Allstate Insurance Company has reported a considerable drop in its insurance agent count.
In a Securities and Exchange Commission filing submitted on February 16, the insurer disclosed that it has just 8,400 agents that are contracted to sell Allstate auto and home insurance exclusively. That count is a significant drop from the 9,300 it had claimed a year ago, and 10,400 two years ago, based on previous SEC filings.
Crain’s Chicago Business reported that the Illinois-based Allstate had topped an agent count of 12,000 in recent years, before the decline occurred.
It was reported that on top of the agent reductions, Allstate agents’ physical storefronts have also dropped in number. Hundreds of the insurer’s agents have been urged to instead work out of their homes, as Allstate encouraged sales reps to utilize centralized call centers to offer services to clients.
There are also concerns that Allstate may be forgoing agents and transitioning to direct sales, with CEO Tom Wilson expressing interest in selling insurance and other products through different other channels apart from agents – and that change may be happening sooner than later.
Last year, the company’s agents accounted for 38% of new auto policies, compared with 71% in 2020, Allstate’s SEC filing revealed. Meanwhile, direct sales to customers either through the internet or phone made up 35% of sales in 2022, compared to 24% in 2020. Independent agents (27%) accounted for the rest of the sales the company made last year.
It should be noted that Allstate introduced a discount system in 2020, which allowed customers purchasing auto insurance directly from the company to save 7% on their costs, versus purchasing from an agent.
An association of Allstate agents expects the number of agent sales to continue falling over time.
“We see trends going toward fewer and fewer agents on Main Street USA,” said National Association of Professional Allstate Agents (NAPAA) executive director Ted Paris.
It was also observed that Allstate changed its agent compensation system in recent years, reducing what the insurer pays its agents on customers’ renewals while increasing pay for new business. This, Crain’s Chicago Business reported, has pressured several agents to leave the business.
News of Allstate’s lowered agent count comes after Bloomberg earlier this year broke the news that the insurer turned to its pool of recently fired tech workers to overhaul its business. The insurer is looking to push for technology such as telematics-powered auto insurance, user-friendly mobile applications, and AI-assisted insurance quotations.
