>>> <Leslilake1 at aol.com> 04/20/00 02:04AM >>>
Went to pay my car insurance bill today, and in the course of discussing why
my rates were increasing despite clean record, my agent told me that Allstate
would be "firing" all of its agents by next year - and nobody knows exactly
what's going to happen after that - their services to be replaced by the
Internet, possibly. He also said that he wasn't able to write policies for
80% of the business that walked in his door because of credit problems. And
that he had had to lay off all of his staff except his wife because of his
margins being squeezed by Allstate. And that - I didn't get the details of
this - that the insurance business was in big trouble generally, not only
Allstate, and there were going to be big rate hikes next year. I had to stop
talking because there were people waiting behind me - does anybody have any
background on this?
-------------------------------------------------------------------------------- By RobTruth on Friday, April 21, 2000 - 05:46 pm: A little
Allstate is transitioning their agents to become Independent Contractors. Presently, they are classified as agent/employees, with benefits, salaries, , company supplied office, computer,etc.
When they become IC's, they are strictly commission and they lose most/all of their company-supplied perks and benefits. The commission paid to IC's is gnerally much higher than to those who are on a salary/commission basis. Companies like this model because it makes the sales reps more "hungry", eliminates the people who have been just "coasting", and provides immediate savings as it relates to employee-generated expenses.
The Internet is a driving force behind this. Thats why companies such as Geicko are asking for your business. Thats why the traditional insurance companies such as Allstate, State Farm, etc. now promote the responsiveness of getting a claim paid, their superbly trained, caring agents who want to do the right thing for your family in time of trouble, etc. Not a faceless person on the phone whom you've never met or interfacing with a computer screen.
-------------------------------------------------------------------------------- By Greg on Friday, April 21, 2000 - 07:26 pm: And let's face it , the open secret regarding this healthy economy is that it ain't healthy, it's smoke and mirrors for most Americans. The insurance industry is in trouble. Some say when that bubble does burst, it will dwarf the Savings and Loan catastrophe of a few years ago. I think the insurance companies are scrambling to cut their fixed cost in anticipation of the hard times to come. Payroll is a fixed cost. When an employee becomes an independent contractor, his or her pay is now a variable cost. You only pay them when you need to their services