Allstate CEO Discusses The Art Of Performance Management?

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http://online.wsj.com/video/allstate-ce ... 637D7.html


When going to the above URL address, click onto:
Allstate CEO on the Art of Performance Management 2/8/2011 1:36:59 PM
Allstate CEO Tom Wilson explains how he masters the art of performance management for his employees.
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*In this snippet interview, Tom Wilson discusses being honest with employees while treating them with respect.
I do not know Mr. Wilson or his character, but the concept he is sharing seems genuine enough.

If Mr. Wilson is being honest and truly believes what he is relating, then there is a huge chasm between he and the managers who run the claims offices as well as the managers who oversee the sales agents offices.
This begs the question, "Mr. Wilson, are you truly that far out of touch with what is going on in your organization?
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*When Shareholders And Employees Lose Confidence In The Leader At The Helm, It's Almost Impossible To Turn That Opinion Around - RatPak11


http://www.chicagobusiness.com/article/ ... lson-board



At Allstate annual meeting, 'no' votes grow for CEO Wilson, board members
By: Steve Daniels May 20, 2011

(Crain's) — Allstate Corp.'s shareholders are getting restless.

At the Northbrook-based insurance giant's annual meeting on Tuesday, nearly one-third of voting shareholders opposed Chairman and CEO Thomas Wilson's re-election as a director.

Just 6% voted against Mr. Wilson in 2010. This year, opposing votes surged to 126.7 million from 22.7 million last year.

Likewise, shareholders voted in big numbers against all of Allstate's other board members.

For example, Joshua Smith, managing partner of consultancy Coaching Group and an Allstate director since 1997, squeaked by with 53% of shareholders backing his re-election to the board. H. John Riley Jr., a director since 1998 and chairman of the all-important compensation and succession committee, garnered just 54%. Both those directors were approved in 2010 with close to 90% majorities.

“We believe the voting results reflect shareholders' frustration with management and the board of directors,” analyst Greg Peters of Raymond James & Associates in Chicago wrote in a note Thursday.

“We believe investors would look favorably on a change in management; however a change is unlikely to have an immediate impact on results,” he added. “As we have written about in the past, we believe management continues to have a growing credibility problem with the absence of top-line (unit) growth despite elevated advertising expenditures and its seemingly reactive (as opposed to proactive) approach to loss cost/underwriting trends.”

In response, an Allstate spokeswoman emailed simply, “We are pleased that the shareholders' vote re-elected the Allstate board of directors."

The increase in unhappy shareholders reflected in the voting was lost in the news earlier this week of Allstate's $1-billion deal to acquire online auto insurer Esurance—a potentially important transaction that could help Allstate better compete with online auto insurers Geico and Progressive Corp., which have been taking marketshare from Allstate, the nation's second-largest car insurer.

But Allstate's lagging stock price, trading well below its book value, barely budged in response. The stock was closed at $32.01 Friday, compared with $32.42 at the close on Tuesday, the day before the Esurance deal was announced.

Allstate has seen auto premiums and number of policyholders fall steadily over the past two years, while Geico, Progressive and even archrival State Farm Insurance Cos., the nation's largest car insurer, have seen increases.

Mr. Wilson, 53, an Allstate executive since 1995, became CEO in 2007 and was made chairman in 2008.



What do you think?
Comment: (optional)

John D. wrote:
Maybe their lagging results are a reflection of the horrible way they treat their employees.....and a not surprising result of their outsourcing the jobs of many of their most experienced employees. Home town insurer??? Bahhh! All their good paying high tech jobs have been moved to Ireland. The stockholders should boot the whole lame bunch out. Allstate stock has been languishing at the $30 dollar mark for years (and years and years). Sure glad I dumped mine!!!
5/20/2011 10:37 PM CDT on Chicago Business



Ed L. wrote:
It's obviousthat Allstate needs new leadership. Current board members are just not that smart. Time to move on.
5/20/2011 4:37 PM CDT on Chicago Business

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http://www.chicagobusiness.com/article/ ... /110619891


Allstate taps outsider execs to help turnaround bid
By: Steve Daniels June 20, 2011

(Crain's) — Allstate Corp. has hired a small army of new executives from outside the company to fill newly created senior roles as it tries to reverse marketshare losses that have hobbled its stock price.

The best-known addition to the Northbrook-based insurance giant's ranks is Thomas Goldstein, former chief financial officer at Chicago-based private-equity firm Madison Dearborn Partners LLC and former mortgage executive and CFO at LaSalle Bank Corp.


Mr. Goldstein started in early April as CFO for Allstate Protection, the company's property and casualty division responsible for the lion's share of revenue and earnings, a spokesman confirmed. He reports to Allstate Protection CEO Joseph Lacher, a former Travelers Cos. senior executive who also is a relative newcomer to Allstate.

Allstate, traditionally an insular corporation that largely promoted from within, has dramatically changed course under CEO Thomas Wilson and is turning to other financial services giants for talent. The new hires weren't publicly announced; internal announcements were made when they were brought on.
They also include Barbara Higgins, former vice-president of customer experience at United Airlines, who began May 12 as Allstate's senior vice-president of customer experience and retention. She also reports to Mr. Lacher.

In April, Allstate hired insurance industry veteran Teresa “Terri” Dalenta as senior vice-president and chief risk officer in Mr. Lacher's unit. Ms. Dalenta came from British insurance giant Aviva PLC, where she was chief risk officer in its North American unit.

Allstate Financial, the company's much smaller life insurance unit, also has a new chief risk officer: Harry Miller, who started April 11 and joined from Alico, the former life insurance unit of American International Group. He was chief risk officer and interim head of investments and product development there. He reports to Allstate Financial CEO Matthew Winter. A new chief operating officer at Allstate Financial, reporting to Mr. Winter, was publicly announced earlier this year.

Allstate Corp. is under pressure from Wall Street as its core auto insurance business is shrinking, while that of primary competitors State Farm Insurance Cos., Geico and Progressive Corp. is growing. Allstate's stock, trading under $30 per share, is priced substantially below its book value.

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What do you think?

Frank W. wrote:
Allstate has under-performed its peers while Tom Wilson has been CEO. Tom was "the chosen one" 20 years ago while Allstate was still a part of Sears. He followed Ed Liddy to Allstate and, by plan, became CEO once Ed retired. Although a pleasant and smart man, Allstate's performance under his leadership has been "Sears-like." It would seem the new cast of executive talent should also include a new CEO. Tom is a vestigial Sears executive.
6/21/2011 9:52 AM CDT on Chicago Business


Marty S. wrote:
While I do not know the woman and can cite little wrong with her resume, based on her previous tenure as the customer experience officer for United Airlines, if the Allstate customer experience begins to mirror the one at United, I am sure State Farm, Liberty Mutual and Farmers will be willing to contribute to paying her salary TO STAY AT ALLSTATE. United's customer experience end to end is the before picture and not the after. Buckle up Allstate policy holders
6/20/2011 4:55 PM CDT on Chicago Business


William S. wrote:
Too little, too late. I just dropped Allstate as my home insure. I made a claim for the first time after being insured by them for 16 years. I noticed a $300.00 increase when the policy was up for renewal. Needless to say, I left the good hands people. As long as i was paying the premium, all was ok. File a claim, an immediate increase. Dam shame!
6/20/2011 3:33 PM CDT on Chicago Business

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http://www.chicagobusiness.com/article/ ... -insurance


Allstate misses the turn as rivals reinvent auto insurance
By: Steve Daniels June 27, 2011

*Or, Allstate CEO Tom Wilson Flexes His 'Art Of Performance Management' Muscles

By sending employees threatening letters? Reducing their pay?
Is that how a multi-million dollar CEO motivates their staff?
How original.

A true leader will not whip their subordinates into submission and create an environment of hostility and resentment -
A true leader will inspire followers to want to do more and to do it better.
RatPak11



His dream of a broader financial services empire in ruins, Thomas Wilson is running out of time to revive Allstate's once-dominant insurance business.

Since Mr. Wilson became CEO of the country's second-largest auto and home insurer nearly five years ago, Allstate has stuck to its old ways while rivals using new direct-sales techniques grabbed most of the growth in the $164-billion U.S. auto insurance market. Customers are defecting, premium revenue is falling and Northbrook-based Allstate's stock price is down by half since Mr. Wilson took the helm.

Shareholders seem fed up. Nearly 1 in 3 voted against his re-election as board chairman at last month's annual meeting, the highest percentage of "no" votes for any CEO of a Standard & Poor's 500 company this year.

"I think (he has) probably a year, maybe two at the most," says Meyer Shields, an analyst at Stifel Nicolaus & Co. in Baltimore.

More than Mr. Wilson's job is at stake. Allstate's long slump casts doubt on the future of an 80-year-old company with deep roots in Chicago and 8,400 local employees. Allstate faces the same fate that befell other stalwarts of corporate Chicago — Motorola Inc. and Tribune Co., to name two — that foundered after missing fundamental shifts in their industries.

If Mr. Wilson, 53, can't turn around the auto insurance unit, Allstate faces a long, painful shrinking process that could add many more layoffs to the roughly 1,000 local jobs it has cut since the financial crisis. With its stock trading well below book value, the company also could be vulnerable to a takeover.

"It is going to have to grow," Mr. Shields says. "It's taking forever to turn around."

A BEHEMOTH IS BORN
The eighth-largest Chicago-area company, Allstate was born during the Great Depression as the in-store insurance arm of Sears Roebuck & Co. It became independent in 1995, when Sears spun it off in a $9-billion deal.

Allstate moved beyond the Sears store insurance counters, building a network of exclusive agents around the country to sell auto and homeowners coverage to middle-class Americans in the postwar era. It remains a behemoth. About $1 of every $10 spent by U.S. households on car insurance goes to Allstate; it serves nearly 16 million households.


During the 2000s, Allstate moved to reduce its reliance on insurance by expanding into banking and retirement products. It expanded in life insurance, too, selling annuities through banks and other outside firms, as well as though its agents.

Mr. Wilson, as chief operating officer under predecessor Edward Liddy and later as CEO, was the architect of the strategy. But his vision of Allstate as a financial superstore for the middle-class clientele of its agents never bore fruit, and it left the company more vulnerable than most property-casualty insurers to the financial meltdown of the late 2000s. Allstate posted a loss of $1.7 billion in 2008, largely due to investment losses. The next year, it cut its dividend in half.

