Agent Informer - National Association of Professional Allstate Agents ...

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News stories of interest to Allstate Agency Owners published by the National Association of
Professional Allstate Agents, Inc. This Special complimentary issue of Agent Informer is designed to acquaint
you with our email publications. NAPAA members have already received all of this news in their inbox over the last 4
weeks. You could also receive weekly news in the DirectExpress newsletter – exclusively for NAPAA Members.
July 22, 2011
Allstate Agent Group to vote on union affiliation
July 18, 2010, NAPAA Headquarters
Gulfport, MS – Tired of being controlled as employees and defined as independent contractors, members of
the National Association of Professional Allstate Agents, Inc. (NAPAA), who feel threatened with the loss of
their businesses will soon take part in a secret mail ballot vote that will decide whether the Association will
affiliate with Office and Professional Employees International Union (OPEIU) as a Guild. The vote will be
administered by the American Arbitration Association (AAA) and be counted on Wednesday, August 17, 2011
at the AAA’s New York office.
The decision to poll the membership was bolstered by an enthusiastic response by attendees and the NAPAA
Board of Directors at the group’s most recent national conference in New Orleans, LA, where Michael
Goodwin, president of OPEIU presented the case for affiliation and took questions from the audience. He was
quick to point out that guilds have proven to be very effective for self-employed workers, citing the Screen
Actors Guild, of which Ronald Reagan was once president.
The OPEIU represents 125,000 employees and guild members, but when coupled with its affiliation with the
AFL-CIO, the number swells to more than 11 million. With a positive vote on the ballot initiative, the group will
take steps to formalize the affiliation. Upon affiliation, NAPAA members will be granted membership in the
OPEIU, the national AFL-CIO and all State Federations of Labor, giving the agent group better access to
legislative assistance and legal expertise.
“With the prospect of a 20% cut in agent compensation looming, the Association believes the time is ripe to
affiliate,” said NAPAA executive director Jim Fish. “In addition, many insurers utilizing independent contractor
agents have manipulated IRS precepts to the point where independent contractors are now employees without
benefits or protections,” he added.
Confident of an affirmative vote to affiliate with OPEIU, Fish added, “Agent morale at Allstate has hit rock
bottom, which cannot be good for the company, the agents or the shareholders. This is not a matter of political
philosophy; it’s a matter of defending the interests of ill-treated small business owners. The ballots will be
distributed within a matter of days. This historic vote will be proof positive that agents are extremely unhappy
with the status quo at Allstate.”
ABOUT NAPAA
Based in Gulfport, Mississippi, NAPAA is a non-profit organization whose members are predominantly insurance
agents under contract with Allstate. In addition to offering a variety of benefits and services, NAPAA further serves
its members by acting on their behalf and speaking with a distinct and unfettered voice on a wide range of issues.
To contact NAPAA, please visit its Website at www.napaausa.org or call (877) 269-3474.
ABOUT OPEIU
The Office and Professional Employees International Union represents more than 125,000 employees and
independent contractors in the United States, Puerto Rico and Canada in banking, insurance, higher
education, shipping, hospitals, medical clinics, utilities, transportation, hotels, administrative offices and more.
Professional organizations and Guilds affiliated with OPEIU are a diverse group that includes physicians,
pharmacists, chiropractors, appraisers, podiatrists, clinical social workers, hypnotists, teachers and helicopter
pilots.

Allstate exec leaves company, stock takes a hit
July 18, 2011, by Steve Daniels, Crain’s Chicago Business
(Crain's) — Allstate Corp.'s stock closed down nearly 5% Monday on news that the head of its biggest
business unit had left the company suddenly.
The abrupt departure Monday of Allstate Protection President Joseph Lacher, who ran the Northbrook-based
company's core auto and homeowners insurance unit, was a surprise to investors, who've been unhappy with
Allstate's sliding marketshare.
In a terse statement, Allstate offered no explanation for Mr. Lacher's exit, which was effective immediately.
Mr. Lacher, who joined Allstate from Travelers Cos. in late 2009, recently hired several high-priced executives
in newly created positions reporting directly to him. He also was showcased in Allstate's first “analyst day” in
over a decade last month. The company didn't even have an interim replacement for Mr. Lacher lined up, and
the presidents of the business units under Mr. Lacher were told to report to Allstate CEO Thomas Wilson for
now.
An investor, who declined to be identified, said the word the company was putting out was that lack of growth
in policies and premiums explained part of his departure.
But Mr. Lacher's sudden exit was tied, too, to recent critical remarks he'd made in a semi-public setting about
Mr. Wilson, people familiar with the matter said. In particular, Mr. Lacher was said to have disparaged Mr.
Wilson to a group of top-performing agents at the company's annual Leaders Forum for agents in Orlando,
Fla., in May, these sources said.
An Allstate spokeswoman said the company wouldn't comment on Mr. Lacher beyond the minimal language in
its announcement. A call placed to Mr. Lacher's home wasn't immediately returned.
Before today, investors looked to Mr. Lacher as the key figure in a turnaround story that has yet to be seen in
Allstate's financials. He had played a role in the $1-billion acquisition of online insurer Esurance Cos.,
announced in May, and was working to pare Allstate's agent force, numbering roughly 11,000. Allstate is
getting tougher with agents who don't meet sales goals and is attempting to force agents to join forces or sell in
a bid to create larger, better-capitalized agencies.
“The lack of comment on why he left is largely being interpreted to mean he didn't leave on the best of terms,”
said Paul Newsome, analyst with Sandler O'Neill & Partners in Chicago. “He was perceived as the guy who
was there to fix a lot of the problems. . . . There's just a lot of questions and no answers at this point.”
The news caused at least two analysts who had recommended investors buy Allstate's beaten-down stock to
downgrade their ratings to "hold."
Allstate's stock closed down $1.46, or 4.95%, at $28.01. That's just 77% of Allstate's book value as of March 31.
http://www.capitalresources.com/

