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Will Allstate agents unionize?

By Jay MacDonald · Bankrate.com
Tuesday, August 9, 2011
Posted: 9 am ET

Remember the classic sales contest scene from "Glengarry Glen Ross": First prize is a Cadillac Eldorado, second prize is a set of steak knives and third prize is you're fired? That's the game a group of Allstate agents says the insurance giant is playing with their livelihoods.

According to Insurance Journal, the National Association of Professional Allstate Agents plans to poll members by mid-August on whether to form a guild affiliation with the AFL-CIO, a move it hopes will convince one of the nation's largest car insurance and homeowners insurance companies to lighten up.

The group, which numbers about 1,200 or 10 percent of all Allstate agents, claims the insurance company is treating them like employees instead of independent agents by manipulating the rules, shedding longtime agents, cutting agency compensation and destroying morale.

NAPAA executive director Jim Fish says the move follows years of member complaints about treatment under Allstate CEO Tom Wilson. Some agents say they face a 20 percent cut in compensation; others say Allstate has threatened them with third prize if they fail to meet production requirements.

Fish says the company has made clear that it wants agencies to maintain $3 million to $4 million in policies, bad news for those that lack the resources to grow their book. Allstate maintains it takes an office of that size to provide the level of service it needs to protect its brand.

Beneath the surface, this dust-up gets uglier. Fish blames Wilson for purposely dropping longstanding agents to bring in younger, hungrier, Twitter-savvy replacements, in part to stem the exodus of clients to insurers like Geico and Progressive with higher online profiles.

"It is since he came on board that they've lost a million households; that's a lot of households to lose. Why are they losing those households? Because maybe he's getting rid of these agents who have 92 percent retention ratios and casting them aside," Fish said

The NAPAA failed in a previous union bid in 2002, falling just one vote shy of approval by the National Labor Relations Board.

IJ reader reactions to the news were mixed:

"Pie in the sky promises is how all captives work."

"I think Allstate has hired the Mayhem guy as their CEO."

"Unions of late have done more harm than good ... huge mistake."

"But I thought I was in good hands!"

What's your take? Are Allstate's disgruntled agents biting the good hands that feed them? Or should Allstate wash those hands and clean up its act?

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1 Comment
David R
August 09, 2011 at 11:10 am

If Wilson is indeed getting rid of experienced agents who have very high retention rates, despite their inexperience with Twitter, then he's doing a terrible job as CEO and will drive the company into the ground. But I fail to see how unionizing is going to save the company in that case.

Or could it be that the 92% number is a single anecdotal case, and that there were other compelling reasons to get rid of that person?