Meanwhile, natural disasters pummeled the homeowners insurance business. Hurricane Katrina caused $3.7 billion in losses for Allstate in 2005, leading the company to curtail homeowners policies in coastal areas. That hurt its auto business in those regions because Allstate's customers tend to buy auto and homeowners policies from the same insurer.

While Allstate was trying unsuccessfully to diversify, rivals were revolutionizing the auto insurance business, which Allstate still counts on for most of its sales. Auto premiums generated 55% of its $31.4 billion in revenue last year.


Geico and Progressive Corp. found a new formula for growth in the relatively mature business. They crafted a lower-cost model combining direct sales over the Internet and telephone with heavy television advertising. Offering lower prices and more convenience, they grew rapidly at the expense of Allstate and other insurers that sell mostly through agents.

Allstate's second-place share of the auto insurance market fell to 10.4% from 11.3% over the past five years, while Chevy Chase, Md.-based Geico jumped two points to 8.7% and Progressive climbed to 7.9%

Meanwhile, Bloomington-based State Farm Insurance Cos., the largest car and home insurer in the U.S. and a mutual company owned by its policyholders, is consistently rated better for claims handling and service than Allstate. Unlike publicly traded Allstate, it can offer lower prices without worrying about Wall Street's reaction to the resulting shrinkage of profit margins. State Farm's auto insurance business is still growing despite an online presence even smaller than Allstate's.

Allstate finds itself in a no man's land — it's not the cheapest auto insurer, and it's not known for providing the best service.

CATCHING ON
Mr. Wilson, who declined an interview request for this story, isn't the first Allstate CEO who failed to grasp the power of direct selling to reshape the industry. But he appears to get it now.

He dramatically changed course with a $1-billion deal last month to acquire San Francisco-based online auto insurer Esurance Insurance Services Inc. Formed in 1999, Esurance outsells Allstate's 10-year-old Internet platform.

Under Allstate, Esurance will keep its brand name and sell policies at lower prices than Allstate agents offer. That's another break with the past.

When Allstate launched an online sales operation in 2000 under Mr. Liddy, it didn't undercut its agents on price, fearing a backlash from the 15,000-plus salesforce.

"To me, that was the fatal flaw from the get-go," says Jeffrey Lewis, an Allstate vice-president from 1999 to 2004, who helped launch the effort. Mr. Lewis, now retired, says the customer "expectation was, 'If I did all the work myself, I was going to get a better price.' "

Geico and Mayfield Village, Ohio-based Progressive were happy to meet that expectation. During the ensuing 11 years, Allstate's annual online sales reached $700 million, while Geico's surged by $10 billion.

Mr. Wilson says things will be different with Esurance. But his new online unit will need a big dose of ad spending, which already is soaring as auto insurers vie more feverishly each year for consumers' attention.

Esurance spent $100 million on ads last year, badly trailing Geico, the industry's big spender at about $800 million. Allstate's ad budget is around $500 million, concentrated on the familiar "good hands" ads featuring actor Dennis Haysbert and Dean Winters' cheekier "Mayhem" character personifying all that can go wrong in the world. The company plans to advertise Esurance separately, with some sort of tagline identifying it as an Allstate unit.

"We'll expand (advertising) appropriately, but it will be at a reasonable return," Mr. Wilson told investors this month.

More ad spending puts more pressure on profits, a fact not lost on investors wondering how "Mayhem" can garner so much buzz (500,000 Facebook fans and nearly 10 million YouTube views) without boosting Allstate's sales.

Wall Street generally approves of the Esurance acquisition, but Allstate stock got no boost from the deal. Some question Allstate's ability to execute, given past missteps.

A $1.2-billion deal in 1999 for Chicago-based CNA Financial Corp.'s auto and homeowners insurance unit was supposed to expand Allstate's sales through independent agents. But Allstate backed away from the strategy after too many high-risk customers signed up. Its sales through independent agents shrank to $1.1 billion last year from $3 billion just after the CNA acquisition.

"Given their track record, what happens (to Esurance)?" says Greg Peters, an analyst at Raymond James & Associates in Chicago. "It may grow in the short term, but if history repeats itself this will be a shrinking book of business over the long term."

And while Allstate aims to compete more effectively with Geico and Progressive on their turf, they're targeting Allstate's stronghold among older consumers who like to buy auto and homeowners insurance from the same company. Until recently neither sold homeowners insurance. But both have linked up with home insurers to offer a bundled product.

"It's a huge chunk of business we're after," John Sauerland, Progressive's president of personal lines, told investors this month.

'THREAT LETTERS'
In the meantime, Allstate is creating its own sort of mayhem within its captive agent force, which accounted for more than 90% of its $26 billion in property-casualty insurance premiums last year. The company is culling low performers and pushing for consolidation among its 11,500 agencies, hoping bigger operations will provide better service. Executives have said the number of agencies could fall by as much as 25%.

Agents say management is sending out more "threat letters," warning agents that they'll be terminated if they don't start hitting sales targets.

Allstate also is reducing base commissions for many agents and making more of their pay contingent on reaching sales goals set by the company.

"The morale today is probably at its lowest that I've ever seen," says Jim Fish, executive director of the Gulfport, Miss.-based National Assn. of Professional Allstate Agents, a frequent critic of the company over many years.

Some agents are leaving Allstate to form independent agencies and selling their old customers cheaper policies from other insurers. It's not particularly hard to do.

Agents who leave the company get a one-time severance payment equal to 1½ times a year's commissions. So, an agent with a $1-million client list can receive up to $150,000. There are no restrictions on setting up a competing agency other than locating it at least a mile from the former Allstate franchise and refraining from soliciting former customers for a year.

Greg Haynes started his own agency in Victoria, Texas, in late 2009 after taking a $300,000 buyout from Allstate following nearly 20 years as an agent. He estimates about 20% of his former Allstate customers now are with him and are insured by other companies.

Defecting agents say the power of Allstate's brand — an advantage the company touts in missives to agents — is no match for competitors' lower prices.

"We sell from Hartford, Travelers, Safeco," says Mr. Haynes' partner John Burgman, another former Allstate agent. "When the difference (in price) is 25% on an annual premium, branding takes a back seat. It really does."

Joseph Lacher, Allstate's property and casualty president, told analysts this month that the agency overhaul will take about two years but will create agencies that do a better job of retaining clients and selling other insurance products to auto policyholders. In the short term, though, he acknowledges the company could lose some customers.

"We're convinced that . . . over the couple-of-years transition, (agency performance) will improve," he said. "But inside of a year, we could see a little noise around it."

In a statement, the company adds, "Our growth strategy is to serve customers well and attract new business with effective marketing campaigns such as 'Mayhem.' This is a great time to build an Allstate agency, and we have had no problems retaining high performers or attracting talented entrepreneurs to our company."

Analyst Mr. Shields says Allstate hasn't explained adequately why bigger agents are better. And he believes the risks of the agency-rationalization campaign are higher than the company admits.

"I honestly don't (understand)," he says. "I wish I did."

YET TO RECOVER
Allstate is still struggling to rebuild its finances following the crushing hit to shareholders' equity suffered during the financial crisis. Its operating returns on equity hover below 10%, far less than its 14% average over the past decade. Since its $1.7-billion loss in 2008, Allstate has posted modest earnings of $854 million, or $1.58 per share, in 2009 and $928 million, or $1.71 per share, in 2010. Revenue fell slightly last year to $31.4 billion from $32 billion in 2009.

At a recent "investor day" presentation, its first in over a decade, Allstate's top brass laid out a three-year plan for rebuilding its returns to 14%.The plan depends largely on big rate hikes on homeowners policies.

Homeowners insurance continues to bedevil Allstate. Six years after Katrina, a spate of tornadoes and other storms have caused big losses. Allstate suffered $2 billion in losses during April and May alone, nearly equal to all of its catastrophe losses in 2010.

Worries about Allstate's future are reflected in the price of its stock. At $29.43 last Friday, Allstate stock traded at 81% of its book value per share. Progressive shares, by contrast, fetch more than twice book value.

The dividend cut has yet to be restored, and Allstate has just begun repurchasing stock at modest levels — something it was doing aggressively before the crisis. Analysts who saw the company's ultra-low stock price as a buying opportunity are having second thoughts.

Citigroup's Keith Walsh cut his rating to "hold" from "buy" after the investor conference, laying out his doubts in a note that emphasized he's "not buying into management's plans."



What do you think?





