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Buying An Allstate Insurance Agency

Before buying any insurance agency book of business, make sure to do your due diligence and research the product, the company, their underwriting process (how strict it is, etc.), and the local market. Here are a few questions you should ask:

buying an allstate insurance agency

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If you are a potential buyer of an agency, you need to keep in mind a set of challenges and risks that are specific to this process. The first will be the regulatory considerations that are essential in the whole framework. You'll need an Insurance Producer License to sell insurance products. Moreover, the license must mention the correct lines of business and should not be expired.

3. Sell statewide. As a exclusive Allstate agent, it is important to maximize the number of prospects you speak with in order to grow your agency in a smart manner. Contactability allows you to take calls from anywhere in your state. You can speak with insurance buyers that are comfortable buying from someone they trust and from an established brand. The more people you speak with looking to buy insurance, the faster you can grow your book of business and your agency.

Last October, Allstate acquired CNA Personal Insurance, which represents $2 billion in personal lines premium and relationships with over 4,000 independent agents. Ernest A. Lausier, president of Independent Agency Markets, said the acquisition coincided with Allstate's overall growth strategy to be a multi-brand, multi-channel company."Allstate really did its homework in researching the way consumers buy insurance," Lausier says. "While there are many who appreciate working with Allstate agents, there is another large segment that really values the independence and the choices that independent agents can provide."Importance of independent agentsThrough IA Markets, a new autonomous business focused exclusively on customers who buy through an independent agent, Allstate will reach a completely new group of consumers, representing one-third of the personal lines insurance market and $45 billion in premium, Lausier says.Prior to the acquisition, CNA PI had demonstrated success with its leading package product, its highly valued claims service and state-of-the-art upload. The real value of the CNA PI franchise, though, was its agency relationships, best expressed in the PACER agent council, which provides a regular forum for the exchange of ideas with CNA PI leadership.As a market leader, Allstate brought a well-known set of strengths to the transaction: capital strength as well as personal lines leadership and expertise.IA Markets expects to transform the independent agency business by using the strengths of both companies and focusing exclusively on independent agents and their customers. "We can avoid the conflicts and compromises that burden most companies that are trying to serve too many different markets," says Lausier. "We will be able to focus on developing the best solutions for independent agents in a dramatically changing world."IA Markets intends to be the market leader and the company of choice for independent agents. That work began when Lausier took the helm of CNA PI in 1997. "As a company, we went from being the least automated to winning ACORD's Most Improved and Company of the Year awards," says Lausier. "We significantly expanded our customer reach through tiering. In other words, we delivered. I understand that our agents are looking at this transaction the same way--they will judge us on our execution."And the new IA Markets is hard at work to deliver. "We are making a major investment in a leading edge Internet-based technology to create new capability that reduces costs and improves customer service," says Lausier. "Our technology vision centers on a true 'once and done' experience, delivering policy service capability via the Internet at the click of a mouse. By providing real time underwriting decisions, edits and rates, our agents can be confident in the final rate and company acceptance at the point of sale."IA Markets characterizes this vision as the "One Contact Experience" to provide the ultimate in customer experience. "It means that if you are dealing with customers, whether they are new clients or existing ones, you will be able to interface directly with our systems, via the Web, to obtain accurate information on a timely basis," says Lausier. These Web-based tools will bridge to agency management systems and comparative raters to support current agent workflows.But the bottom line is to take agents out of the transaction service business and enable them to serve as trusted advisors to their customers. "We are making the investments to take time, cost and errors out of the process and put the independent agent in a better position to solve his/her customer's insurance problems and to acquire new customers.""Our goal is to create something so powerful for the independent agent that it appeals to the best personal lines agents in the country who are willing to make the commitment to be our business partners,"--Ernie LausierIA Markets' commitment to technology underscores a change in the independent agency environment. "We understand that technology has become so important to an agent's success in the marketplace that it has really become 'product'."While the new platform is being developed, CNA PI has provided a state-of-the-art