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Agency Purchase Mini Brochure Allstate Ea Op


Allstate Exclusive Agent Owner Business Opportunity

Allstate Exclusive Agent Owner Business Opportunity

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  • 1. Choose your own direction. Purchasing an agency as an Allstate Exclusive Agent. R27326
  • 2. Take a good look at your life. Where do you want to be five or ten years from now? Running your own business? Being your own boss? Enjoying financial rewards? If you answered, “all of the above,” then you’ve come to the right place. You are here. Allstate is a proven leader in a very competitive field – insurance and financial services. Today, we’re continuing to strengthen our position by expanding our Exclusive Agency force, which we believe is the best in the business. Proven professionals who thrive on helping customers protect and build their tomorrows. Pros who know how to win. Pros who may be just like you. 2
  • 3. “I was working as a part of a support team for an insurance agency for years and had a great feel for the business. I always knew I wanted to run my own business. Once I looked around, I realized that the only opportunity for me was the Allstate Exclusive Agent opportunity. It gave me a chance to run my own business, make my own money and offer a wonderful array of insurance and financial products from Allstate.” Exclusive Agent Miami, Florida 3
  • 4. “My decision to purchase an agency a few years ago has proven to be the best decision I have ever made. Coming in the door as a new small business owner and having the Allstate name to stand behind gives me instant credibility. The Allstate product options offered me what I needed to succeed.” Exclusive Agent Laurel, Maryland 4
  • 5. Being the boss means your business is your baby – you determine how it grows. Allstate’s Exclusive Agency Program provides you with a unique entrepreneurial opportunity where you will have the support and expertise of one of the country’s most established insurance companies. Where you’re the boss. As an independent contractor, you’ll choose your own office location and hire your own staff. You’ll also build a book of business in which you have an economic interest. * 5 * Economic interest may be sold to Allstate-approved buyer only.
  • 6. Purchasing an existing agency1 from an Allstate Exclusive Agent is just one of multiple ways to become an Allstate Exclusive Agent. Start here. With the option of purchasing an existing Allstate Agency1, you have the advantage of buying a business that’s already up and running. In fact, you may choose the level of business activity based on the size of the agency you purchase. There are different bonus and incentive opportunities available depending on whether the agency has less than 750 PP&C policies or more than 750 PP&C policies. 1 Allstate is not a party to the sale nor does Allstate participate in the sale negotiation or agency valuation process. Exclusive Agents have an economic interest in the customer accounts they develop under the Exclusive Agency Agreement with the Company. Exclusive Agents may sell their economic interests to an Allstate-approved buyer when their agency relationship with the Company ends. Allstate retains ownership of the book of business. 1 Allstate will provide you with information on the Exclusive Agency Program, market information, and the purchase process. However, it is strongly recommended that you consult with outside advisors (attorney, tax advisor, accountant, banker, etc.) before 6 purchasing an agency from an Allstate Exclusive Agent.
  • 7. BECOMING AN ALLSTATE EXCLUSIVE AGENT . . . Purchasing2 an Completing the Starting a new Being assigned3 a Exclusive Agent agency book of business agency from an Employee Program1 existing Allstate Exclusive Agent Less than 750 More than 750 PP&C policies PP&C policies The Allstate Exclusive Agent Employee Program is offered in select states. 1 Purchase, as used in this document, refers to the purchase of the economic interest 2 in the Allstate customer accounts serviced by an agency. Where available, an agent may be assigned a book(s) of business as the agent of 3 record. The commission amounts for the assigned policies are 6% for Standard Auto and Property and 4% for Nonstandard Auto for five (5) annual renewals following the date of assignment. The assigned policies are not eligible for inclusion in Termination Payment calculation for five (5) annual renewals following the date of assignment. 7 Allstate retains ownership of the assigned policies.