joe j. wrote:
Ok. Let me spell this out for anyone who wants to know that is not an Allstate Agent. The Allstate Company is ruining lives, attacking the folks that built this Company. Most employees of Allstate does not truly respect the Agent - the very person that busts their butt so that they have a paycheck. It truly has become a culture of biting the hand that feeds you over there. The management team at the top and in the Midwest is the worst that I have seen in my 20+ years as an Agency Owner winning every award that they have offered over the years. I'm one of the guys that is supposedly going to benefit from this new commission change (which amounts to nothing more than Allstate again stealing hard earned revenues from the so called independent Agency Owners that built this Company). I don't want the commission change. It is going to destroy our ranks. I have always been a roll with the punches type of happy go lucky guy throughout my life. I can honestly say that the sentiments I often feel today towards the decision makers are beyond anger. This has been a 4 year long car accident that we Agents are involved in. The management feeds us such nonsense at these corporate meetings (Alice and Bill in midwest is classic BSer that no one respects or believes) that even the younger guys are shaking there heads at the bad "sales tactics" used by management to pitch these ideas to us. We are the face of the Company. We built this Company. The tenured Agents should be respected, allowed to be profitable and sit if they so chose, and the management team should be able to hire and bring on new Agents for this new direction they are going. Why are they threatening current Agents then? It's a horrible idea, and no one is buying into it from analysts, to shareholders, and certainly not any would be Agents in the industry. The fact that they have to come after my fellow Agents shows that this management team is largely incompetent, and moreso, incapable of effectively growing any type of business. Take the new guy that they bring in from GM. Not even here 2 years, at the Leaders Forum that I attended, his speech was just cringe-worthy. He comes in without any appreciation for what the non - superstar Agent has done to build this Company. The guy compares them to a backup quarterback (painful to witness) that needs to be paid like a backup quarterback. The lack of true knowledge of our business model and core is literally mind-blowing. A lot of these guys having their Agency stolen from them are former year after year superstars that are now sitting on the business that they built - that they always were promised that they could do, but hey, what's a 50 year running promise broken and Agent lives and families destroyed to try and stop a crashing management team's results. I could go on and on. Many great Agents, like the ones in this article, have already left. More will go. Results will continue to be poor. I know. I am one of the "starting quarterback" Agents that this Company thinks it is giving more to. I don't want more money at the expense of my fellow Agents. Most of us top performers with a soul feel the same way. What can you do? This Company is being destroyed by guys that couldn't last 5 years as an Agent. If the Company had any brains, they would tap the 30 and 40 year retired Agents that lived in it for advice. These guys have offered it up, unsolicited, because they care about the Company, but they're ignored. Please management team go away is the daily hope amongst Agents. Get out of the way, stop messing with commissions, stop threatening the guys that earn the revenues to pay your salaries, show reverence for tenured Agents, and take responsibility for something! ...for once.
7/1/2011 9:46 AM CDT on Chicago Business
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James K. wrote:
Tom Wilson and his leadership is doing exactly the same thing Joe Nachio did to Qwest. It is very sad to be experiencing this first hand. Now I now how the Qwest (formerly US West) employees felt.
6/30/2011 4:39 PM CDT on Chicago Business
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Robert W. wrote:
The senior leaders at Allstate instead of running the business are making decisions that are trying to protect their careers. How many more quarters will the Board of Directors accept loss of auto market share and the constant blame on mother nature for the problems of Allstate? Allstate has an agency force that does not trust them. Allstate is getting ready to reduce their agents commission from 10% to 8% with a chance to grow it back to 10 or 11 plus a bonus for a total opportunity that can vary in the future from 8 to 14%. Today the opportunity is from 10 to 14%. Allstate needs to partner with their employees and agents to get the company back on track and going in the right direction. The atmosphere of fear and mistrust has led to where Allstate is today and if it stays Allstate will end up as a case study on how to ruin a great American business.
6/30/2011 12:15 PM CDT on Chicago Business
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Joseph T. wrote:
What a private sector screwup!!
6/29/2011 9:52 PM CDT on Chicago Business
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John C. wrote:
As a former 28+ year employee of Allstate that was unceremoniously let go with 12 other long term employees in our Department, Allstate is definitely proving that they are age bias. They have systematically been letting people go throughout the Company. They claim they are eliminating jobs but then hire two younger employees, for less wages, to do the same job. They stay short term and leave for greener pastures. This isn't helping the "bottom line". It's only adding to the total expense and at the risk of immature workers who are only in it for a paycheck. They have a Procurement effort to reduce costs and they're costing monies instead. Loyalty to the Company and to the Customer is "Out the Window". Wilson has to go, as well as his management cronies that are just "Yes Men (and Women)" and Vice Presidents that are short sighted.
6/29/2011 3:12 PM CDT on Chicago Business
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L S. wrote:
Wow! It is great for someone to finally write the truth about what has been going on. Being an Allstate agent for over 15 years and the child of a lifelong Allstate agent it has been extremely difficult to watch decisions be made year in and year out that have depleted the value of our Agency, while watching the company continue to make decisions that benefit Managers, but hurt profitability and customer loyalty. Then management blames the agency force for their own shortcomings, firing highly profitable agencies because they don't sell enough Financial products. While rewarding agents that write lots of unprofitable business just to have higher sales numbers.

Short story, way to much management taking way to much of the profit off the top. Why is Tom Wilson making 12 mil a year and the stock is half the value it was 5 years ago.
6/28/2011 11:54 PM CDT on Chicago Business
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Bargen B. wrote:
1) Dennis commercials put you to sleep
2) Mayhem commercials got old after the first week and they insinuate that some insurance companies, for example dont cover rocks thrown by lawn mowers -- when they all do. The commercials are plain stupid like that GPS dude. I turn the channel whenever one comes on just like i do with that stupid Jimmy Johns is fast with that obnoxious fast talking person - It makes my blood pressure rise and stresses me out. They need to study emotional advertising.
3) Employees spend tons of time hand holding and training over seas folks and I swear these people have no creativity what so ever. Then after 6 months when there up to speed they transition the job to someone else and we have to train again. And when do we, employees get time to do anything!
4) Execs spend too much money flying to these overseas locations and employees spend tons of money tracking what there working on and in some cases, just have outsourced people on teams to make it look good.
5) Allstate needs to stop wining about high prices. People who buy Allstate want the agents and the cadiac insurance. So you pay more for that than you would for a cheap bottle of wine. If you want other, then shop are online stores at esurance and answerfinancial.
6) Dont get rid of any more people except the execs. Dont cut anyones pay except the execs.
7) Hire people so our kids can have jobs and not be laying around home all depressed.
6/28/2011 2:20 PM CDT on Chicago Business
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Scott B. wrote:
The only thing that Allstate has done well in the past few years are the "Mayhem" commercials. They made a great point in saying how Progressive and Geico offer better rates. They just don't cover collision and have reduced liability coverage. I am sticking with State Farm and have always been happy with how they handle claims. Younger drivers will find out soon how good their cut rate insurance is when they have an accident.
6/28/2011 11:19 AM CDT on Chicago Business
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joe t. wrote:
WOW! to see this info in print is great! I lived the life of a Allstate Agent for 35+. It was great the 1st 20 years. Then came Liddy and Wilson after ruining Sears, They started destroy a great agency force. They ruined many lives and family's. They ruled as slave masters, makeing promises , then change the rules again and again. Totally misleading new hires who invested a lot of money, only to get fired and leave in a short period of time. What's wrong with the the Board of Directors? They are not doing their Fiduciary Duty, in allow Tom Wilson to ruin a once great Company
6/28/2011 10:21 AM CDT on Chicago Business
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Herb C. wrote:
Appropriate that this article should appear in Crain's now, when Bill Clinton is in town to discuss job creation in America. How about discussing job retention in America? Allstate has entire departments devoted to finding outsourcing "opportunities". Hundreds if not thousands of Allstate jobs have been sent overseas in the past several years, and the fat cats collect their bonuses because of all the money they have "saved" for the company. Disgusting. A lot of focus has been on American job losses in the manufacturing sector, but Greater America may not be aware of how many white-collar jobs are being siphoned off as well. Allstate under Tom Wilson is leading the parade, and the band is playing Bollywood movie theme songs....
6/28/2011 9:23 AM CDT on Chicago Business

Steven N. wrote:
Steve B,

This will be a great Harvard Review case study in a couple of years as how one individual can conpletely alienate employees, destroy a companies moral and, take a compnay from riches and great potential to rags and financial ruin. He didn't listen to his agents or employees and look where it has gotten him.

Shareholders one more year of voting against him and he will be gone. I just it is not to late for some one to step in save this once great American company!
6/28/2011 8:47 AM CDT on Chicago Business
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gerard v. wrote:
1) As You age, you will figure out the value of an agent.
buy on line at 21 worry more about your decision at 31.

2)Bad investment are managements bad decisions.

3)Treat your employees with respect, its funny how it will be reciprocated.
6/27/2011 7:41 PM CDT on Chicago Business
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Bruce W. wrote:
I had no idea that Allstate was in such "Mayhem" as someone who recently switched over to them I guess I read this about 1 Month to late. When I first was quoted by them for both my Home and Auto the Prices seemed Fair and were less than my previous Policy with Farmers. but when I received my first confirmation The Auto Policy had jumped by $30.00 for 6 months with the only excuse "the person quoting it on the phone must have made a mistake" Then all kinds of requests started coming in for proof of past Insurance even though I have absolutely zero claims in the last 16 years. If you want to stop losing customers then stop harassing new ones it is not a very good Business Model. I think all Insurance Co's play the game of raising the rates on existing customers. I had State Farm for years with no complaints but they kept raising their rates every year once again with no claims. Finally I said enough and Farmers issued me a Home Policy for $831.00 a year in 2007 which was far less than State Farm. However by 2011 the Farmers Policy had jumped to over $1400.00 with no claims my Agent could not explain and I told him are we not in the age of declining Home Values why do you keep raising my Home value every year?
6/27/2011 5:51 PM CDT on Chicago Business
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Eric F. wrote:
What an indictment of a company run amok!

If those board members who received such low approval votes want to get better results next time they should start doing their jobs. Task #1? Replace the chief with somebody with a vision for the future and the leadership skills to git r done.

Pathetic.
6/27/2011 12:51 PM CDT on Chicago Business
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Ken H. wrote:
What do you think will happen when you are charging twice as much as State Farm? I was with Allstate since the day I started driving in 1995. Then in 2005 or so I noticed that my car insurance rate kept getting a lot higher every six months. Even as I got older and have had no tickets or accidents and now had multiple policies. Then around 2008 I called State Farm and they were half the price of Allstate and when I called Allstate back to match State Farms price they said no way. I canceled on the spot and have been happy with State Farm ever since.
6/27/2011 10:59 AM CDT on Chicago Business
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Marty S. wrote:
In addition to all of the items cataloged in this article, I would point out that Allstate -- advertising to the contrary -- has also decided to become a "bad" neighbor and screw over a school district in Northbrook, its home. Turns out that Allstate had been improperly -- not intentionally but improperly -- assessed and its outsized tax burden was used to fund a school district. Court decided that the tax was wrong and it adjusted it going forward. Allstate asked for a refund from the school district and the school district paid them over 3 million for the most recent 3 years. Now Allstate, not happy with that pound of flesh, has request another three years and seems prepared to ask for refunds for all 10 years. School district is broke, teachers being fired, property values dropping because of schools. Now a section of Northbrook in which it is impossible to sell a house. Thanks but it this is what it means to be in good hands, count me out. Take some money and walk, take the money in affordable increments over time but good hands do not throw an entire school district under the bus for something it had no part in. Good luck to the senior management team
6/27/2011 9:26 AM CDT on Chicago Business
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Ryan W. wrote:
Unlike some people, I appreciate a good round up to help me understand the landscape of local business. Mostly though I appreciated the 'photo'. John Ueland must be quite the photographer to capture that unlikely road rally. I think Flo looks particularly vainglorious in her victory.
6/27/2011 9:15 AM CDT on Chicago Business
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Tom C. wrote:
I never really understood the value of an agent outside of some advice during the initial sign up. Auto insurance should be a price driven industry with high turn over ratio. Everyone should be educated to get an insurance quote every other year and jump when it's cheaper.