BestDay Audio Interview With Jim Fish Now Available
July 19, 2010, AM Best Media Archive
NAPAA's Jim Fish on Affiliating with the Office and Professional Employees International Union
Jim Fish, executive director of the National Association of Professional Allstate Agents Inc., talks about the
organization's members upcoming Aug. 17 vote on affiliating with the Office and Professional Employees
International Union. http://www.ambest.com/media/media.asp?RC=189944
www.sprint.com/allstateagent
Allstate Misses the Turn as Rivals Reinvent Auto Insurance
June 27, 2011, By Steve Daniels, Chicago Business
Editor's Note: This is an excerpted portion of a larger editorial package. For the entire story including several
graphs/charts, visit: http://www.chicagobusiness.com/article/20110625/ISSUE01/306259984/allstate-missesthe-turn-as-rivals-reinvent-auto-insurance
His dream of a broader financial services empire in ruins, Thomas Wilson is running out of time to revive
Allstate's once-dominant insurance business.
Since Mr. Wilson became CEO of the country's second-largest auto and home insurer nearly five years ago,
Allstate has stuck to its old ways while rivals using new direct-sales techniques grabbed most of the growth in
the $164-billion U.S. auto insurance market. Customers are defecting, premium revenue is falling and
Northbrook-based Allstate's stock price is down by half since Mr. Wilson took the helm.
Shareholders seem fed up. Nearly 1 in 3 voted against his re-election as board chairman at last month's
annual meeting, the highest percentage of "no" votes for any CEO of a Standard & Poor's 500 company this
year.
"I think (he has) probably a year, maybe two at the most," says Meyer Shields, an analyst at Stifel Nicolaus &
Co. in Baltimore.
More than Mr. Wilson's job is at stake. Allstate's long slump casts doubt on the future of an 80-year-old
company with deep roots in Chicago and 8,400 local employees. Allstate faces the same fate that befell other
stalwarts of corporate Chicago — Motorola Inc. and Tribune Co., to name two — that foundered after missing
fundamental shifts in their industries.
If Mr. Wilson, 53, can't turn around the auto insurance unit, Allstate faces a long, painful shrinking process that
could add many more layoffs to the roughly 1,000 local jobs it has cut since the financial crisis. With its stock
trading well below book value, the company also could be vulnerable to a takeover.
"It is going to have to grow," Mr. Shields says. "It's taking forever to turn around."

A BEHEMOTH IS BORN
The eighth-largest Chicago-area company, Allstate was born during the Great Depression as the in-store
insurance arm of Sears Roebuck & Co. It became independent in 1995, when Sears spun it off in a $9-billion
deal.
Allstate moved beyond the Sears store insurance counters, building a network of exclusive agents around the
country to sell auto and homeowners coverage to middle-class Americans in the postwar era. It remains a
behemoth. About $1 of every $10 spent by U.S. households on car insurance goes to Allstate; it serves nearly
16 million households.
During the 2000s, Allstate moved to reduce its reliance on insurance by expanding into banking and retirement
products. It expanded in life insurance, too, selling annuities through banks and other outside firms, as well as
though its agents.
Mr. Wilson, as chief operating officer under predecessor Edward Liddy and later as CEO, was the architect of
the strategy. But his vision of Allstate as a financial superstore for the middle-class clientele of its agents never
bore fruit, and it left the company more vulnerable than most property-casualty insurers to the financial
meltdown of the late 2000s. Allstate posted a loss of $1.7 billion in 2008, largely due to investment losses. The
next year, it cut its dividend in half.
Meanwhile, natural disasters pummeled the homeowners insurance business. Hurricane Katrina caused $3.7
billion in losses for Allstate in 2005, leading the company to curtail homeowners policies in coastal areas. That
hurt its auto business in those regions because Allstate's customers tend to buy auto and homeowners policies
from the same insurer.
While Allstate was trying unsuccessfully to diversify, rivals were revolutionizing the auto insurance business,
which Allstate still counts on for most of its sales. Auto premiums generated 55% of its $31.4 billion in revenue
last year.
Geico and Progressive Corp. found a new formula for growth in the relatively mature business. They crafted a
lower-cost model combining direct sales over the Internet and telephone with heavy television advertising.
Offering lower prices and more convenience, they grew rapidly at the expense of Allstate and other insurers
that sell mostly through agents.
Allstate's second-place share of the auto insurance market fell to 10.4% from 11.3% over the past five years,
while Chevy Chase, Md.-based Geico jumped two points to 8.7% and Progressive climbed to 7.9%
Meanwhile, Bloomington-based State Farm Insurance Cos., the largest car and home insurer in the U.S. and a
mutual company owned by its policyholders, is consistently rated better for claims handling and service than
Allstate. Unlike publicly traded Allstate, it can offer lower prices without worrying about Wall Street's reaction to
the resulting shrinkage of profit margins. State Farm's auto insurance business is still growing despite an
online presence even smaller than Allstate's.
Allstate finds itself in a no man's land — it's not the cheapest auto insurer, and it's not known for providing the
best service.
CATCHING ON
Mr. Wilson, who declined an interview request for this story, isn't the first Allstate CEO who failed to grasp the
power of direct selling to reshape the industry. But he appears to get it now.
He dramatically changed course with a $1-billion deal last month to acquire San Francisco-based online auto
insurer Esurance Insurance Services Inc. Formed in 1999, Esurance outsells Allstate's 10-year-old Internet
platform.
Under Allstate, Esurance will keep its brand name and sell policies at lower prices than Allstate agents offer.
That's another break with the past.

