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- 1. Choose your owndirection Building a business as an Allstate Exclusive Agent R27434-2
- 2. Building a Business As an Building a Business As an Allstate Exclusive Agent The following overview highlights the R3001 Agency opportunity.* Agency owners are independent contractors and are not employees of Allstate. Multiple factors are independent contractors and are not employees of Allstate. Multiple factors contribute to the success of an Allstate Agency. As such, individual results will vary. All information, including bonus, revenue, compensation, and education information is subject to change. See the R3001 Exclusive Agency Agreement, the Exclusive Agency Independent Contractor Manual, the Exclusive Agency Independent Contractor Reference Guide, the Supplement for the R3001 Agreement, and the Allstate Agency Standards for full details. details * Excludes New Jersey 2
- 3. Allstate – Our Shared Vision Our Purpose We are the Good Hands: We help people realize their hopes and dreams through We are the Good Hands: We help people realize their hopes and dreams through products and services designed to protect them from life’s uncertainties and to prepare them for the future. Strategic Vision To reinvent protection and retirement for the consumer. Our Values Honesty, caring and integrity Inclusive diversity I l i di i Engagement Accountability Superior performance Superior performance Corporate Goal We will grow the value of our company for our customers, our associates, our shareholders, our communities and society. shareholders our communities and society 3
- 4. Join an Industry Leader ENJOY THE BENEFITS OF WORKING WITH ALLSTATE Allstate provides you with support that is among the best in the industry p y pp g y High brand‐name recognition A comprehensive education program Unlimited money making potential Unlimited money‐making potential Ownership of the economic interest in the book of business your agency writes Customer Information Center (CIC) provides after hours support for your agency One of the largest teams of centralized claims professionals in the country with 24 x 7 One of the largest teams of centralized claims professionals in the country with 24 x 7 support Marketing materials designed to help you generate revenue for your agency A customizable company website to help drive clients to you A customizable company website to help drive clients to you An exciting awards and recognition program that rewards you for achieving business objectives established by Allstate Support from Allstate s field sales leadership group Support from Allstate’s field sales leadership group Potential to own multiple locations 4
- 5. Getting Started WHAT YOU NEED TO SUCCEED AT ALLSTATE Requirements Available start‐up capital to meet cash flow market requirement (minimum $50,000) A il bl i l h fl k i ( i i $50 000) P&C and Life/Health licenses Financial Industry Regulatory Authority (FINRA) Series 6 license (and Series 63 license if required by state law), which will need to be obtained within a certain time after agency appointment Characteristics Networks proactively et o s p oact e y Projects persuasive and professional presence Makes quality decisions Drives for results and profitability Focuses on relationship building Focuses on relationship building Supports the Allstate vision and purpose Creates strategic business solutions Adapts to changing conditions Works effectively Works effectively Leads and motivates staff 5
- 6. Navigating Your Business Options DECIDE HOW TO RUN YOUR BUSINESS With the option of purchasing an existing Allstate Agency, you have the advantage of buying a business that s already up and running. There are different bonus and incentive buying a business that’s already up and running There are different bonus and incentive opportunities available depending on whether the agency has less than 750 policies/$800,000 premium or more than 750 policies/$800,000 premium. Becoming an Allstate Exclusive Agent… Starting a Purchasing an new agency agency from an from scratch existing Allstate g Exclusive Agent Less than 750 L th More than 750 M th policies/$800,000 policies/$800,000 6
