Why Are There So Many Allstate Agencies for Sale Now?

I was interested at all so I didn't get into any details but I assume to either purchase an agency or start scratch.
Yeah I hear you, there are about 5 Allstate agencies for sale in my area and they have been for several years now. I guess those Allstate guys just got so rich they can't take it anymore, ;-)
 
I was interested at all so I didn't get into any details but I assume to either purchase an agency or start scratch.



I got the same call. Message on my answering machine mentioned something about exclusive agent openings I think. Not sure exactly and already deleted. They must have been calling through IN agents.
 
I love when someone has an Allstate policy. They are so expensive, that I blow them out of the water every time.
 
Here is a quote from the RunningClock:

Some observations that all EAs need to be aware of:

Allstate has studied every EA situation from existing agents to new agents. They know how much production to expect from outside buyers with X amount of capital to invest in their new agency, and they know how much to expect when the buyer has Y to invest. They know what type of production to expect from mergers based on agency size. They have expectations on how much to expect from new scratch agencies and how likely are they to succeed. With the higher initial capital requirements new agents are doing better over the past 18 months than those hired earlier. The expectations of new buyers and new scratch agencies are greater than allowing existing below average agents to continue operating. It is their opinion that many of the purchases in past years were for more than they would have liked, that it left the new agent with higher payments and less capital to invest into the agency. That is one of the reasons they are placing a great deal more pressure on existing agents that they have targeted as being below average. They want to make sure they have a supply of agencies for sale so that it will be a buyers market, not a sellers market. They want existing agents to get as little as possible leaving more capital for the new agent to spend marketing and running the agency and less on agency acquisition. This is why they expect field sales managers to be highly involved in every transaction often times interferring if they think the sales price is too high, leaving less capital for the new agent after the sale is completed. This is a thought out and discussed business strategy that the managers are expected execute. One thing they are now learning is that when an agent takes TPP instead of selling and the accounts are assigned to the CIC they are not retaining well. They are now realizing that someone who bought insurance from a local agency does not want to be transferred to a call center. They are now trying to figure out what is best for TC in that scenario and we can expect changes to that process, what and when I do not know. They will try a number of different things. For now the accounts that they are not paying commission to agents on is helping improve the bottom line, but at the expense of market share. They are finding that personal touch loyalist customers with good credit and claim experience will leave and the worst will stay causing some adverse selection.

Something else that is on the way to the US is company owned stores. They will open retail stores with several employee agents working out of them much like they have done in Canada 1) it will provide a place for the TPP accounts to be assigned, hopefully satisfying the personal touch loyalist customers 2) they will hire younger agents who they expect will be motivated to work harder for less than existing EAs 3) the new agents that Allstate wants to keep will be used to replace the existing EAs that are being targeted as below average 4) it will provide a training ground for new managers. If the company store experiment is successful and provides a higher ROI to the company the program will be expanded, and increased pressures will be placed on existing EAs who generate a lower ROI for the company. Existing EAs will constantly have higher expectations that they will only be able to meet by operating with higher expense ratios and less profit.TC will attempt to manage the supply of buyers and the supply of sellers so that they can keep agency prices low yet still have significant turnover among below average agents. The company stores will be starting this year, maybe one or two already in existence, but for sure they are coming over the next few years.

I am worried about my long term future with TC, but still feel for me the best decision is to try an improve my agencies performance as evaluated by TC because my agency is still very profitable to me even though I now operate at a higher expense ratio with a lower profit margin. I am constantly pulling as much money out of my agency as is feasible to diversify my assets. Always keeping a close eye on the TC and doing my best understand what is going on. One thing for sure TC will only communicate the propaganda they want us to hear and not the real story.
 
Here is a quote from the RunningClock:

Doesn't the idea of a "company" store and "employee" agents actually go backwards,....Weren't older agent Employees of the company in the old days...This is what I was told when I interviewed for a PFS position about 5 years ago.
 
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