Allstate Sees First U.S. Sales Force Growth Since 2007; Canada Also Higher
February 25, 2014 by Michael Buck
NORTHBROOK, Ill. – Allstate Corp. in 2013 saw a rise in its U.S. exclusive agency sales force, the first time that figure has grown since 2007 because of declines brought on by planned agency consolidations and mergers, the company said in its annual financial filing.
The company in 2013 had about 9,600 exclusive agencies in the U.S., which is up from 9,300 agencies in 2012. Allstate in 2007 reported having 13,200 agencies (Best’s News Service, Feb. 21, 2013).
Allstate President, Chairman and Chief Executive Officer Thomas J. Wilson on a recent conference call said the company is focusing on growing its policies-in-force count in 2014 in an attempt to grab market share. Allstate has worked for several years to re-position its homeowners business and re-engage its sales force. During this time, the company reported lower policy count figures in its Allstate-branded homeowners and standard auto businesses.
“We had a tough transitional period,” said Matthew Winter, Allstate’s president of personal lines, during a fourth-quarter conference call. “We had to do some hard work as a company to change and improve the productivity and efficiency of the agencies. Some of that involved compensation changes to shift towards more variable compensation, to spur and incent growth and give them a reason to take a leap of faith and invest in their agencies, even though, at that time, they were declining in size.”
Winter said the exclusive agency retention rate in 2013 was 92%, compared to about 80% in the few years previous. That means fewer agents are leaving the system and its now building on itself, leading to growth, he said.
Allstate namesake-branded homeowners business in the fourth quarter reported its policy count was flat from the third quarter, marking the first time in at least the past seven quarters that it did not lose policies in that segment. The company in the second quarter reversed a prolonged policy count slide in its namesake-branded standard auto business, a trend that continued through the fourth quarter (Best’s News Service, Aug. 1, 2013).
Allstate saw other areas of expansion in 2013, according to information revealed in the annual filing with the U.S. Securities and Exchange Commission. The company said it saw a slight uptick in its number of Canadian producers, ending 2013 at about 710, up from 670 in 2012.
Esurance, Allstate’s direct-to-consumer arm, began offering homeowners insurance in three states in 2013, the filing said, which is more than company executives have previously said. The company in late October began offering homeowners insurance in Wisconsin. It also offers the cover in Oregon and Arizona, according to the Esurance website.
Allstate also moved its excess and surplus lines carrier, North Light Specialty Insurance Co., into two more states in 2013, bringing the total number of active states to 33, the company said in the filing. Allstate offers a homeowners product through North Light “in certain areas with higher risk of catastrophes.”
Allstate Insurance Group companies currently have a Best’s Financial Strength Rating of A+ (Superior). Midday Feb. 21, shares of Allstate Corp. (NYSE: ALL) were at $53.87, up 0.76% from the previous close.
(By Michael Buck, senior associate editor, BestWeek: Michael.Buck@ambest.com)