When Allstate launched an online sales operation in 2000 under Mr. Liddy, it didn't undercut its agents on
price, fearing a backlash from the 15,000-plus salesforce.
"To me, that was the fatal flaw from the get-go," says Jeffrey Lewis, an Allstate vice-president from 1999 to
2004, who helped launch the effort. Mr. Lewis, now retired, says the customer "expectation was, 'If I did all the
work myself, I was going to get a better price.' "
Geico and Mayfield Village, Ohio-based Progressive were happy to meet that expectation. During the ensuing
11 years, Allstate's annual online sales reached $700 million, while Geico's surged by $10 billion.
Mr. Wilson says things will be different with Esurance. But his new online unit will need a big dose of ad
spending, which already is soaring as auto insurers vie more feverishly each year for consumers' attention.
Esurance spent $100 million on ads last year, badly trailing Geico, the industry's big spender at about $800
million. Allstate's ad budget is around $500 million, concentrated on the familiar "good hands" ads featuring
actor Dennis Haysbert and Dean Winters' cheekier "Mayhem" character personifying all that can go wrong in
the world. The company plans to advertise Esurance separately, with some sort of tagline identifying it as an
Allstate unit.
"We'll expand (advertising) appropriately, but it will be at a reasonable return," Mr. Wilson told investors this
month.
More ad spending puts more pressure on profits, a fact not lost on investors wondering how "Mayhem" can
garner so much buzz (500,000 Facebook fans and nearly 10 million YouTube views) without boosting Allstate's
sales.
Wall Street generally approves of the Esurance acquisition, but Allstate stock got no boost from the deal. Some
question Allstate's ability to execute, given past missteps.
A $1.2-billion deal in 1999 for Chicago-based CNA Financial Corp.'s auto and homeowners insurance unit was
supposed to expand Allstate's sales through independent agents. But Allstate backed away from the strategy
after too many high-risk customers signed up. Its sales through independent agents shrank to $1.1 billion last
year from $3 billion just after the CNA acquisition.
"Given their track record, what happens (to Esurance)?" says Greg Peters, an analyst at Raymond James &
Associates in Chicago. "It may grow in the short term, but if history repeats itself this will be a shrinking book of
business over the long term."
And while Allstate aims to compete more effectively with Geico and Progressive on their turf, they're targeting
Allstate's stronghold among older consumers who like to buy auto and homeowners insurance from the same
company. Until recently neither sold homeowners insurance. But both have linked up with home insurers to
offer a bundled product.
"It's a huge chunk of business we're after," John Sauerland, Progressive's president of personal lines, told
investors this month.
'THREAT LETTERS'
In the meantime, Allstate is creating its own sort of mayhem within its captive agent force, which accounted for
more than 90% of its $26 billion in property-casualty insurance premiums last year. The company is culling low
performers and pushing for consolidation among its 11,500 agencies, hoping bigger operations will provide
better service. Executives have said the number of agencies could fall by as much as 25%.
Agents say management is sending out more "threat letters," warning agents that they'll be terminated if they
don't start hitting sales targets.
Allstate also is reducing base commissions for many agents and making more of their pay contingent on
reaching sales goals set by the company.

"The morale today is probably at its lowest that I've ever seen," says Jim Fish, executive director of
the Gulfport, Miss.-based National Assn. of Professional Allstate Agents, a frequent critic of the
company over many years.
Some agents are leaving Allstate to form independent agencies and selling their old customers cheaper
policies from other insurers. It's not particularly hard to do.
Agents who leave the company get a one-time severance payment equal to 1½ times a year's commissions.
So, an agent with a $1-million client list can receive up to $150,000. There are no restrictions on setting up a
competing agency other than locating it at least a mile from the former Allstate franchise and refraining from
soliciting former customers for a year.
Greg Haynes started his own agency in Victoria, Texas, in late 2009 after taking a $300,000 buyout from
Allstate following nearly 20 years as an agent. He estimates about 20% of his former Allstate customers now
are with him and are insured by other companies.
Defecting agents say the power of Allstate's brand — an advantage the company touts in missives to agents
— is no match for competitors' lower prices.
"We sell from Hartford, Travelers, Safeco," says Mr. Haynes' partner John Burgman, another former Allstate
agent. "When the difference (in price) is 25% on an annual premium, branding takes a back seat. It really
does."
Joseph Lacher, Allstate's property and casualty president, told analysts this month that the agency overhaul
will take about two years but will create agencies that do a better job of retaining clients and selling
other insurance products to auto policyholders. In the short term, though, he acknowledges the
company could lose some customers.
"We're convinced that . . . over the couple-of-years transition, (agency performance) will improve," he said.
"But inside of a year, we could see a little noise around it."
In a statement, the company adds, "Our growth strategy is to serve customers well and attract new business
with effective marketing campaigns such as 'Mayhem.' This is a great time to build an Allstate agency, and we
have had no problems retaining high performers or attracting talented entrepreneurs to our company."
Analyst Mr. Shields says Allstate hasn't explained adequately why bigger agents are better. And he
believes the risks of the agency-rationalization campaign are higher than the company admits.
"I honestly don't (understand)," he says. "I wish I did."
Unhappy Allstate agents hang up their own shingles, taking customers with them
Allstate Corp. put food on the table for Greg Haynes and his family for five decades before he decided he'd
had enough. Like his father, who started as an Allstate agent in Victoria, Texas, in 1954, Mr. Haynes sold
insurance for Allstate, too, from 1990 to 2009. For the first half of that period, he did well, doubling his father's
book of business to $5 million.
Then, in 2005, Hurricane Katrina hit, slamming Allstate with $3.7 billion in losses. The insurer responded by
pulling back from areas prone to hurricane damage, and half of Mr. Haynes' customers were no longer able to
get homeowners insurance from him. They left in droves, and his $5-million book withered to about $2.5
million. "Those customers would say, 'If you don't want my home, you don't want my auto either,' " he says.
Then the recession hit, and he says Allstate's prices weren't competitive. "They'd say, 'I love you, Greg, but I'm
looking for ways to save money,' " he says.
In late 2009, Mr. Haynes, 51, took a $300,000 company buyout and hung up his shingle as an independent
agent, joining with another fed-up Allstate veteran, John Burgman, 54. Their firm, Victoria Insurance Group