As for the "home town discount" Allstate is advertising.... I literally cut my auto insurance bill in half leaving them this spring.
6/26/2011 10:56 AM CDT on Chicago Business
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Gene D. wrote:
Good grief,its past time to Replace this Guy Tom Wilson,after 10's of Billions of dollars in losses in claims, toxic investments and the mistreatment of millions of Allstate customers due to high rates. To many customer of whom the company was built on,have thrown in the towel. Tom lost his way or better yet never had it. He's like a deer in the headlights,he does not know which way to go and I do not know why the Board of Directors did not end his tenure years ago. The money that Allstate is loosing daily to customer defection,agents/employees business and families being destoryed coupled with mounting lawsuits for agents misclassification and wrongful termination. How long can this go on? Thanks for letting everyone know what a disater Allstate is.
6/26/2011 10:25 AM CDT on Chicago Business
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Mike S. wrote:
Thank you Mr. Daniels. It's about time someone put all this bad news together in one article to paint the picture for shareholders, employees and agents.
Allstate is firing 20+ year agents who have superb customer satisfaction results, extremely low cancel rates, very profitable, stable books of business and participate heavily in their communities. Their sin is that they are not selling enough of the over priced polices. And since they are independent contracts Allstate is not really saving much beyond commission. All because they think 7000 big agencies can service better and sell more than 11,500 of varying size. So they are going to close 25% of the locations in the channel that brings them 90% of their revenue. And this is suppose to turn everything around and bring them back to growth.
Please - someone stop this before they roll it out any further. I know direct is the way of the future, and frankly the way of "now'. But until Allstate can get it's online act together (their cancels and claims from their current online sales are astronomical) they better make life easier for their agents. At this point, with their uncompetitive rates and poor relationships with their Agents, pretty soon they won't have to ask many of them to leave. An increasing number is already getting out on their own as you can see.
And there-in is the danger. Even changing from one agent to another generally causes 25% of the book to cancel in the first 12 months. And that's with a well run transition. For the clients who have lost their Agent this year because Allstate let them go, they get a letter telling them to call an 800 number if they need help. Not quite the personal service they signed up for. My guess is 30-40% of these orphaned policy holders will hit the road if they lose their Agent. Are these the only execs that have not heard it cost more to get new clients than keep the ones you have?
And one the Execs earlier this year said the plan was to surpass State Farm in 10 years. At this rate Allstate will be a division of Geico in 5 years.
I guess we should not be surprised. This from the brain trust that ran Sears into the ground after a century of success.
Time for a drastic change in leadership, strategy and pricing. And someone should take them private. Then they can compete with State Farms of this land.
Sorry for the ramble. It's just a shame.
6/25/2011 9:36 PM CDT on Chicago Business

Wayne M. wrote:
Not really, mostly a compilation of things
6/25/2011 7:35 PM CDT on Chicago Business
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Ma K. wrote:
Is there actually anything new in this column? Or is it mostly just put together from prior reports?
6/25/2011 4:00 PM CDT on Chicago Business

[RatPak11]

*How's "The Art Of Performance Management" Working For You, Tom?


After the publishing of "CEO Tom Wilson Discusses The Art Of Performance Management",
the following article seems contradictory to Mr. Wilson's alleged management skills.
This article smacks of a vote of "no confidence" to his abilities as a leader of a large corporation.
My personal opinion is a vote of no confidence to the entire management team of the past 20 years-ever since the company went public and started screwing employees by changing the retirement system. The writing was already on the wall, even way back then.

Then the company hired 'Mckinsey & Co.' to lead the way in screwing Allstate customers and claimants. Then McKinsey showed Allstate how to screw employees again, by doing more with less and called it 'time management' and 'goal setting'. Doing with less was accomplished by reducing staff and have the remaining employees pick up the work load. Then Allstate would reduce the staff again and...well, you get it. Goal setting was accomplished by the managers setting measurable goals for their subordinates (i.e. 'micro-manageing'). If the employee was getting close to accomplishing a target, then during the employee's next performance review, the manager would extend the goal. It was rigged so that the goals were absolutely unattainable. This translated to a very minimal raise or more likely, no raise at all.

This company went from being a respected corporation to a literal sweat shop. The direct management would try to keep up the office employee moral but this was impossible with what employees were being required to do.

Competent managers were replaced with drones. These drones would do anything for a promotion and were expected to be a 'yes-person'. This is exactly what Allstate wanted. The drones were made up of ambitious but incompetent personel who were not capable of doing their own work prior to their undeserved 'advancement'. However, they were more than willing to do as ordered: miro-manage and bully their more than capable co-workers, who were now their subordinates. As you can imagine, this only worsened the already damaged moral.

The well trained, competent employees were forced to bend and do what Allstate wanted-whether it be unethical, illegal, or immoral. This would wear and tear at the individual's value system which would also be a major stresser. A lot of employees quit or retired. Some fought on and were forced out one way or another. Who was left? With only a very few exceptions, it is the untrained and the drones who now service the Allstate customers and, this is exactly what Allstate wants.

Oh, and Allstate's answer to losing policyholders to more competive insurers? Rather than providing a better policy with better service so the agents could sell to new customers and maybe even recoup some of their old ones, they chose to raise the rates on the backs of their remaining loyal policyholders!
RatPak11


http://co117w.col117.mail.live.com/defa ... inbox&cv=1

Allstate CEO May Post First Loss in Two Years as Shares Tumble
July 29, 2011, 12:06 AM EDT
By Noah Buhayar

July 29 (Bloomberg) -- Allstate Corp. Chief Executive Officer Thomas Wilson, who’s presided over a 57 percent decline in the stock price, may say next week that the insurer had its first loss in two years.

Allstate, the second-largest home and auto insurer in the U.S., may post an $831 million second-quarter loss on Aug. 1 as costs from natural disasters increased, according to 12 analysts surveyed by Bloomberg. Allstate, based in Northbrook, Illinois, last had a loss in the period ended March 31, 2009, amid investment declines.

Wilson, 53, rose to the top job on Jan. 1, 2007. Since then, Allstate has lost auto-insurance customers and about $26 billion in market value. Wilson said on July 18 that Joseph Lacher, who oversaw the insurer’s main unit, was leaving after less than two years on the job. Investors may now put pressure on the CEO, said Brian Meredith, an analyst at UBS AG.

“Anytime that a company like Allstate has struggled the way it has struggled for the last several years, people are obviously going to question management,” he said. “If you bought the stock back in 2007, you aren’t very happy.”

Allstate’s share decline compares with the 32 percent drop of the 24-company KBW Insurance Index and the 8.3 percent decline in the Standard & Poor’s 500 Index.

Maryellen Thielen, a spokeswoman for Allstate, declined to comment, saying the company is in “a pre-earnings quiet period.” Attempts to reach Lacher weren’t successful.

Allstate, which got about half of its revenue last year from auto coverage, is competing with Warren Buffett’s Geico Corp. and Progressive Corp., companies that built sales through direct channels such as the Internet. Allstate typically relied more on agents.

Policy Count
The insurer’s overall standard auto-policy count fell 3.5 percent to 17.5 million from year-end 2006 through March 31. Progressive’s personal auto policy count surged 21 percent to 8.3 million in the same period.

Allstate announced a deal in May to purchase Esurance, the online seller of auto coverage, from White Mountains Insurance Group Ltd. Wilson said in an interview at the time that he was trying to “box in” Geico and Progressive with the acquisition.

Lacher, who left Allstate without explanation, called the company’s returns from its homeowners business “inadequate” at the company’s investor day in June. The insurer has reported underwriting losses in the homeowners unit for the past three years, according to data on its website.

Wilson has said he is increasing rates for the coverage to keep pace with rising claims. Catastrophes, including the tornadoes in April that flattened parts of Tuscaloosa, Alabama, cost Allstate $2.3 billion in the quarter before tax.

Wilson’s Performance
Declining market share and rate increases have led some agents to question Wilson’s performance since 2007, said Jim Fish, executive director of the National Association of Professional Allstate Agents. The group is voting on whether to form a guild affiliated with the AFL-CIO.

“We’ve lost over a million households in that period of time,” said Fish, a retired Allstate agent, in an interview. “It just does not seem to be turning around.”

Holders of about 126.7 million shares voted against re- electing Wilson to the board at the annual meeting in May, while investors with about 273.8 million shares supported him. Proxy- advisory service Institutional Shareholder Services Inc. advised clients in April to vote against the management’s proposed compensation for Wilson and other executives.

Allstate’s “return to shareholders continues to lag peers,” ISS said in the report. “There are concerns with the company’s long-term incentive design.”

Support for CEO
Wilson had stints as Allstate’s chief operating officer, president of the property-casualty unit and president of its life insurance unit prior to becoming CEO. He is supported internally and by the board, said Cliff Gallant, an analyst at KBW Inc. who rates the company “market perform.”

“We’ve gone through a couple bad years with the weather,” said Gallant. “He’s had a tough period, yet the company has emerged from it financially sound.”

Wilson reshaped the company’s investment portfolio since 2008, when writedowns contributed to an annual loss of $1.68 billion. He bought corporate bonds while cutting back on commercial mortgage-backed securities and municipal debt.

Wilson has reduced risk in the investment portfolio, said UBS’s Meredith. What Allstate needs to do now is improve the return on capital, get rid of volatility in earnings and stanch losses in market share, he said.

“Those are three things that clearly are necessary for the stock to start working,” Meredith said.

--Editors: Dan Reichl, Dan Kraut

To contact the reporter on this story: Noah Buhayar in New York at nbuhayar@bloomberg.net.

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net

[RatPak11]

http://www.insurancejournal.com/news/na ... 207069.htm

President of Allstate Protection Unit Leaves
July 19, 2011

The Allstate Corp. said on July 18 that the president of its struggling Allstate Protection subsidiary was leaving the company immediately. After the announcement, Allsate’s shares fell more than 5 percent in midday trading.

