Have an $11M Allstate Agency. Should I Go IA?

[Josh]

If you're going to have a hard time making it with a book that size how in the world does Allstate plan on attracting new agents?

The new agent commission schedule is quite aggressive (sometimes up to 40%) and they do provide a great deal of support, brand recognition, etc.

In my eyes those are your customers. You might check out any cases in your state involving former Allstate agents and see which way the law viewed it.

The contract reads completely different. If he was an indy agent that'd be one thing, but he's not. It's a captive agent agreement. Ultimately mother Allstate owns that book of business. This would be a total and complete violation of the agents contract with Allstate and the courts are going to uphold the enforceability of that contract. Allstate has invested heavily in the agents success and in exchange for that support the ownership an agent has on their book of Allstate business is somewhat limited. Honestly I'm surprised he's even asking about rolling the book, it's an obvious violation of the contract and I thought agents understood that, but I suppose I was wrong.

 

[xrac]

I second this post...You may think you own your book of business but you need to reread your contract...From what I have heard your potential buyers must be approved by Allstate and I am almost willing to bet my life you have a strong non-solicitation and a geographical non-compete.

I can understand the frustration that you have built this agency and now your only carrier is thinking about cutting comp on you, been there done that on Life & Health, but do not forget your contractual obligations.

Pull out your contract and re-read it...Then bring it to your attorney and have him review it and discuss exactly what it means....I did that on a previous contract, I read it and thought it meant one thing and took it to my attorney and he agreed it worked like I thought but he pointed out the wording in the contract actually worked ouot even better in my favor than I realized (Those commas and period can really make a difference in a contract).

Having said the above and even if your contract clearly said you could roll the book (which I doubt) I would expect if you tried to roll 11 Million in premium away from Allstate to quickly see cease and desist letters and then a lawsuit, they may not win but neither would you, they would tie up all your time with the lawsuit so no prospecting time they would hamper your growth buy tieing up all your funds defending a lawsuit and don't forget the lawsuit will probably take place according to their contract in their home state I don't know where you are located but factor that into your thinking.

I think he has a non solicit for a certain period of time and then they are fair game. He also can go ahead and open an IA under his wife or someone else. I am sure that this gentleman knows the rules of the game. You do not have abook of business that large and be a dummy.

 

[Josh]

I think he has a non solicit for a certain period of time and then they are fair game. He also can go ahead and open an IA under his wife or someone else. I am sure that this gentleman knows the rules of the game. You do not have abook of business that large and be a dummy.

I admire your optimism, but he did say this:
" I also do not know how easy it will be to get appointed and "roll" my business"

That seems pretty direct. Also, and not for nothing, but you can have a book of business that large and be a dummy or blinded by greed. Not saying the OP is either, but simply because the OP has a large book of business doesn't imply either are beneath them.

 

[houcoogster]

Well if this is the case and it probably is then the only other thing I can suggest is to double down and buy out another Allstate agency.
I'm sure the wife trick won't work either (if he has one) ole' Allstate wasn't born last night. Everytime I start to ponder going with Allstate of Statefarm a post like this comes up and quickly dismiss the idea, its all for nothing if you don't have "Freedom".



The contract reads completely different. If he was an indy agent that'd be one thing, but he's not. It's a captive agent agreement. Ultimately mother Allstate owns that book of business. This would be a total and complete violation of the agents contract with Allstate and the courts are going to uphold the enforceability of that contract. Allstate has invested heavily in the agents success and in exchange for that support the ownership an agent has on their book of Allstate business is somewhat limited. Honestly I'm surprised he's even asking about rolling the book, it's an obvious violation of the contract and I thought agents understood that, but I suppose I was wrong.[/quote]

 

[Norwayguy]

I think he has a non solicit for a certain period of time and then they are fair game. He also can go ahead and open an IA under his wife or someone else. I am sure that this gentleman knows the rules of the game. You do not have abook of business that large and be a dummy.

Have you read the contract? I have not but have had an uncle sell his P&C business it entailed a geographical non-compete he would need to move his agency 50 miles from his former agency if he wished to reopen a P&C agency as well as a Non-solicitation agreement.

Ah the open an agency under the wife deal....There is or should I say was a very large Nationwide Agency in one of the large cities in my state...The owner did exactly what you suggested he opened another agency under his wife as the licensed individual and started moving the business toward the IA agency, it didn't take Nationwide too long to figure out what he was doing (think competition here I believe his competitors narc'ed him out) Nationwide swooped down and terminated him for cause.

 

[b61mack]

i believe you can sell your book of business back to allstate. at a %. then what ever the contract says, about non-compete,abide by it... remember allstate has deep pockets, you don't need to get them mad at you....

 

[161]

Hey guys, thanks for the input. I have a full understanding of my "agreement" with Allstate. As someone said - and thank you by the way - I am not a "dummy". I have been at this for quite some time and built this agency from scratch. If I have to do it again, I will.

That being said, I do not want to leave and go IA. I would rather stay with what I have and make everything work. But how do you run a book on 6/6? Hopefully these are just rumors that will never come to fruition.

Thanks again for the input, I really appreciate it.

 

[xrac]

Hey guys, thanks for the input. I have a full understanding of my "agreement" with Allstate. As someone said - and thank you by the way - I am not a "dummy". I have been at this for quite some time and built this agency from scratch. If I have to do it again, I will.

That being said, I do not want to leave and go IA. I would rather stay with what I have and make everything work. But how do you run a book on 6/6? Hopefully these are just rumors that will never come to fruition.

Thanks again for the input, I really appreciate it.

I never figured you for a "dummy". Far from it to build a book of business like you have. However, it seems to be that one of Allstate goals is to eliminate all small books of business and to push as much on to the internet as possible. Do you read the RunningClock? There is a lot of stuff rumored to be coming down the pike on there.

 

[BTFuzz]

Hey guys, thanks for the input. I have a full understanding of my "agreement" with Allstate. As someone said - and thank you by the way - I am not a "dummy". I have been at this for quite some time and built this agency from scratch. If I have to do it again, I will.

That being said, I do not want to leave and go IA. I would rather stay with what I have and make everything work. But how do you run a book on 6/6? Hopefully these are just rumors that will never come to fruition.

Thanks again for the input, I really appreciate it.

Wow...$11m from scratch is impressive. Were there any acquisitions or was it all organic?

Good luck with everything!

 

[cjones]

Can someone tell me what 6/6 is?