LLC, has $2.5 million in premiums, and Mr. Haynes estimates about 20% of his old Allstate customers are with
him.
Mr. Burgman says he and Mr. Haynes haven't had to do much soliciting in their town of 60,000, home to
petrochemical plants and a soon-to-be Caterpillar Inc. factory. "You see people at the grocery store," he says.
"You cross paths."
Mr. Haynes says he gets a couple calls a month from unhappy Allstate agents picking his brain on "going
independent." "I tell them, 'No. 1, they better start saving their money,' " he says. Then, he says, "My advice:
Get out of Dodge."
Shareholders make their displeasure with leadership known: 'no' votes
Shareholders are turning up the heat on Allstate Corp. directors.
At last month's annual meeting, directors Joshua Smith and H. John Riley Jr. barely cracked the 50% vote mark
needed for re-election to the board. Chairman and CEO Thomas Wilson saw a 31% vote against him — the highest
percentage of "no" votes for any CEO of a company in the Standard & Poor's 500.
Three familiar local names — former Illinois Tool Works Inc. CEO W. James Farrell, former Transora Inc. CEO
Judith Sprieser and former Russell Reynolds Associates Inc. executive Andrea Redmond — attracted the opposition
of about 40%. A fourth, former McDonald's Corp. CEO Jack Greenberg, got a thumbs-down from 31.7%.
The votes bode poorly for Mr. Wilson's future and put intense pressure on the board to act if results don't improve
soon, says Charles Elson, chairman of the John L. Weinberg Center for Corporate Governance at the University of
Delaware
You can't ignore it," Mr. Elson says. "You have to make some significant changes."
Proxy adviser Institutional Shareholder Services chided the board for approving $9.3 million in pay for Mr. Wilson
last year, despite shareholder returns that lagged an index of comparable companies.
ISS also took issue with the board's response to a shareholder vote calling for Allstate to allow the owners of at least
10% of its stock to call a special meeting of shareholders. Instead, Allstate set the threshold at 20%.
In an emailed statement, Allstate said, "The stockholder support for our board was down this year because our
board acted to implement the right for stockholders to call special meetings at a different threshold (20% vs. 10%)
than had been part of a stockholder proposal which received majority support in 2009 and 2010."
As for Mr. Wilson, "Ultimately, it's pretty hard for (management) to last with that kind of opposition," Mr. Elson says.
"Unless you tell a pretty convincing story next year, it's going to be pretty hard.”
Read more: http://www.chicagobusiness.com/article/20110625/ISSUE01/306259984/allstate-misses-the-turn-as-rivals-reinvent-autoinsurance#ixzz1QgQ6kL23
http://www.napaausa.org/membership.asp
Your NAPAA Elite Membership includes your agency subscription to Producer Online, by the Rough Notes
Company. For a live demonstration, please call 1-800-428-4384, and ask for the Producer Online demo for
NAPAA members. Your staff will love the “How to Insure” training courses�real info they can use every day!

Mission Statement: NAPAA is dedicated to the success of Allstate Exclusive Agency Owners and to
advance the independence and entrepreneurial spirit of our members.
Are You Ready for 8 and 8?
The bleak reality of a 20% cut in compensation appears more likely with every passing day. NAPAA has
confirmed that an agent focus group recently convened in Northbrook. Agent representatives from across the
country were invited to participate in the half day event to discuss the new “8 and 8” compensation package.
Company managers did their best to convey the sense that “nothing is carved in stone” on the comp issue, but
some participants walked away feeling apprehensive, convinced that the 8% commission rate is imminent.
Along with the “stick” of lower commissions, the company will apparently offer a few “carrots” that agents can
use to boost their commissions by as much as 3.5%. These include earning “points” for maintaining excellent
RFG, POSIS and ALI scores, superior household penetration, meeting or exceeding an adequate number of
LSPs in relation to PIF, participation in woople and, of course, outfitting your office utilizing the Branded Retail
Environment (BRE). The company has yet to formally announce the new compensation plan, but NAPAA
believes it could be as early as August 1 st .
News from NAPAA
New Jersey Agent sues Allstate for violating New Jersey franchise
laws, terminating his Agent Agreement without “good cause”
July 6, 2011, NAPAA Headquarters, Gulfport, MS
Mario DeLuca has spent his entire working life building his Allstate business. But then after 42 years
representing the company, Allstate abruptly notified DeLuca that it was terminating his agency agreement
without cause.
On Tuesday, DeLuca’s attorney, W. Michael Garner of Minneapolis, MN, filed suit against Allstate New Jersey
Insurance Company in the Superior Court of New Jersey alleging the company has violated the New Jersey
Franchise Practices Act (“NJFPA”). DeLuca maintains that his agreement with Allstate constitutes a franchise
relationship under New Jersey law.
Mario DeLuca is a resident of Westwood, New Jersey. He has earned a plethora of company awards over the
years, placing him among the elite producers in both state and national rankings. Among other awards and
recognition, he has earned the prestigious Conference of Champions award 27 times, Honor Ring 33 times,
Quality Agent 30 times and the Financial Leader award 15 times. DeLuca is also well-liked by his customers
who renew their policies 92% of the time, easily besting the national average.
DeLuca has asked the court for a preliminary and permanent injunction to stop the company from confiscating
the business he has worked 42 years to build. According to the complaint, the company failed to demonstrate
“good cause” for the termination under the NJFPA. In addition, the complaint cites that the conduct of the
company violates the covenants of good faith and fair dealing and that the commission structure in New Jersey
requires agents to perform additional work in order to obtain the same level of compensation as Allstate agents
in the rest of the country.
“DeLuca’s case is only the tip of the iceberg,” noted Jim Fish, executive director of the National Association of
Professional Allstate Agents, an independent group representing Allstate agents. “Several other long-term
agents in New Jersey have received warning or termination letters as well. It is our hope that Mr. DeLuca’s
case is successful and will set a precedent for other agents in New Jersey.”