  • 8. Allstate offers you the opportunity to team up with a Personal Financial Representative, a specialist in life, savings and financial products. There are plenty of good reasons to do this, including: More revenue and economic value for your agency through I cross-selling property and casualty with financial services Better business retention as customers begin to call on your I agency for a wide range of insurance and financial products More experience in financial services, sales and marketing I You can free up your time to develop other parts of your business. The only thing required of you is ongoing communication and a mutual understanding of goals. The choice is yours. Team up with a Personal Financial Representative or run the show yourself. Drive your business as a team 8
  • 9. or on your own. “Teaming up with a Personal Financial Representative absolutely enhances the retention of the customer, which obviously means more commissions for the agent. It’s just the fact that you know the customer very well.” Exclusive Agent Jacksonville, Arkansas 9
  • 10. Independence is what makes the Allstate Exclusive Agent opportunity ideal for motivated people with sales experience. But, you’re not set adrift on your own. We offer the tools and Field Distribution Leaders are available to provide consultation and support to help you succeed expertise to help you profitably grow your agency. In addition, you’ll have access to education programs, an advanced computer system, every step of the way. 24-hour customer service and much more. Plus, our highly competitive commission structure and rewarding recognition programs can help your business grow by motivating both you and your staff. Support here, there, everywhere. 10
  • 11. The right products to help you succeed. As an Allstate Exclusive Agent, you’ll have a comprehensive line-up of excellent, affordable products to meet the needs of the customers. AUTO INSURANCE PROPERTY INSURANCE Homeowner Preferred Auto Condo Indemnity Auto Customizer Motorcycle Business Package Policy Motorhome Renters Motorclub Mobile Home Commercial Auto Boat Commercial Fleets Recreational Vehicle Flood FINANCIAL PRODUCTS Personal Umbrella Policy Commercial Property Policies Life Insurance SPP (Scheduled Personal Property) Annuities LPP (Landlord Package Policy) Mutual Funds IRAs Extended Care Insurance CDs1 Money Market Accounts Disability Insurance Supplemental Health Insurance 1 Banking and savings products such as CDs are offered through Allstate Bank, Member FDIC. Non-deposit investment products sold by other companies within the Allstate family of companies are not insured by the FDIC, are not a deposit or other obligation of, or guaranteed by, Allstate Bank and may be subject to investment risks, including possible loss of principal amount invested. In certain states, the referral of CDs is limited by state securities laws to agents who are registered 11 securities representatives.
  • 12. As you evaluate the opportunity to buy an existing Allstate Agency, here are a few questions to ponder: What is the business environment? I What are the financial results of the agency? I Is the agency an efficiently operated business? I Will agency staff be retained after the purchase? What is their I value to the agency? What staffing issues exist? I Will the existing location be maintained after the agency purchase? I What factors may affect the retention of customers in the book I of business? How will the agency purchase be financed? I What legal issues should be considered? I For more details on any of these questions and other items to consider, please review the appendices in the back of this brochure. Before you decide. 12
  • 13. How long does the process take? We’ve created an easy-to-follow, four-part process that starts about a year before the effective date of sale. Your individual timeline may be shorter or longer, depending on your circumstances. For a more detailed look at the timeline, please consult the appendices at the back of this brochure. 13
  • 14. “After a year and a half I look back and am so thankful I made this decision by coming aboard.” Exclusive Agent Tampa, Florida 14
  • 15. The Allstate name is one that is associated with reliability and financial strength. Starting in 1931, selling auto insurance through the Sears catalog, Allstate has built a legacy of innovation, service and success. We are ranked among one of the Fortune 50 companies and our slogan, “You’re in Good Hands with Allstate ,” is one of the ® most widely recognized in the business. At Allstate, we’re right with you. In today’s changing economic environment, we’re poised to continue our success. Many insurance companies have come and gone, or strayed far from their roots. But we remain true to a fundamental idea – to deliver protection, peace of mind and a better quality of life to all our customers. We’re looking for entrepreneurial sales professionals who like working with people and want to grow with us. If you’re interested, we would like to talk with you. We may have a successful future in common. To learn more, call Allstate today at 877-258-9012, or visit our website at 15
  • 16. Appendices APPENDIX A Purchasing an Agency... Things to Consider. APPENDIX B Estimated Timeline of Key Events for an Agency Sale. 16