Internet solution for agents to transact business through CNA Exchange. Currently, agents are uploading 50% of new business and 25% of eligible endorsements. Through CNA Exchange, agents gain efficiencies now while becoming accustomed to what will be our future--a browser-based platform."However, this utilization didn't happen overnight," says Lausier. "We developed agent technology specialists to work with agents in their offices to help them fully utilize our technology. In addition, we have retooled our sales specialists into more automation-savvy resources for agencies. We also have help desks and online training materials to support our agents. Our agents understand that by using CNA Exchange today, they will be able to move easily to our new platform. It's like making a Windows upgrade."Lausier continues: "The new platform is just one of our priorities for 2000. We will improve our bottom-line profitability, integrate into Allstate or "unplug" from CNA, add product as well as enrich our top-selling Universal Security Policy (USP) and deepen our agency and employee relationships."One of the significant benefits of the acquisition of CNA PI is the increased capability that Allstate brings, according to Lausier. "Personal lines is Allstate's core business," said Lausier. "Instantly, we have access to rich customer research. Allstate's expertise in pricing is an enormous advantage. Furthermore, the economies of scale that Allstate brings to us will help us to take cost out of the operation."IA Markets' success is inextricably linked to independent agents. "Our goal is to create something so powerful for the independent agent that it appeals to the best personal lines agents in the country who are willing to make the commitment to be our business partners," says Lausier."We really do see this as a partnership between the company and the independent agents who choose to do business with us," says Lausier. "One of the incredible strengths that our employees offer is an understanding and appreciation of independent agent interaction with the company. These are professional insurance people who are dedicated to helping our agents to win.""In addition to PACER, our agents play an important and active role in providing marketplace perspective, which enables both of us to be more successful," Lausier continues. "Our State Strategy Teams are an example of involving agents at the state level on issues of products, pricing and customer strategy."Lausier says that IA Markets expects to adopt a new name for CNA PI. "We are dedicated to creating a branding strategy that will further distinguish and support the independent agent experience in the personal lines marketplace. The most important point is that we are dedicated exclusively to the independent agency system. We will be adopting a name that will be used exclusively for the independent agency market. The name will reflect our commitment to independent agents."Lausier is passionate about the business. "What's so powerful is that we are really creating something new, a new footprint in the marketplace. Both our employees and our agents see the potential and are excited about what we can accomplish together."ReflectionsThe moves thus far indicate that Allstate may well prove to be a better partner than many of the other independent agency companies. They have made a significant investment in the system and appear ready to continue that support. And it never hurts to have a company with a $30 billion marketing clout behind you.The real test will be over the next few years. Allstate has a significant advertising and marketing budget. How will that budget be allocated? Will its support for independent agents continue to be strong and real, or will independent agents be relegated to just another marketing experiment? The significant investment that Allstate already made indicates a serious commitment, as do the company's plans for the future.Prior to the purchase of CNA Personal Insurance, Allstate already had extensive experience working with independent agents. In addition to the 15,500 full-time Allstate agents representing the company at the end of 1998, there also were 3,000 independent agents located primarily in rural areas. And nearly 13,000 independent agents and brokers were writing business through Deerbrook Insurance Co.The Allstate Corporation is the nation's largest publicly held personal lines insurance company. Its main business units include Allstate Personal Property and Casualty, which provides insurance for more than 14 million households; and Allstate Life and Savings, which markets a number of life insurance and savings products under a variety of brands through a number of channels. It is currently the nation's 17th largest life insurance business.Founded in 1931 as part of Sears, Roebuck & Co., Allstate became a publicly traded company in 1993. At the time, its initial public offering was the largest in U.S. history. On June 30, 1995, it became a totally independent company after Sears divested its remaining shares to Sears' stockholders.Allstate, based in Northbrook, Illinois, is one of the nation's leading insurers in urban areas and has supported auto and highway safety reforms, including seat belts, air bags and teen driver education. The company has won numerous awards over the years for its philanthropic and employee volunteer efforts. *COPYRIGHT: The Rough Notes Magazine, 2000 041b061a72


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