Contract terminated or under threat of termination?
This Atlanta law firm is interested in speaking with any agents who may have been terminated, or have been
threatened with the termination of their contract for failing to achieve company-imposed “business objectives”.
Please contact the law firm for more information. Their contact information and website address is listed below.
Beal & Blitch, LLP
1100 Peachtree Street
Suite 640
Atlanta, GA 30309
(404) 688-2700 ext. 116
Email: abeal@bbllp.com
www.bbllp.com
Please be patient. Hundreds of agents and former agents will be contacting this firm. They will get back to you.
[N.J.] Terminated Bergen Allstate Agent Files Suit
July 11, 2011, By Richard Newman, www.NewJersey.com
A longtime Allstate New Jersey Insurance Co. agent in Westwood says he was given a pink slip last month for
no reason, and he is suing the insurer to block the termination under a state franchisee protection law.
Mario De Luca, who has been selling Allstate insurance for 42 years, filed a complaint last week in Bergen
County asking the court to stop the termination that becomes effective Sept. 30.
Under a 1999 exclusive agency agreement with Allstate, De Luca is an independent contractor who can be
fired without cause. But the suit claims that by New Jersey's definition he is also a franchisee, and the New
Jersey Franchise Practices Act prohibits terminating franchise agreements without cause.
"It is our view that the agency agreement fits very snugly into both the letter and spirit of the franchise act," said
Minneapolis lawyer W. Michael Garner, who is representing De Luca. De Luca and other Allstate agents are
"captive agents completely dependent on Allstate for their livelihoods," Garner said.
The complaint is backed by the National Association of Professional Allstate Agents, an independent trade
group based in Mississippi. The outcome may have implications for other agents, according to Jim Fish,
executive director of the group.
"Several other long-term agents in New Jersey have received warning or termination letters as well," he said.
"It is our hope that Mr. DeLuca's case is successful and will set a precedent for other agents in New Jersey."
"We believe that [De Luca's] claim is not correct," said Danny Jovic, an Allstate New Jersey spokesman, who
declined to discuss specific details. "Allstate agents with exclusive agency agreements are independent
contactors and not franchisees," he said, adding that "no Allstate agent has ever been determined to be a
franchisee under any state's laws."
Allstate has until Aug. 5 to respond to the complaint.
The lawsuit also alleges that De Luca and other New Jersey Allstate agents are unfairly required to perform
additional work to obtain the same level of compensation as Allstate agents in the rest of the country, and that
the insurer violated "covenants of good faith and fair dealing" and set "arbitrary and unreasonable"
performance goals.
Allstate agents in New Jersey are paid 6.5 percent base commissions, while agents in other parts of the
country receive 10 percent, according to the complaint. New Jersey agents must meet performance goals to
earn more, the document said.

Allstate Taps Outsider Execs to Help Turnaround Bid
June 20, 2011, By Steve Daniels, Crain's
Allstate Corp. has hired a small army of new executives from outside the company to fill newly created senior roles
as it tries to reverse marketshare losses that have hobbled its stock price.
The best-known addition to the Northbrook-based insurance giant's ranks is Thomas Goldstein, former chief
financial officer at Chicago-based private-equity firm Madison Dearborn Partners LLC and former mortgage
executive and CFO at LaSalle Bank Corp.
Mr. Goldstein started in early April as CFO for Allstate Protection, the company's property and casualty division
responsible for the lion's share of revenue and earnings, a spokesman confirmed. He reports to Allstate Protection
CEO Joseph Lacher, a former Travelers Cos. senior executive who also is a relative newcomer to Allstate.
Allstate, traditionally an insular corporation that largely promoted from within, has dramatically changed course
under CEO Thomas Wilson and is turning to other financial services giants for talent. The new hires weren't publicly
announced; internal announcements were made when they were brought on.
They also include Barbara Higgins, former vice-president of customer experience at United Airlines, who began May
12 as Allstate's senior vice-president of customer experience and retention. She also reports to Mr. Lacher.
In April, Allstate hired insurance industry veteran Teresa “Terri” Dalenta as senior vice-president and chief risk
officer in Mr. Lacher's unit. Ms. Dalenta came from British insurance giant Aviva PLC, where she was chief risk
officer in its North American unit.
Allstate Financial, the company's much smaller life insurance unit, also has a new chief risk officer: Harry Miller, who
started April 11 and joined from Alico, the former life insurance unit of American International Group. He was chief
risk officer and interim head of investments and product development there. He reports to Allstate Financial CEO
Matthew Winter. A new chief operating officer at Allstate Financial, reporting to Mr. Winter, was publicly announced
earlier this year.
Allstate Corp. is under pressure from Wall Street as its core auto insurance business is shrinking, while that of
primary competitors State Farm Insurance Cos., Geico and Progressive Corp. is growing. Allstate's stock, trading
under $30 per share, is priced substantially below its book value.
Allstate Buy Of Esurance Could Help Progressive, Analyst Says
July 1, 2011, By Mark E. Ruquet, PropertyCasualty360.com
Allstate’s plan to acquire online direct insurer Esurance could benefit Progressive in part because of an
expected cutback in advertising, according to a financial analyst.
In an analyst’s note, Joshua Shanker with Deutsche Bank Securities Inc. says the acquisition by Allstate of
Esurance is no threat to Progressive, and could prove to be a benefit to the auto insurer. The reason, he says,
is that advertisement spending will decline as Allstate “retools its expanding multiple brand personalities.”
He notes that Progressive’s “Drive” campaign failed to create multiple identities for the company “and we
expect Allstate is two years away from this same conclusion.”
The $1 billion price tag for Esurance and the independent agency Answer Financial, both currently owned by
White Mountains Insurance Group, could end up slowing capital return and could prove to be expensive for
Allstate, he adds.
While Allstate is busy with Esurance, a direct auto insurer writer, the deal is distracting it from its homeowners
business, Shanker says. Premium rates for homeowners have increased 50 percent, he notes, but the line of
business is still not profitable. However, Progressive has managed to rehabilitate four of its major auto
insurance markets (Florida, Massachusetts, New Jersey and New York) and is preparing for growth in these
states.
Recent financial reports indicate that Progressive’s book is improving and with “corrected rate plans in place,
Progressive may have an opportunity to add customers.” He notes that second half earnings of Progressive
could surprise investors.