The company gave no explanation for the departure of Joseph Lacher, who led the unit selling auto and homeowner’s insurance since November 2009.

Citigroup analyst Keith F. Walsh called Lacher’s departure a negative that would depress Allstate stock and delay the Protection unit’s turnaround.

Allstate Corp. shares dropped $1.64, or 5.6 percent, to $27.83 by midday after Lacher’s departure. Analysts said shareholders have not been happy with the company’s performance.

Walsh said Lacher was brought in to fix the underperforming unit. Allstate’s auto-market share fell between 2007 and 2010 while Progressive Corp. and Geico gained customers, and the homeowner’s business also lagged rivals, he said.

Allstate said that until it hires a replacement for Lacher, the presidents of businesses in the Allstate Protection unit and the heads of claims and product operations would report directly to CEO Thomas J. Wilson.

Comments:
RJ Wesseler says:

Allstate needs to stop looking for the silver bullet that will bring it customers, retention and profitability. Since Wilson took over, he has abandoned the core principles which made Allstate strong. His first abandonment was the Allstate employees who built the company. As an outsider, he decided to bring in other outsiders instead of depending on a strong internal force. Sad see a once ultra strong company deteriorating. Great job Mr. Wilson

Reply
July 19, 2011 at 2:28 pm Paul kelley says:

Until they get rid of Wilson they will continue to slide. It’s only going to get worse

Reply
July 19, 2011 at 7:15 pm sssmith says:

The stakeholders can’t be suprised. Look at all the horrible way’s Allstate has been treating their homeowner and auto policyholders. They deny most of their claims and then turnaround and sue everyone in sight for paying out claims for refunds. They are a joke! I’m happy to see the company take a hit, I hope it continues. They have caused enough stress to everyone, I know I moved my policies to Geico and Farmers. Good news today reading this article.

[RatPak11]

http://www.businessweek.com/news/2011-0 ... parts.html

Bloomberg
Allstate Declines Most Since October After Lacher Departs
July 18, 2011, 5:31 PM EDT

By Andrew Frye and Brooke Sutherland


(Updates with earnings estimates in seventh paragraph.)

July 18 (Bloomberg) -- Allstate Corp., the second-largest U.S. home and auto insurer, fell the most since October in New York trading after the departure of Joseph Lacher, president of the company’s main businesses.

Allstate dropped $1.46, or 5 percent, to $28.01 at 4:01 p.m. in New York Stock Exchange composite trading. Lacher, who oversaw residential and car coverage businesses, is leaving the company, effective immediately, the Northbrook, Illinois-based insurer said in a statement today.

“This comes as a complete shock, and it’s a very significant disappointment,” Meyer Shields, an analyst with Stifel Nicolaus & Co., said in an interview. “They’re losing somebody who has been held in reasonably high regard by investors,” said Shields, who cut his rating on Allstate to “hold” from “buy.”

Allstate, led by Chief Executive Officer Thomas Wilson, said last month that returns at the homeowners business were “inadequate” as it seeks to compete with No. 1 State Farm Mutual Automobile Insurance Co. At the car-insurance operation, Allstate is seeking to defend market share from Progressive Corp. and Berkshire Hathaway Inc.’s Geico unit, which have been adding customers through Internet sales. Presidents at Lacher’s former operation will report to Wilson.

“Investors will interpret this as a problem at Allstate,” said Paul Newsome, an analyst with Sandler O’Neill & Partners LP. “Joe was one of the more visible, well liked people at Allstate by investors. So him leaving, for whatever reason, I believe will be viewed negatively.”

Performance This Year
Allstate has declined 12 percent this year, compared with the 8.7 percent drop of the 24-company KBW Insurance index. The company doesn’t comment on personnel matters, said Maryellen Thielen, a spokeswoman for Allstate.

The insurer is scheduled to report second-quarter results on Aug. 1 and may post a loss of about $831 million, the worst three-month period in more than two years, according to 12 analysts surveyed by Bloomberg. Catastrophes including the April tornadoes that leveled parts of Tuscaloosa, Alabama, cost Allstate about $2.3 billion in the three months ended June 30, according to company statements.

Allstate’s overall standard auto policy count has dropped for most of the last three years. Progressive said this month that total personal auto insurance policies rose to 8.38 million on June 30 from 7.97 million a year earlier.

Wilson hired Don Civgin, formerly of OfficeMax Inc., as chief financial officer in 2008 as the company booked investment losses at its life unit. The same year, Judith Greffin was promoted to chief investment officer. Former American International Group Inc. Vice Chairman Matthew Winter was named head of the Allstate’s life insurance unit in 2009.

“Wilson is under a lot of pressure,” said Mark Dwelle, an RBC Capital Markets analyst. “Investors haven’t been pleased.”

Lacher joined Allstate in 2009 from Travelers Cos., where he oversaw units that accounted for about 45 percent of the company’s premiums.

--With assistance from Noah Buhayar in Los Angeles. Editors: Dan Reichl, Dan Kraut

To contact the reporters on this story: Andrew Frye in New York at afrye@bloomberg.net; Brooke Sutherland in New York at bsutherland5@bloomberg.net.

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net

comments
Chuck McBride 1 comment
As a former agent, Lacher unfortunately endured the corporate culture of Allstate longer than he should have. BIG loss for Allstate. Good for Joe.......................

A Like Reply 2 days ago
Mfjsndvn
really

[RatPak11]

http://www.thestreet.com/story/11191850 ... en=GOOGLEN

Allstate Shares Suffer After Exec Departure
By Niamh Sweeney 07/20/11 - 11:05 AM EDT

NEW YORK (TheStreet) -- Allstate (ALL_) shares are trading just above $28 Wednesday after dropping nearly 5% yesterday on news about the unexpected departure of a key executive.

In a two-line statement issued late Monday the insurer revealed Joseph Lacher, president of Allstate's main business line called Allstate Protection, is leaving the company. Lacher's departure was effective immediately.

The move came as a surprise to investors and analysts alike.

Paul Newsome, an analyst with Sandler O'Neill, described Lacher's departure as "mysterious", adding that "the very terse press release suggests it was a last minute change, and there's probably something behind it that wasn't talked about in the press release."

Newsome did not change his 'hold' rating for the stock but said this was the latest sign of obvious turmoil in management's ranks.

Allstate CEO Thomas Wilson last month criticized the performance of Lacher's homeowners operation where Allstate competes with market leader State Farm Mutual Automobile Insurance. "Overall returns have been inadequate," the company said June 1 investor presentation, referring to the homeowners line.

At the auto insurance operation, Allstate is under pressure to defend market share from Progressive (PGR_) and Berkshire Hathaway's (BRK_B) Geico unit. Both companies have been adding customers through Internet sales.

Yesterday's fall in Allstate's stock price was the biggest since February. As recently as July 5 it was trading at $30.7, with a 2011 high of $34.13 reached April 26.

Sixteen analysts surveyed by Bloomberg have the stock as a hold, while ten others have it as buy. None have moved it to sell on the news.

"The stock was down a lot after the announcement was made so I think that clearly shows investors care, that they think this was a significant change in management - and that they think it was a negative," Newsom said. "This was the equity markets making a comment that they don't like the resignation of Joe Lacher."

[RatPak11]

http://www.propertycasualty360.com/2011 ... ed-to-rema

WSJ: Lacher’s Allstate Departure May Be Tied to Remarks About Chief Exec.
By Staff Writer
NU Online News Service, Aug. 1, 3:01 p.m. EDT

The abrupt departure of Joseph P. Lacher as president of Allstate Protection may have been due to comments he made about Allstate’s chief executive, according to the Wall Street Journal.

The WSJ, citing “two people familiar with the matter,” reports that Chairman, President and Chief Executive Officer Thomas J. Wilson “had been growing disenchanted” with Lacher’s performance.

But the story says the final straw occurred at a Ritz-Carlton hotel bar in Orlando, Fla. in May, when Lacher reportedly made disparaging remarks about Wilson over drinks with some of the company’s top insurance agents. The WSJ says “several people familiar with the situation” indicate that expletives were used at the bar after a meeting earlier in the day when Lacher and Wilson discussed a plan to reduce the company’s sales force and change the way commissions are calculated.



--------------------------------------------------------------------------------------------
http://online.wsj.com/article/SB1000142 ... lenews_wsj

Loose Lips Trip Up a Good Hands Executive
By ERIK HOLM And JOANN S. LUBLIN

A top Allstate Corp. executive recently saw what can go wrong when you talk about your boss.

The insurer announced July 18 that Joseph Lacher was no longer president of the Northbrook, Ill., company's home and auto-insurance units, which make up the lion's share of the company's operations. The 41-year-old Mr. Lacher's abrupt exit rattled some investors, sending Allstate's stock down.

Allstate said in a press release that Mr. Lacher was "leaving the company, effective immediately," but didn't say why. Executives who worked for Mr. Lacher were told to report directly to Thomas J. Wilson, Allstate's chairman, president and chief executive.

Mr. Wilson had been growing disenchanted with Mr. Lacher's efforts to turn around the home and auto-insurance operations, according to two people familiar with the matter. But Mr. Lacher's exit was sealed at a Ritz-Carlton hotel bar in Orlando, Fla., in May, according to several people familiar with the situation.

He was having drinks with some of Allstate's top-selling insurance agents as part of a company event called the Leaders Forum, these people said. At a meeting earlier in the day of about 2,000 agents and employees, Messrs. Lacher and Wilson unveiled plans to shrink Allstate's sales force and change the way the insurer calculates commissions.

Some agents were angry about the changes and the company's recent performance, said people who heard the remarks at the bar. Mr. Wilson, who wasn't at the bar, was a popular target.

Then came the two words that helped end Mr. Lacher's 20-month career at Allstate: "f—ing a—."

Some people who heard the double-barreled expletive or are familiar with an internal investigation about the incident launched by Allstate said Mr. Lacher was talking about Mr. Wilson, the chief executive at Allstate since 2007.

Another account has Mr. Lacher saying Mr. Wilson "would have to be a f—ing a—" if he didn't feel responsible for the company's performance.