  • 17. APPENDIX A Purchasing an Agency... Things to Consider. As you evaluate the Allstate Exclusive Agency Program to determine if purchasing an agency is the right opportunity for you, there are several things you may want to consider. This list provides you with a starting point. Please note that Allstate is not a party to the sale, nor does Allstate participate in the agency valuation, sale negotiation, or terms of the sale processes. We recommend you consult with your attorney, tax advisor, and other financial professionals before entering into an agreement to purchase an agency from an Allstate Exclusive Agent. Agency Valuation Several factors may affect the value of an agency. There are companies that specialize in helping people determine the value of a business they may want to buy. You may find independent business valuation helpful. To assist you in evaluating this opportunity, we've put together some commonly-asked questions in a variety of categories. MARKET ANALYSIS FINANCIAL RESULTS What is the business environment? What are the financial results of the agency over the past three years? Market demographics I Revenue growth I Volatility — regulatory changes I Number of policies I I Catastrophe exposure and management I Number of households I Local growth strategy I Policy retention I Competition I New business production I Average premium per policy I Office expenses I Revenue by line of insurance CUSTOMER RETENTION ISSUES I Claim results — loss trends Which factors may affect the retention of customers in the book of business? Zip code analysis of customer base I Average age of customer base I PRODUCT MIX I Retention of agency staff What is the composition of the product and I Pending rate changes customer mix in the book of business? I Selling agent involvement in the agency after the sale Mix of business I I Customer satisfaction measurement Number of policies per household I I Customer complaint volume I Business quality — underwriting guidelines I Rate activity in the past 12-24 months I Percent financial services business I Percent service account business — business not written by the agent but serviced in the location. This business is paid at a lower compensation amount. 17
  • 18. Purchasing an Agency... Things to Consider (cont’d) OPERATIONAL ISSUES PURCHASE FINANCING Is the agency an efficiently operated business? How will the agency purchase be financed? Processes for producing and retaining business Type of business loan and lender I I I Results measurement and tracking Length of approval process I I Customer records and documentation I Lender requirements I Agency use of technology I Capital to be invested I Errors and Omissions claim history I Repayment plan fits agency cash flow Will agency staff be retained after the purchase? What is their value to the agency? Tenure of staff I LEGAL CONSIDERATIONS Technology skills I What legal issues should be considered? I Sales skills I Insurance license(s) Attorney involvement throughout the purchase I I Customer and community relationships process including terms of the purchase agreement I Defined staff responsibilities I Tax planning considerations I Choice of entity, e.g., sole proprietor, limited What staffing issues exist? liability company (LLC), or corporation I Agency licensing requirements Compensation I I Pending lawsuits, liens, or judgments Staff training I I Staff accountability for results I Staff performance evaluations I Staff turnover OTHER CONSIDERATIONS Will the existing location be maintained after the agency purchase? What are some of the other items I should consider? Market presence I Licensing Requirements — in addition to Assume lease/sublease I I property/casualty and life licensing, securities licensing I Terms and conditions of lease is required. An extensive background check is completed I Tenant improvements by the NASD, (National Association of Securities I Landlord relationship Dealers) as part of the securities licensing process. I Local zoning ordinances I Retirement planning I Signage I Commissions and commission charge backs received after the sale on business written or terminated before the sale I Accounting decisions — responsibility for expenses incurred prior to the sale when payment is due after the sale I Errors and Omissions insurance — extended coverage after the sale I Key person life insurance 18
  • 19. APPENDIX B Estimated Timeline of Key Events for an Agency Sale. 12 MONTHS DATE OF SALE 9-12 MONTHS PRIOR 6-9 MONTHS PRIOR 3-6 MONTHS PRIOR 3 MONTHS PRIOR to the effective date to the effective date to the effective date and up to the effective date of the sale of the sale of the sale of the sale Program Review Program Requirements Agency Sale Process Final Steps After you have identified Take the Agent Selection Negotiate and finalize Complete the Education I I I I an agency for sale and Process test the terms of the sale Program started preliminary sale with the seller Pass the background If applicable, complete I I discussions, meet with a screening Make financing the assignment of I Field Distribution Leader. arrangements, commissions paperwork Complete the capital I You will receive an if necessary requirements worksheet Provide the region with proof I overview of the Exclusive Make arrangements of Errors and Omissions I Complete a business plan I Agency Program and to lease office space, insurance and Workers’ Obtain licenses and sign the buyer requirements. I if necessary Compensation insurance, as Letter of Understanding for Review the Exclusive I well as direct deposit form, Make arrangements for I securities licensing Agency Agreement and agency desk top computer furniture, equipment, and After successfully Supplement, Exclusive I system agreement form and supplies, if necessary completing the previous Agency Independent any other information steps, you will receive Contractor Manual, and requested preliminary approval Exclusive Agency Reference to continue with the Guide sale process Review the Cash I Note: Your individual timeline may be shorter or longer depending Flow Models on your own circumstances. Additionally, the timing of your events may occur earlier or later in the agency sale process. The following steps in the agency sale process may be completed throughout the process and at different times during the process: Consult with an attorney, tax advisor, and other outside resources I Obtain information regarding the book of business serviced by the agency, I including requested agent policies Review agency reports and information to help you determine the agency value I 19
  • 20. Securities offered through Allstate Financial Services, LLC (LSA Securities in LA and PA). Registered Broker-Dealer. Member NASD, SIPC. Main Office: 2920 South 84th Street, Lincoln, NE 68506. 877-525-5727. ©2005 Allstate Insurance Company. Allstate is an Equal Opportunity Company R27326