Post from the Allstate Agency Community Blog
“I just returned from the NAPAA convention, which was held this year in New Orleans. It was my third time for
this type of venue. As with before, I was impressed with the caliber of presenters, vendors and members who
were in attendance.
Even though recent announcements by Allstate could have turned the meeting into a "Bash Allstate" festival,
the agenda was steadfast and targeted toward providing support for agency growth and success. In my opinion
the common threads that bind all of Allstate's agents were never more evident than at this years meeting. It is
the level of professionalism and commitment to excel at what we do that was in full display yet again. Agents
who attended were not whiners. They are concerned. Attendees came with an open mind but I must say, with
a cautiousness that in my many years as a member, I have not seen before.
Among the many attendees were several non members, and I understand all have committed to join. To me
this speaks not only to the issues at hand but to the quality of the NAPAA organization.
For too long now, too many agents have been operating under a cloak of disinformation, and without the
benefit of an organization that can only add value to their agencies and their lives. To a man or woman, I met
agents (current and retired) who were thankful for NAPAA and expressed appreciation for the organization's
existence. NAPAA has never taken anything away from a single agent. NAPAA has never reduced agent
compensation, cost shifted expenses to agents, cut their pensions, eliminated their 401k's, utilized a job ending
quota system, or anything else detrimental to an agent.
We only wish we could say the same thing for Allstate.
If there ever was a time to join NAPAA......it is now. Never before have so many agents been at risk. With so
much to lose, it would seem only natural that agents would reach out to an organization that has as its charter;
"The Allstate agent's best interest at its heart." Nancy Fish, NAPAA Association Manager fields hundreds
of questions from members and non members alike. She is a patient caring person and knows what we are
going through.
But as we go forward, agents need to make a decision. Unfortunately this is not a new decision. Agents need
to decide if they want to exist in a world dominated by Allstate management, with little or no guidance until it is
too late. Or if they want to become a member of the only business organization that is designed to facilitate
their success and protect their interests.
If NAPAA had had 10,000 members in 1998, not a single agent would have signed the sham of an
"Agreement" Allstate forced us to sign. The take it or leave mentality each of us struggled with would have
never happened. For the new agents, this means you would have had the benefit of signing an agreement that
was bound, glued and stapled and would have been a true bilateral agreement. I am confident of this based
on NAPAA's past actions and the promises they have kept. I am just as confident of what Allstate will do in the
future based on its past actions. We now have increased quotas, ALI, EB, POSIS, mandatory training
(woople) to earn the commissions owed to us a second time, and more.
NAPAA is in the process of enhancing their membership benefits, but the time to join is now. I am not a
spokesman for NAPAA, but a firm believer in what they have done for us and also what they will do for us in
the future. I am passionate that if we do nothing, then Allstate will enact every bit of its hidden agenda, and we
will once again be left wondering what it would have been like "if only we had an organization like NAPAA."
We have NAPAA. It is now up to us to give a darn, and do something about it. This time there is no turning
back. There are no "Do Overs."
I encourage everyone to go to the NAPAA website link below. Call NAPAA at 877 627 2248. If you are a
member, get five agents to join. This time we all need to do something to help ourselves. Allstate will not.”

http://links.bgisystems.com/roadtripad
I’ve known Bill Gough for several years, but until the NAPAA conference in New Orleans this past
June, I never had the opportunity to hear him speak in person. He was not only terrific, but sincere
and genuinely interested in helping agents. In these challenging and uncertain times at Allstate, it is
imperative that agents learn and implement processes that will ensure their success. In my opinion,
any agent interested in continuing their career at Allstate should consider attending at least one of
Bill’s workshops.
Jim Fish
Allstate Announces Quarterly Dividend
July 12, 2011, Company Press Release
The Allstate Corporation (NYSE: ALL) today announced a quarterly dividend of 21 cents on each outstanding
share of the corporation’s common stock, payable in cash on Oct. 3, 2011 to stockholders of record at the
close of business on Aug. 31, 2011.
Letters to NAPAA
I just read this week's Direct Express and I must say you told it like it needed to be told.
The agents are in a world of hurt, yet the company either doesn't believe it or has its head in the sand, which,
of course, means your tush is in the air, begging to be kicked! Any agent who doesn't join NAPAAA is being
terminally foolish. The message is all too clear, we're an easy target for the competition and they are about to
pull the trigger. Best-ever Direct Express.
______________________________________
Really good article in last week’s DirectExpress. It was the most critical piece on the company I’ve read.
However, I believe the writer missed the mark. The tremendous amount of advertising and the perception of
low rates is what drives people to Geico and Progressive.
In my experience, Allstate often has better rates. Where we lose business is to State Farm, Liberty Mutual,
Shelter, and almost all independent carriers. If I could be the only agent Geico and Progressive customers talk
to, I could write more business. But when someone is motivated to shop, they usually call other companies
also.
_____________________________________
Most Allstate agents provide really good service. What makes customers unhappy are the high rates. When we
do manage to write customers from Geico and Progressive, we hear plenty of service complaints about them.
The idea that policyholders will get better service from fewer but larger agencies than they do from 20 to 30year
veteran agents is absolute nonsense. The truth is this: the company will cut costs to service the business
and at 8% comp, agencies will need more premium volume in order to “net” any income. Sure, gross revenues
may rise, but it’s what we take home to mama that counts.