Either way, some of the people who heard Mr. Lacher's remarks interpreted them as highly critical of Allstate's chief executive. Accounts of the incident rippled through the Leaders Forum the next day, according to several people. Eight weeks later, Mr. Lacher lost his job.

An Allstate spokeswoman declined to comment, citing a policy of not discussing personnel matters. The company declined to make Mr. Wilson available for comment.

Mr. Lacher said the insurer has "tremendous opportunity, and I wish them all the best."

Known for its slogan "You're In Good Hands With Allstate," the company is the largest publicly traded home and auto insurer in the U.S. It also sells life insurance and retirement products.

People familiar with the situation said the barroom comments were the last straw, since Mr. Wilson already was frustrated with Mr. Lacher's management style and failure to turn around Allstate's home and auto-insurance units since being hired in November 2009.

Mr. Lacher wasn't happy, either, and had expressed frustration at the pace at which he was allowed to make changes aimed at bolstering the home and auto-insurance units and replace managers he deemed as underperforming.

Jay Gelb, an analyst at Barclays Capital, told clients in a research note that Mr. Lacher was considered an "agent of change" who could have turned around the operations.

The two businesses brought in more than 80% of Allstate's revenue last year, but profits at the home-insurance unit have been inconsistent. The auto insurer was losing market share before Mr. Lacher arrived.

Allstate shares fell 5% on the day Mr. Lacher's departure was announced. Stifel, Nicolaus & Co. analyst Meyer Shields told clients the exit deepened what he called Allstate's "disarray."

Allstate declined to comment on the analyst's characterization.

The company is scheduled to report second-quarter earnings Monday. The insurer has already warned of substantial losses tied to a series of record-breaking tornadoes in April and May.

Write to Erik Holm at erik.holm@dowjones.com and Joann S. Lublin at joann.lublin@wsj.
-----------------------------------------------------------------


For A CEO Of A Large Corporation, Tom Wilson Is A Pretty Thin Skinned Character.
As a leader, one must be able to rise above any criticism.
Will someone in 'Tommy Boys' inner circle please advise him he can't fight the world?
Or, are they afraid of being fired as well? -RatPak11

http://www.mogulite.com/allstate-exec-fired/

Allstate Insurance Exec Fired For Calling CEO “A F–ing A.” Whoops!
1:27 pm, August 1st | by Hillary Reinsberg

At Allstate Insurance, one exec is not “in good hands.” Just picture the scene: a couple Allstate insurance execs milling around the hotel bar at the Orlando Ritz-Carlton. You’re all drinking some cocktails, when one senior management guy tells some of the company’s agents that he thinks the CEO, his direct boss, is a ”f—ing a—.” A few weeks later, the guy gets fired. Whoops!

According to The Wall Street Journal, Joseph Lacher, who was president of the Allstate’s home and auto-insurance units, mysteriously lost his job just a few weeks after he allegedly bad-mouthed his boss in the scenario described above. Sources said it was the last straw in a string of disagreements, but as last straws go, man, this is a bad one.

Thomas Wilson, Allstate’s CEO and President, was the target of Lacher’s sour words. The two apparently had a history of issues. Wilson thought Lachler underperformed, while Lacher thought he didn’t have enough freedom. Pretty typical.

The comments came after a large meeting, during which it was announced that the company would make major cuts to its sales force and that rules on making commissions would be changed. The announcements were obviously a burn to the insurance agents Lacher was talking to, and it seems like he seized on the opportunity to take the good guy role, and blame the head honcho.

In this day and age, simply saying two curse words actually seems pretty tame! Apparently not.

comments
You always take your chances when you bite the hand that feeds you-----no matter how evil the hand

comment:
I guess in corporate America you never tell the truth. No matter how drunk you get.

--------------------------------------------------------------------------
http://www.bhamweekly.com/birmingham/ar ... ust-4-2011).html

Storm briefs (August 4, 2011)
By Jesse Chambers

THE GOOD HANDS PEOPLE: Insurance giant Allstate Corp. suffered a second-quarter loss of $620 million after the company’s worst quarter for disaster claims since Hurricane Katrina struck the Gulf Coast in 2005, according to an Aug. 1 report by The Wall Street Journal (online.wsj.com) . Allstate had $2.34 billion in disaster costs after tornadoes hit the South and Midwest in April.

On a lighter note, a big-shot Allstate exec got fired after reportedly calling his boss “a fucking asshole,” according to an Aug. 2 report by Mark Duell at http://www.dailymail. co.uk. Joseph Lacher, who was in charge of the Illinois firm’s home and vehicle insur ance units, made this intemperate remark while having cocktails with some of Allstate’s top sales agents at a Ritz-Carlton hotel bar in Orlando, Fla. The “asshole” in question was Lacher’s superior Thomas Wilson. Lacher’s comment came after he and Wilson had earlier announced plans to downsize the company’s sales force and change the way sales commissions are calculated. The other agents, presumably including the ones Lacher was partying with, were not thrilled. That’s when Lacher flushed his $3.2-million annual salary down the crapper. I wonder who ratted him out?

Jesse Chambers is a contributing writer for The Birmingham Weekly and B-Metro magazine. Send your comments to jesse@bhamweekly.com

[RatPak11]

*CEO Thomas Wilson said that employee morale is in "fine shape" ??????
Really?????

http://sales-jobs.fins.com/Articles/SBB ... t-Allstate

Aug 02 2011
Is There Dissent Among the Troops at Allstate?
By Chris Prentice

Are you in good hands if you work for Allstate Corp.?

CEO Thomas Wilson said that employee morale is in "fine shape," during a conference call with investors, despite the fact that storm claims dragged down company earnings in the second quarter.

Recent events suggest otherwise. The Northbrook, Ill.-based company's home and auto-insurance chief was fired in May without explanation from the company. The Wall Street Journal reported that Joseph Lacher may have been fired for referring to Wilson as a "f--ing a--."

There's dissent over just what the context was when Lacher spoke the words to some of Allstate's top-selling -- and disgruntled -- sales agents at a bar. Earlier that day, Lacher and Wilson had spoken to about 2,000 agents and employees, presenting a plan that would change the company's commission structure and cut sales forces.

The company's roughly 11,000 sales agents are independent contractors, a company spokesperson said. Along with plans to reduce its sales teams, the company is boosting its direct-selling options. In May, Allstate announced a deal to buy Esurance, an online insurance-selling platform. (WSJ)
---------------------------------------------------------------------------

http://www.dailymail.co.uk/news/article ... e-bar.html

Meet the insurance executive who lost $3m job after calling his boss a 'f*****g a*****e' in bar
Allstate's Joseph Lacher lost job with Illinois company
Reportedly spoke about Thomas Wilson in Florida bar
It followed new company plans to shrink sales force
By Mark Duell

Last updated at 8:28 AM on 2nd August 2011

If there was ever the perfect example of why you should never talk about your boss behind his or her back, then this is it.
Joseph Lacher, 41, of insurance firm Allstate, was fired after reportedly telling agents in a bar that his boss Thomas Wilson was a ‘f*****g a*****e’.
His $3.2million job as president of the Illinois company’s home and vehicle insurance units came to an end eight weeks later.

His departure sent the share price down five per cent in a day and executives were told to report directly to CEO Mr Wilson.
Mr Lacher was failing in turning around the home and vehicle insurance operations but sealed his fate in May, sources told the Wall Street Journal.

He was having drinks at a Ritz-Carlton hotel bar in Orlando, Florida, with some of Allstate’s top-selling agents at a company event.
His comments came after an earlier meeting saw the two men reveal plans to shrink the sales force and change commission calculation methods.

The changes were not welcomed by some agents, and it was later at a bar that Mr Lacher helped end his 20-month career with two expletives.
Sources told the Wall Street Journal his comments were the last straw because Mr Wilson was already unsatisfied with Mr Lacher's performance.
Neither Allstate or Mr Wilson would comment, but Mr Lacher said the firm has ‘tremendous opportunity and I wish them all the best’.
Allstate is the biggest publicly-traded home and vehicle insurer in the U.S.

Mr Lacher, who has a University of Notre Dame degree in aerospace engineering, was paid $3,221,395 last year, reported Bloomberg.

Comments

And that dear children is why "yes men" get ahead and businesses fail.
- Yirmin Snipe, Boston, 02/8/2011 16:11
Click to rate Rating 26


Sounds like Mr. Lacher was right after all!
- katee, dayton, ohio, usa (expat), 02/8/2011 13:45
Click to rate Rating 20


Not the most PC of comments. However, the boss should be man or woman enough to accept that not all their employees are going to share the business direction and ethos and I am sure there will be others who share the same emotions toward him. If you let people speak their minds you at least get a true view of the business whether you like what you hear or not. In a position of power you have to be a least thick skinned. I would have had more respect if he'd have taken the bloke to one side and asked him what his concerns were rather than stick the boot in 'because he can'.
- TheKnowledge, UK, 02/8/2011 12:31
Click to rate Rating 13


And people wonder why I'm so quiet...
- joetheairman, omaha, ne, usa, 02/8/2011 10:52
Click to rate Rating 53


Oops !!
- paul, london, 02/8/2011 09:41
Click to rate Rating 37

[RatPak11]

*"CEO Wilson says agent morale holding up" ??????

Really????
When Tom looks up at the sky, does he see the same colors we do?
It must be a wonderful Pollyanna world this CEO lives in...
RatPak11


http://www.chicagobusiness.com/article/ ... ent-morale

Allstate's new business slows, but CEO Wilson says agent morale holding up
By: Steve Daniels August 01, 2011

(Crain's) — Allstate Corp. CEO Thomas Wilson tried to reassure Wall Street on Monday that morale isn't suffering among the company's 11,000 agents.

But, while the Northbrook-based insurer showed progress in improving profitability in the second quarter, it saw a key measure of agent performance—applications from new customers—decline significantly.

Allstate's applications for new auto policies fell 5.2% in the second quarter compared with the same period a year ago. In the first quarter, its applications were up 11.9%.

Allstate stock was trading up 2.5% at $28.40 just before the close of trading Monday.

Company executives repeatedly have said that actions they're taking to shed unprofitable auto customers in New York and Florida explain much of their inability to grow over the past 18 months. But, excluding declines in those two big states, applications from new customers increased just 2.4% in the second quarter versus 16.6% in the first quarter and 12.9% in all of 2010.

