Crain’s Chicago Business reported that the Illinois-based Allstate had topped an agent rely of 12,000 in recent times, earlier than the decline occurred.
It was reported that on prime of the agent reductions, Allstate brokers’ bodily storefronts have additionally dropped in quantity. Hundreds of the insurer’s brokers have been urged to as a substitute work out of their houses, as Allstate inspired gross sales reps to make the most of centralized name facilities to supply companies to purchasers.
There are additionally issues that Allstate could also be forgoing brokers and transitioning to direct gross sales, with CEO Tom Wilson expressing curiosity in promoting insurance coverage and different merchandise by completely different different channels other than brokers – and that change could also be occurring earlier than later.
Last yr, the corporate’s brokers accounted for 38% of latest auto insurance policies, in contrast with 71% in 2020, Allstate’s SEC submitting revealed. Meanwhile, direct gross sales to prospects both by the web or telephone made up 35% of gross sales in 2022, in comparison with 24% in 2020. Independent brokers (27%) accounted for the remainder of the gross sales the corporate made final yr.
It needs to be famous that Allstate launched a reduction system in 2020, which allowed prospects buying auto insurance coverage instantly from the corporate to save lots of 7% on their prices, versus buying from an agent.
An affiliation of Allstate brokers expects the variety of agent gross sales to proceed falling over time.
“We see trends going toward fewer and fewer agents on Main Street USA,” mentioned National Association of Professional Allstate Agents (NAPAA) government director Ted Paris.
It was additionally noticed that Allstate modified its agent compensation system in recent times, decreasing what the insurer pays its brokers on prospects’ renewals whereas rising pay for brand new enterprise. This, Crain’s Chicago Business reported, has pressured a number of brokers to depart the enterprise.
News of Allstate’s lowered agent rely comes after Bloomberg earlier this yr broke the information that the insurer turned to its pool of lately fired tech employees to overtake its enterprise. The insurer is trying to push for expertise reminiscent of telematics-powered auto insurance coverage, user-friendly cell functions, and AI-assisted insurance coverage quotations.