- 7. Evaluating Your Business Options CONSIDERATIONS AS YOU EVALUATE THE OPPORTUNITY TO BUY AN EXISTING ALLSTATE AGENCY What is the business environment? What are the financial results of the agency? Is the agency an efficiently operated business? Do I have sufficient liquid capital to invest in growing the business? Will I be able to secure financing if needed to purchase the book of business? Will agency staff be retained after the purchase? What is the value of the agency? Wh i h l f h ? What staffing issues exist? Will the existing location be maintained after the agency purchase? What factors may affect the retention of customers in the book of business? Wh t f t ff t th t ti f t i th b k f b i ? What legal issues should be considered? What is the market opportunity to grow the business? Will you retain the existing technology after purchasing? Will you retain the existing technology after purchasing? 7
- 8. OTHER BUSINESS CONSIDERATIONS DECIDE HOW TO RUN YOUR BUSINESS Understand your location options Maintain existing location Establish a new location Relocate an existing agency Branding your agency Develop your business plan Operating Staffing Business Processes Marketing Demographics Lead Generation Advertising Financial Cash Flow Projections Cash Flow Projections Production goals and expenses 8
- 9. Branding Your Business YOUR AGENCY’S IMAGE First impressions count and that goes for your office space as well. The Allstate Branded Retail Environment (BRE) ensures that, as customers drive by or walk up ( ) and enter your agency, they’ll feel confident that they’ve come to the right place for their insurance needs. The look helps promote a positive customer experience and create a positive, inviting work environment. and create a positive, inviting work environment. To view all options and pricing, please visit the BRE Website at www.brandyouragency.com 9
- 10. Education and Support ALLSTATE PROVIDES EDUCATION TO HELP YOU GET AHEAD Allstate provides an education program on Allstate’s products, recommended sales techniques and processes sales techniques and processes Program is approximately 5 weeks Education is conducted regionally and at Allstate’s National Sales Education Center (NSEC) Program includes Auto, Property, Financial and Run the Business track which is P i l d A t P t Fi i l d R th B i t k hi h i designed to help with the set up and operational side of your agency Once you have Successfully completed the Education Program, you will receive a $3,000 bonus payable in first month of the R3001 Agreement ONGOING CONSULTATIVE SUPPORT FROM A FIELD SALES LEADER Sales and marketing processes Results review R l i Ongoing education Business results consultation 10
- 11. Commissions Structure P&C COMMISSIONS SCALE Commission Amount by Line* New % Subsequent renewal % Auto, Standard 10 10 Motorcycle 10 10 Off road Vehicle 10 10 Auto, Non‐Standard 8 8 Personal Property 10 10 Boat 10 10 Landlord Package g 10 10 Manufactured Home 10 10 Personal Umbrella Policy 10 10 Condo and Renters 10 10 Commercial, Nonfleet 10 10 Commercial Casualty ‐ Fleet 10 10 Commercial Casualty – all Other First $2,500 First $2 500 20 10 Over $2,500 12 10 * Excludes state exceptions 11
- 12. Allstate Financial Opportunity ALLSTATE LIFE AND FINANCIAL PRODUCTS Our extensive portfolio includes term and permanent life, annuities and variable products Allstate offers the opportunity to write Life and Financial Products by either: Partnering with an Exclusive Financial Specialist (EFS)*, a specialist in life, savings and financial products ( Shared Business) financial products (“Shared” Business). Write life and financial products on your own (“Solo” business) Ability to earn credit towards production goals, bonuses and awards Allstate Financial enhanced commission scales are based on your productivity – the more you write, the higher the commission scale *known as Financial Specialists in NY 12
- 13. Resources for Growth – Established Agencies RESOURCES FOR GROWTH IS DESIGNED TO REWARD AGENCIES THAT ACHIEVE BALANCED PERFORMANCE Agency performance is measured on five key business objectives: Retention, Acquisition, Profitability, Allstate Financial Production Credit and Agency Loyalty Index Agency results are matched to goals established for each measurement category and points are earned based on those results (based on 10.5 point scale) Retention results are based on Standard Auto Retention % i l b d S d d i % Acquisition results are based on a combination of Personal Auto New Issued Items and Emerging Business New Issued Items Profitability results are the better of total casualty 12MM or 24MM adjusted paid loss ratio Allstate Financial Production Credit results are based on total YTD Production Credit (reduction for not meeting Expected Results) Agency Loyalty Index results are based on the annual Agency Loyalty Index score Points are distributed across six Resources for Growth tiers Platinum (7.5 – 10.5 points) Gold (6.0 – 7.4 points) G ld (6 0 7 4 i t ) Silver (5.5 – 5.9 points) Bronze (2.5 – 5.4 points) Standard (0.1 – 2.4 points) ( p Base (0 points or less)) Resources for Growth tiers will be used across multiple programs including the Agency Bonus, Awards and Recognition, Expected Results, and qualification for other business opportunities 13 *Start-up agencies have a different measurement – see page 25