Speaking about agent morale, Mr. Wilson said on the company's quarterly conference call, “Morale is always a little better when you're growing and everything is good, but we're also aligned and locked arm in arm to go forward here.”

Some agents have expressed increasing unhappiness with Allstate's strategy to force smaller agencies to combine and create fewer, larger agencies. In addition, Allstate is moving to change its agent compensation to reduce commissions for retaining customers and better rewarding development of new customers.

For more than two years, Allstate has seen gradual declines in auto policies while its chief competitors all have recorded increases. Much of that slippage is due to losing customers to rivals offering cheaper policies. At the same time, Allstate has managed to boost its new customers—just not enough to make up for the loss of its own clients.

Addressing the slowdown in new business in the second quarter, Mr. Wilson allowed, “It's not accelerating the way I would like to see it.”

Mr. Wilson also dismissed the bid by the National Assn. of Professional Allstate Agents, a group representing about 1,000 agents that's been highly critical of Mr. Wilson, to affiliate with an AFL-CIO union as a guild. He said: “A guild doesn't mean anything. If you want to form a union, you actually have to be recognized by the National Labor Relations Board.”

Allstate second-quarter loss, reported Monday, came as the insurer was hammered by a previously disclosed $2.3 billion in catastrophe losses from waves of tornadoes, wildfires and storms this year.

Yet Allstate's numbers were better than Wall Street had expected as the property and casualty insurer's ratio for claims paid out vs. dollars taken in improved.

The $620-million loss at the Northbrook-based company amounted to $1.19 per share. That compared with a profit of $145 million, or 27 cents per share, in the same quarter a year ago.

Allstate's adjusted loss for the latest quarter was $1.23 per share. Analysts surveyed by FactSet had forecast a wider loss of $1.46 per share, on average.

Allstate provided coverage during 33 catastrophic events during the April through June quarter, including five tornadoes, three wildfires and 25 wind and hail storms. This year has been the deadliest for tornadoes since 1950, based on an assessment of figures from the National Weather Service.

Before Monday's earnings, Allstate had disclosed pre-tax catastrophe losses of a total $2 billion combined for April and May, and another $300 million for June.
(The Associated Press contributed.)



What do you think?
L S. wrote:
Tom Wilson is so far away from reality it is laughable, since last weeks meeting about forming a Guild NAPAA has nearly doubled it's membership. What is sad is agents are Treated like lapdogs by Allstate and the people making decisions for the company are idiots. I have a 45 year agency with Allstate and they would rather see me go and become an independent agent then try to find a home within the company for their customers.

Even highly successful agents within the company are being denied opportunities to purchase agencies that want out, further causing huge customer disruptions and declining market share. Where is the logic in all this? make a profitable agent leave the company don't allow him to sell his book to another agent so his only choice is to open an independent shop in the same location and watch the customers leave. Allstate gets it's 10% for a few months and then it's gone.

Many agents are praying that the shareholders fire Wilson by year end, but too many of us can't wait that long.

Joe Lacher had it right "Tom Wilson is an ass$&@?"

8/2/2011 10:54 PM CDT on Chicago Business
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Joseph C. wrote:
Mr Wilson is completely out of touch with reality. Having spent 25 years as an agent and sales manager, I say unequivocably that agent morale is lower than it has ever been. All higher level executives, for the first time I can remember, have no sales experience, let alone insurance sales experience. This is where the disconnect between the agency force and home office begins. Those in charge have no clue what an agent really does on a daily basis. Yet, this doesn't stop them from instituting policies and practices which run counter to a successfull sales operation. Then, once their ill fated directives don't work, they blame the agents. They don't listen to the agents. They really believe the agents have no value, totally disregarding years and years of hard work by agents to build their agencies and by extension, the company. They terminate agents with 2,000,000 dollar books of business and a 35% loss ratio, along with 85% rentention, because they didn't write enough life insurance and renters policies. All agents have taken a 30-45% reduction in earned premium over the past three years, while Senor Wilson's income and stock options steadily increase. If I had to wager, I's say they may be 100 happy agents in the entire company. I left the company 3 months ago and opened an Independent agency. The way my new partner carriers treat my operation and the way Allstate chose to deal with me are as different as night and day.
8/1/2011 9:58 PM CDT on Chicago Business
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Joseph T. wrote:
Where is Wilson getting his information from regarding morale--from an inside stooge??
8/1/2011 8:48 PM CDT on Chicago Business
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Joseph M. wrote:
What is wilson smoking that he thinks agent morale is going up? This overpaid schlub hasn't a clue about the P&C business and is driving this company steadily into the ground.
8/1/2011 5:33 PM CDT on Chicago Business
Recommend (6) Report Abuse Permalink

[RatPak11]

*Whether we agree with his reason(s) or not, Allstate CEO Tom Wilson has the right to terminate Joseph Lacher, the former president of Allstate’s property and casualty unit. However, how many of you, or how many people do you know, received a nice, fat check when they were fired?

If a CEO actually owned their company outright, I don't believe they would fire the person who just called them a 'F#*ing A*#hole' then hand them a huge check before kicking their sorry ass out the door... But, this is how it's done on Wall Street.
RatPak11

http://www.chicagobusiness.com/article/ ... ation-deal

Severance of $730K for former Allstate exec
Allstate ex-president receives $730,000 in separation deal
By: Steve Daniels September 02, 2011

(Crain’s) — Joseph Lacher, who abruptly left his senior post at Allstate Corp. in July in a tiff with CEO Thomas Wilson, will receive $730,000 cash in a separation agreement, the company disclosed late Friday.

Mr. Lacher, who was president of Allstate’s property and casualty unit, won’t get any payments that otherwise would have been due him under Allstate’s executive incentive plan for 2011, the company’s severance plan or his change-of-control employment agreement, according to the filing with the Securities and Exchange Commission.

He has agreed to forfeit his unvested stock options and restricted stock.

Earlier this year, Mr. Lacher, who joined Allstate in late 2009 from Travelers Corp., was perceived on Wall Street as the key player in the company’s turnaround efforts. Northbrook-based Allstate has steadily lost marketshare to competing auto insurers in recent years.

Allstate stunned investors in July when it announced his sudden departure. Sources later indicated that a key reason was Mr. Lacher’s denigrating comments about Mr. Wilson to a group of Allstate agents at an annual function in May.

Mr. Lacher’s total compensation in 2010 was $3.2 million, of which $900,000 was cash, according to Allstate’s proxy statement.

The separation agreement includes non-competition, non-solicitation and non-disparagement requirements for Mr. Lacher.

*When I was forced to leave Allstate, I did not receive a fat check but then, I was not required to sign any agreements regarding 'non-solicitation and non-disparagement requirements' which is why I get to write all these great comments regarding Allstate's illicit business practices. RatPak11

[RatPak11]

*Read the following article. I've already made my comments regarding some glaring statements from Allstate CEO Tom Wilson (quotes from the article are in red):

*"Chief Executive Tom Wilson says he hopes a more-effective sales force will reverse the decline in policyholders"??? Is this guy for real? This idiot must have his head buried in a dirty catbox somewhere inside some lonely shut-in's darkened bathroom. How can a company have an effective sales force when that company continually raises its rates in leaps and bounds on their loyal customers then reduces their coverage? Takes premiums from customers bank accounts when they've already cancelled their policy? Sends their customers non-renewal notices because they do not have other policies with Allstate? Sends customers cancellation notices that are completely unexpected and appear to be arbitrary? Cuts the agents sales commission? Sets unobtainable goals for the Allstate agents and the Allstate adjusters? Sends their own agents letters threatening them with their jobs? Why would anyone in their right mind want to stay with a company that treats their customers and employees as Allstate does?

*"Mr. Wilson said in a conference call last month that morale wasn't a problem." Really? I could have sworn I read somewhere that the Allstate agents voted to unionize by an extremely large margin, due to Allstate's disrespectful and intentionally damaging mistreatment of its own agents. How can sales agents have good morale when it is painfully obvious that these agents do not get any support whatsoever from the haughty directors of this now crooked company? Do they really expect the agents to agreeably smile and bow when Allstate management is slipping their dirty hands into the agents pockets and stealing their hard earned money while threatening them with their jobs if they don't produce more? Firing long time, loyal sales agents for not meeting unobtainable goals? How can Tom Wilson expect to be trusted when he continually lies to the Allstate employees, agents, policyholders and the press? There can be no doubt, this war between the agents and the management was caused directly by the Allstate administration.

Tom Wilson,
Do you really want to know why agent morale is so low? Pull your head out of the sand, turn on the light and look at yourself in that grimy mirror. YOU are the man in charge. The buck stops with YOU. Learn to accept responsibility. A true leader would have already done so.
RatPak11

http://online.wsj.com/article/SB1000142 ... 27014.html

Allstate Thins Ranks
Insurer to Revise Compensation Eight Years After Expansion.
SEPTEMBER 27, 2011, 10:26 P.M. ET.

By ERIK HOLM

Allstate Corp. pushed for growth eight years ago by bringing on hundreds of new agents. Now the insurer is pushing for results by thinning its ranks.

The company is planning an overhaul of its compensation structure that will increase rewards for its best agents while pushing less-successful ones out the door.

The Northbrook, Ill., company says it will cut base pay by 20% for all its agents—who are contractors, not employees—so more money can be paid in additional performance bonuses to the top tier. Allstate also has ramped up an initiative to give its better agents loans to help them buy less-successful agencies and take over their client lists. The overhaul will be rolled out over the next two years. An Allstate spokeswoman said the company had no set target for how many agencies it expected to have once the process is completed. It now has about 11,500 agencies in the U.S.

The goal of the changes: to have a sales force better at finding and retaining customers and more capable of cross-selling, that is, selling a bundle of products to each customer instead of just a single policy. The company says larger agencies are more able to achieve those goals, though some smaller agencies have expressed skepticism that the company's solution is the best way to improve results.

The move to consolidate agencies is a reversal from a push Allstate made to add agents from 2003 to 2007, leading to an excess of agencies that are too small to thrive. Allstate agents bring in an average of about $1.9 million in premiums each year, while the agents at State Farm Mutual Automobile Insurance Co., a larger rival owned by its policyholders, bring in about $2.9 million on average.