Allstate’s Latest N.Y. Suit Seeks $1 Million for Alleged Insurance Fraud
July 10, 2011, By Jaime L. Brockway, Insurance & Financial Advisor [Excerpt]
Allstate, the Hauppauge, N.Y.-based insurance company, sued 10 New York people to recover more than $1
million, alleging that laypersons illegally owned and operated four professional service corporations.
Allstate filed a complaint under the Racketeer Influenced and Corrupt Organizations Act, alleging that
four professional service corporations, a licensed psychologist and five laypersons illegally owned and controlled the
professional corporations.
The suit also alleges that the defendants submitted or facilitated the submission of claims for psychological services
through professional corporations that were never eligible to collect no-fault insurance benefits.
The lawsuit, Allstate third insurance fraud lawsuit this year, seeks reimbursement for personal injury protection
benefits Allstate paid on behalf of its customers during timeframes specified in the lawsuit.
Since 2003, Allstate has filed 30 fraud lawsuits in New York, seeking nearly $169 million in damages, according to
the company.
http://www.twfgga.com/
Allstate Sues Morgan Stanley Over Mortgage-Backed Securities
July 7, 2011, By Chad Hemenway, PropertyCasualty360.com {excerpt]
Allstate Corp. has added to its tally of New York lawsuits seeking to recover investment losses on residential
mortgage-backed securities with a filing against Morgan Stanley.
“We allege that the offering documents contained untrue statements and omitted material facts,” says Allstate
in an email.
The Northbrook, Ill.-based insurer has filed similar lawsuits against Countrywide, Citigroup, Deutsche Bank,
Credit Suisse, Merrill Lynch and J.P. Morgan Chase. In each lawsuit Allstate seeks damages, including
rescission, monetary losses, attorneys’ fees, other costs and interest.
This most recent lawsuit, filed July 5 in state Supreme Court in Manhattan, alleges that between 2005 and
2007, Allstate bought more than $104 million in mortgage-backed securities from Morgan Stanley and its
affiliates, which misrepresented the quality of the mortgages.
Additionally, interviews Allstate did with former Morgan Stanley employees reveal that the global financialservices
firm “was well aware of the poor quality of the loans it purchased, securitized and sold to Allstate,”
according to the complaint.
Allstate’s suit against J.P. Morgan Chase & Co. is over more than $750 million in mortgage-backed securities
purchased. The insurer has another lawsuit against Bank of America’s Countrywide Financial Corp., seeking
damages related to its purchases of more than $700 million in mortgage-backed securities from the company.
We finance Allstate insurance agencies.
Capital Resources 866.523.6641
info@capitalresources.com www.CapitalResources.com

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Surgical Center Owner Sued by Allstate
July 2, 2011, By Kathleen Lynn, The New Jersey Record [Excerpt}
Allstate Insurance has sued the former owner of a Saddle Brook surgical center, seeking reimbursement of
$4.8 million in benefits. The suit says John C. Quinn's ownership of the Market Street Surgical Center despite
past legal problems, violated state law.
A spokeswoman for the state Department of Health said Friday that Quinn is no longer an owner of the center.
The state approved the transfer of ownership to Allisan Emes last October.
The Allstate suit says Quinn obtained a state license to operate the Market Street Surgical Center in May 2002.
In April 2008, according to the state attorney general, Quinn pleaded guilty in Superior Court in Bergen County
to charges he billed at least 10 insurance companies for administering anesthesia to at least 27 patients at a
time when his nursing and nurse-anesthetist licenses had expired.
In 2004, as a result of these actions, the state nursing board suspended his license for five years, according to
the attorney general.
Allstate's lawsuit says that under New Jersey law, the guilty plea should have barred Quinn from owning or
operating a medical facility. Allstate is seeking the reimbursement of benefits, which were paid through autoinsurance
policies, plus triple damages.
Letters to NAPAA
It is NAPAA's editorial policy to publish letters submitted by our readers. Just because we publish a letter, does not mean the NAPAA
Board agrees with, supports or endorses the letter's content or the writer's opinion. Also, NAPAA reserves the right to edit any material
submitted for offensive or inappropriate language, length, tone and civility.
For some reason, many agents are still afraid to join NAPAA. I guess they fear they will be found out and fired.
What foolishness because they’re being fired for myriad other reasons, joining NAPAA should be the least of
their worries. Maybe they think any organization such as ours is akin to unions. And of course, many people
are fearful of that. But as I see it, we really have no recourse. Solidarity is what’s needed right now. I really
have a hard time wrapping my mind around the apathy many agents seem to be wallowing in. If you beat a
horse enough, sooner or later you will make him a dead horse and that appears to be the company’s plan.
______________________________________
Post from the Agency Community Blog (minimally edited for spelling and punctuation):
Re: How's your Morale?
The importance of this discussion thread cannot be understated. Agents all across the country are living in fear for
their financial future, and this is just fine with Allstate. If it were not fine with Allstate, and if Allstate were the caring,
concerned partner they claim to be, then we agents would be in immediate discussions on how to best address our
concerns. Allstate will never engage in this act, as it goes against their plan.
But unless and until every single agent finally wakes up and takes responsibility for their future, Allstate will continue
to implement every single aspect of THEIR HIDDEN AGENDA.

