On the P&C side,each producer will have a specializedrole within the agency. Each agency willbe staffed with one or more “BusinessDevelopment Agents”, a “RelationshipDevelopment Agent” and a “CustomerCare Agent.”Business Development Agents will beresponsible to develop centers of influencefor new business generation, handleincoming quote calls and work leads andreferrals. Relationship DevelopmentAgents will be charged with expandingexisting relationships by working priorquotes and obtaining life and P&C referrals.And, finally, Customer Care Agentswill work the agency’s renewal book tostrengthen and enhance customer relationshipsand look for cross selling or upselling opportunities.When the company made its announcementin July, agents were stunned.The magnitude of the change, for some,was too much to digest in one day. Otherssimply could not believe what theyheard. But, as the disturbing details beganto sink in, they began to feel betrayed bythe company and grew angry over the lossof their renewal commissions. Agent moralehas hit “rock bottom,” lamented oneagent. “I have built my customer base formore than 20 years and now they’re takingit all away from me,” he added. But, whilethe company’s move is highly unpopularamongst many, if not most agents, thereare some who have taken a more pragmaticapproach. “This is the hand we’vebeen dealt. It’s time for us to decide to stayor to go, because there is no in-between,”said one such agent.Under the new program, agentshoused in the new Allstate InsuranceAgency offices will become part of thatagency’s “team.” While the bulk of agentcompensation is expected to come fromnew business writings, agents will alsohave an opportunity to earn quarterlybonus dollars if their team reaches certainobjectives. The bonus measurementwill include factors like loss ratio, retention,profitability and new business production.As one agent put it, “You betterpray that you don’t have any slackers onyour team because no matter how hardyou work, you’ll never make the bonus.”Policy renewals in Canada will mostlikely be divided by Postal Codes, the Canadianequivalent of U.S. Zip Codes, andthen assigned to the nearest Allstate InsuranceAgency office. Our understandingof these accounts is that they will notpay renewal compensation to individualproducers, are not available for capture30 — Exclusivefocus Fall 2007