Allstate's new pay structure, which won't take full effect until 2013, will reduce agents' base commissions to 8% of their premiums from 10%. Agents have to pay office staff, rent and other expenses out of those commissions and are eligible for additional incentive compensation.

At stake is Allstate's spot as the second-largest home-and-auto insurer in the U.S. by premiums. The company has been losing market share for yearsand ranks behind some rivals in recent customer-satisfaction surveys. The number of drivers buying Allstate's standard auto policy has fallen 4% in the past three years, while the number of home-insurance customers have dropped 12% under an initiative to limit the company's exposure to natural disasters.

Chief Executive Tom Wilson says he hopes a more-effective sales force will reverse the decline in policyholders and help return the company to the profit levels it had before the financial crisis. Allstate's stock fell by roughly half in the three years through Monday. Allstate's shares rose 27 cents, or 1.2%, to $23.80 in 4 p.m. composite trading Tuesday on the New York Stock Exchange.

"If you're a small agency and you have 1,000 accounts, you can't afford the kind of support staff you need, you can't have the broad product knowledge you need, so you're going to have trouble being an expert" in all the products Allstate sells, Mr. Wilson says in an interview. "You have to have enough size and scale and revenue flow to invest in what you need to."

Mr. Wilson says the company has internal measures of agent performance that show which ones will be successful, and it can lend those agents the funds to buy out underperformers.

Among the program's recent sellers is Patrick Campbell, a longtime agent in Novato, Calif., who sold his book of $1.5 million in annual premiums last month.

"It worked out for us," he says. But with a growing number of sellers and Allstate's veto power over sales, Mr. Campbell says he expects that the prices that agents can get will decline. "I think I got out just in time."

Some agents have objected to the company's plans to alter the commission structure. The National Association of Professional Allstate Agents in August voted to affiliate with the Office and Professional Employees International Union, a decision NAPAA said was driven by anger over the changes.

NAPAA Executive Director Jim Fish said some agents see opportunity in Allstate's changes. "The top tier of agents is going to do very well," Mr. Fish said. "But in general, morale is very low. People want out."

Mr. Wilson said in a conference call last month that morale wasn't a problem. He said many agents are "highly supportive of our strategy," he said.

Analyst Robert Glasspiegel of the Langen McAlenney unit of Janney Capital Markets says implementation will be a key to Allstate's success. "It all comes down to execution," he says. "Morale can be turned around by good performance.…They need better earnings…before anything can happen with respect to morale."

Write to Erik Holm at erik.holm@dowjones.com

Comments:

Jonathan Seastrunk wrote:
My biggest question is why they have so many agents in the first place. I personally have never even met my agent - all my interaction is via their web site and corporate office for claims. I understand they need them mostly as a sales force, but they might get better results by lowering rates for those who choose to bypass the agent.



David Soto wrote:
Ha! Allstate wants contractors to be better salesmen on less money with no benefits? Yeah, good luck with that!


.Greg San replied:
they are cutting base commissions. if you do more production, your pay scale goes up. thats an incentive to do more volume

David Soto replied:
The trap of that kind of game is that as salesmen reach or exceed their quotas, the bar is continually raised until you cannot make a decent living, but you are working your tail off for nothing.

Some incentive. It's the oldest sales trick in the book.

Carl Castrogiovanni replied:
"the bar is continually raised until you cannot make a decent living"
If they don't think they're being sufficiently rewarded for their efforts, they can move on. We still have free choice in the U.S. ...
I'm not defending Allstate (I have no horse in this race), but the corporate bashing in some of these comments smacks of an entitlement mentality...



Dave Peterson wrote:
Corporate America reminds me of the federal government. Pay people to dig holes. Then pay them to fill them in.

Scott Murphy wrote:
Perhaps instead of dealing with physical offices and agents, Allstate might be better served by moving to a "direct-to-customer" model like GEICO, USAA, Ameriprise, etc.

Art Haiss replied:
Allstate needs to find a buyer.The insurance business is not that difficult.

Jim Vergas wrote:
Allstate is always comparing itself with and trying to compete with State Farm, and they always come up short. One difference that never gets mentioned is that State Farm is a mutual company and is owned by its policyholders. Allstate has to answer to its stockholders and a board of directors. State Farm's claims service is great. They don't have the claims scandals like Allstate did after the Northridge earthquake. When a company has continuing management changes like Allstate you're going to have start-stop situations like this because management is always under pressure to make something happen. I am not a State Farm agent, just a policyholder.

Todd Transue wrote:
How are those people contractors and not employees? Those "contractors" better be selling more than Allstate insurance or they will fail the contractor/employee IRS test.

Martin Johnson replied:
You are absolutely correct. They don't allow them to sell any "outside" products that are not appoved. The agents cannot sell ancillary services or products. It is a sham. The IRS should have been after Allstate years ago. Allstate dictates everything. They avoid the franchise regulations of each state as well since they claim the agents are "contractors".

Thomas Sofos wrote:
Here's another stupid All State president who wants more production by screwing his sales force.
It seems all state breeds these guys regularly, give them the Kool Aid, and tell them to make decisions.
The dumber the better.
Its typical.

Richard Mattis wrote:
Allstate wants what every company wants-- they want the 20% of the anencies that do 80% of the business and they don''t care what they have to do in order to do it. First they stopped writing policies in areas that have natural diasters and now they want to get rid of their smaller brokers. Good luck Allstate. I will never give you a dime of my money!

Carl Castrogiovanni replied:
"First they stopped writing policies in areas that have natural diasters..."
I'm not at all defending Allstate, but what's wrong with that? Given the current set-up in the U.S., why would any insurance company want to continue operating at a loss in such areas?
"...and now they want to get rid of their smaller brokers."
So, you want companies to keep paying for unproductive salespeople? The article suggested that the smaller shops get bought out by the better ones so the better agents can serve those customers.
Pay, benefits, etc. are based on performance and meritocracy in a free enterprise system...

GENE BELLON replied:
Carl
There are no benfits! Agent is captive and pays for everything out of his pocket. it is correct to minimize risk from catastrophe, but these people apparently rolled outcrappy producy=t and hired agents in every nook and crannie to sell againsr each other. Now the product does not work and this is another restructuring excuse. we can disagree, but there are probably many medium agents who worked their butts off to build a franchise (captive remember) and bore all the expense and now can just be cast off. I just think something smells here.

Steve Mccaslin replied:
Carl! I was an agent for Allstate and I sold out 5 years ago! First off it doesn't cost them a dime to have agencies the cost is on the agents to pay rent, salaries, taxes, etc.... Second State Farm pays their agents a higher commission by about 6 percent. On a book of 1M that is an increase of $60,000 per million in premium. In addition, I have first hand knowledge the call centers are doing some serious unethical and possibly illegal things in their compensation to those employees.

John Herman wrote:
Allstate is losing business not because of its agents but rather because of lousy service, claim service in particular. In my case(commercial truck accident), their claim service was terribly slow to begin with, the adjuster didn't know what he was doing and then, low-balled me on the total loss settlement. I ended up settling with the third party carrier for 15K more, the fair value.
I switched to Farmers Ins and haven't looked back. Farmers is a great company.

John H. Nadeau wrote:
Looks as if the 'Mayhem' commercial has turned on it's employees !

.David Barth, CFA wrote:
Fire the agents so you can keep their renewals and residuals. A trick of greedy insurance company managjemnts, many of whom never sold any, of pumping up earning by, in effect, stealing money from their own workers.

Joseph Smith replied:
Actually a common trick of many sleazy, low-life sales managements.
This is why you should never work for just straight commission in a sales job. Too often they give you 3-6 months to build a pipeline and then fire you so that they can go close your business and not have to pay any commissions.

John Allstate wrote:
Tom Wilson (Allstate's CEO) has not changed. He did the same thing when I worked for Prudential Financial from 1998 to 2003. Wilson was CEO of Prudential from 1999 to 2002. Durring his time at Pru he cut commissions to 6% to make the P&C division look profitable then slod it to Liberty Mutual. He also sold Prudential Securities to Wachovia and opened PruCo Secirities the very next day... see any Wachovia banks any where? This man does one thing: Max Share holder wealth. He made almost 11 mil from Allstate last year and will make almost 10 mil this year. How can he make this much money with Allstate's stock price falling more than 30% since May 2011?

Steven Smith wrote:
The deal is you get a flat 8% on both renewals and new business, the "enhanced" commission is supposed to be up to an additional 6%. So if you max out you get 14%. That is if you exceed your goals which the company makes out of reach. You have realize that you have to pay rent, hire employees, pay taxes on your employees, buy marketing to get business (people just don't walk through your doors like 20yrs ago) that all adds up.
To the person that said they never have seen their agent in a long time or ever spoke with them, nothings stopping you from driving to their office or calling them on the phone.
The CEO states that agents are behind this change and moral is not low? He needs to get his head out of his a** and leave his office once in a while because agents do not like him at all.

Don Hansen wrote:
I can't stand a pushy salesperson -- someone who hounds you, or wants to "review" your coverage every year (in hopes of finding something new to sell you) so, I suspect that the 'best' agents are also the most annoying to customers. Ergo, unprofessional.
Maybe instead, they should encourage consolidation: bringing together smaller agents into hub offices that can share staff, facilities, and knowledge.

rian davis wrote:
I will never do business with over zealous sales staff whom I know only want to make a commission. That's why I stopped going to Circuit City a while back and went to Best Buy instead.


Malissa Weikel Wrote:
This is so sad. My brother is one of the 'small agencies' that is affected by this. He opened 2 years ago and really cares about his customers. It's hard to keep new business flowing in when you spend your time fighting for your existing customers, but he knows that it is the right thing to do, unlike alot of other agents. One of the big problems is, he's got potential customers coming in and he can't get them written! They keep raising their prices and he's got to look for any loophole he can to reduce their rates before they leave, which usually means fighting inspectors and underwriters. It's very frustrating and in 2 years, he has not taken a paycheck in order to pay his small staff. He stands to lose $80,000 if he 'pushes the button'. I hate to see him give up, but this article proves what he's been suspecting for a while now. It's time to go independent!