WE ARE NOT PARTNERS..... WE ARE DISPOSABLE TOOLS....PERIOD!
Partners talk to one another. Allstate can yammer all they want about the agent being the center of their universe
and how they want the agent to be available for their "loyalists" who demand an agent, but the cold hard fact is that
Allstate is trying its darndest to eliminate us from their marketing strategy. They don't want a conversation with the
agency sales force; they want to dictate to us everything they want us to do.
How do they do this?
Terminate agents
Add New quotas
Increase quotas
Reduce compensation or eliminate compensation
Add Training requirements
Mandate Corporate Objectives
Mandate Office Hours
Mandate Call forwarding of Agent owned "Goodwill"
Sell through 800 number
Sell through Internet
Does any of this even remotely sound like the relationship of an "Independent Contractor" with a partner?
FOR CRYING OUT LOUD.....When will it finally become apparent to every agent that we are not Allstate's partners?
When will agents finally realize we are EMPLOYEES, and nothing more to Allstate than DISPOSEABLE TOOLS?
I cannot fathom why agents cry out for help and then look the other way when a hand is extended from NAPAA.
I cannot believe there is one agent (even a mega) who is not absolutely livid over the constant changing of the
playing field we so lovingly call our "AGREEMENT."
So...here is the challenge....I want to see NAPAA's membership increase by 1000 new members by the end of this
week. I want every agent who reads these posts and shakes their head over the sad state of their relationship with
Allstate to finally do something about it. NOW!
Then, I want NAPAA's membership to increase by1000 every week until we reach 9000 members.
Then and only then can we begin a legitimate discussion with Allstate. We need a voice. We need NAPAA to be that
voice. We need every agent to fork over a paltry $350. Think about how much you will lose for the sake of not
investing $350 in your future.
Shame on us all if we have an opportunity to take action, but instead chose to watch as our brothers and sisters are
marched off to their financial death. And lest we forget, any of us could be next.
Katherine Mabe to Join Allstate as President, Allstate Protection
Central/West Regions
June 24, 2011 /PRNewswire
Katherine Mabe will join The Allstate Corporation (NYSE: ALL) on July 11 as president, Allstate Protection
Central/West Regions. She will report to Joseph P. Lacher Jr., president, Allstate Protection, and will be a
member of Allstate's senior leadership team.
"We have ambitious plans to profitably grow our business in an increasingly competitive industry," said Lacher.
"Kathy has outstanding experience in our industry, and in a wide range of senior management roles, as well as
the leadership and vision we need to accomplish our goals."
From 2010 to 2011, Mabe was president and chief executive officer of the Economical Insurance Group, one of
the largest property-casualty insurance companies in Canada. From 1982 to 2010, she held a number of
management roles at Nationwide, including president of its specialty products division and president of two
Nationwide subsidiaries, Titan Insurance Company and Victoria Insurance Company.
Mabe received a bachelor's degree from Ohio State University and an MBA from Ohio State's Fisher College of
Business. She is active in organizations and boards in both the U.S. and Canada including the YWCA, the Canada
Women's Forum and the International Women's Forum. She has received a variety of professional awards, including
the title of Kellogg Executive Scholar, Sales and Marketing at Northwestern University. She has also received the
Ohio Diversity Council's Most Powerful and Influential Women in Ohio Award.

Economical Mutual Names CEO With Demutualization Experience as
Former CEO Joins Allstate
June 28, 2011, By Diana Rosenberg A.M. Best Company, Inc. [Excerpt]
Economical Mutual Insurance Co., the large Canadian property/casualty insurer looking to demutualize, named
industry veteran Karen L. Gavan as its new president and chief executive officer. Gavan, who is overseeing
demutualization efforts and held a senior management position with Canada Life Assurance Co. during its
demutualization, succeeds Katherine A. Mabe, who served as CEO less than a year.
Mabe, who was appointed CEO of Economical in December, 2010, is joining Allstate Corp. (NYSE: ALL) as
president of Allstate Protection central/west regions. She will report to Joseph P. Lacher Jr., president of
Allstate Protection, and will be a member of Allstate's senior leadership team.
The management change comes one month after the Waterloo company scored a major victory in a dispute
with dissident shareholders, who had sought to throw out the entire board. At the mutual company's annual
policyholder meeting May 26, a 77.2% majority of policyholders rejected a petition to replace the board of
directors, and Gavan and two others were elected to the board (BestWire, May 27, 2011).
Demutualization would require approval of regulators and policyholders. The move would make Economical
the first property/casualty insurance company in Canada to demutualize.
The National Association of Professional Allstate Agents, Inc. is a nonprofit professional trade association
for Allstate agents. NAPAA provides its members with reliable communications on issues that affect agency
owners and their customers every week. NAPAA further serves its members by acting on their behalf and
speaking with a distinct and unfettered voice on a wide range of issues. Our operations, including our
publications, Website and office expenses are funded by member agents who pay membership dues.
Please support NAPAA with your membership today. www.napaaUSA.org
http://www.napaausa.org/Upload/Printable%20app%20Elite%20Gold.pdf
NAPAA is a professional trade association, membership dues may be paid annually, or monthly by EFT
automatic draft from your chekcing account. Dues are tax deductible as an ordinary business expense.
Note on letters: The opinions expressed in letters are not necessarily those of NAPAA. Letters should be brief and are subject
to editing. We will publish letters anonymously; however, we will not accept letters sent anonymously.
The views expressed by NAPAA, or any of its positions relative to its activities and those of its members' actions on behalf
of this organization, are expressly those of NAPAA, and do not reflect the views or opinions of Allstate Insurance
Company, or any of its affiliates.
This newsletter may not be redistributed or reproduced in any form, including electronically, without prior written
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Contact Information for Agent Informer Newsletter & NAPAA Headquarters:
National Association of Professional Allstate Agents, Inc. (NAPAA)
P.O. Box 7666, Gulfport, MS 39506-7666
Toll free Phone: 877/627-2248 Toll free Fax: 866/627-2232
E-mail: ExecutiveDirector@napaausa.org Web Site: www.napaausa.org