- 14. Benefits For High Performance GROWING A PROFITABLE AGENCY WITH HIGH LEVELS OF CUSTOMER LOYALTY AND SATISFACTION Executive Advantage Brings together additional resources that can help brand, grow and manage your business. Centralizes many resources agencies use today to market and manage their businesses into one Intranet‐based Gateway site called the Executive Advantage Resource Center Premier Service Agency High value web leads from www.Allstate.com Priority placement on the Agency Locator PSA Logo placed on the agency website Executive Advantage boost Customer Focused Acquisition Customer Focused Acquisition Enables small/medium‐sized agencies to purchase economic interest in a small book of business and consolidate it with their existing book Designed to help high‐performing trajectory agencies achieve scale towards the ideal agency model by providing inorganic growth opportunities d lb idi i i h ii 14
- 15. Awards and Recognition AS AN EXCLUSIVE AGENT, YOU’LL HAVE THE OPPORTUNITY TO QUALIFY FOR ALLSTATE’S EXCITING AWARDS AND RECOGNITION EVENTS Regional Honor Ring Banquet Hosted by the FVP and AFVP ‐ Additional details will be shared with you by your region President’s Conference Company‐wide conference trip with spouse or guest Company wide conference trip with spouse or guest Chairman’s Conference Company‐wide conference trip with spouse or guest Chairman’s Inner Circle Add‐on trip to Chairman’s Conference with spouse or guest Leaders Forum Business meeting for top agency owners to network, share a wealth of ideas and learn from the “best of the best” Short‐term/local promotions may be available throughout the year 15
- 16. Key Events Review Step 1 Step 2 Step 3 Step 4 Program Review P R i Program Requirements P R i Agency Sale Process A S l P Final Steps Fi l S • After buyer has identified • Take the Agent Selection • Negotiate and finalize the • Complete the Education an agency for sale and Questionnaire (ASQ) terms of the sale with the Program started preliminary sale • Pass the background seller • Complete the assignment discussions, buyer should discussions buyer should screening • Make financing Make financing of commissions paperwork of commissions paperwork meet with a Field Sales • Find an agency location arrangements, if necessary if applicable Leader (FSL). FSL will and get approval from FSL • Make arrangements for • Provide the region with provide an overview of the furniture, equipment, and proof of Errors and EA Program and buyer • Complete the capital requirements worksheet requirements worksheet supplies, if necessary pp , y Omissions insurance and requirements Worker’s Compensation • Review the EA Agreement • Complete a business plan insurance, as well as direct and Supplement, EA • Obtain licenses and sign deposit forms Manual and Reference the Letter of Understanding Guide g for securities licensing • Review the Cash Flow • After successfully Models completing the previous steps, buyer and seller will receive preliminary approval to continue with l h the sale process 16
- 17. Start‐Up Agencies – Additional Incentives INCENTIVES FOR START‐UP AGENCIES • Agency Establishment Bonus Agency Establishment Bonus • Agency Development Bonus I • Agency Development Bonus II • Agency Performance Profile Agency Bonus f fl • Branded Retail Environment • Agency Choice Technology (ACT) Allowance 17
- 18. Tier Structure for Incentive Compensation USE OF TIERS Four tiers based on P&C performance in relation to your cash flow Four tiers based on P&C performance in relation to your cash flow Tier 1: at least 225% of your baseline cash flow Tier 2: 150% to 224% of your baseline cash flow Tier 3: 90% to 149% of your baseline cash flow Tier 4: <90% of your baseline cash flow Tiers are determined monthly 18
- 19. Agency Establishment Bonus AGENCY ESTABLISHMENT BONUS Bonus payout is based on your tier p y y Your tier will be based on your cumulative production in months 1 – 3 relative to your baseline cash flow for months 1 – 3 Tier 1: $10,000 Ti 1 $10 000 Tier 2: $7,500 Tier 3: $5,000 Tier 4: $0 Tier 4: $0 Agency Establishment Bonus will be paid in month 4 of affiliation 19
- 20. Validation Requirements VALIDATION REQUIREMENTS Two production requirements (one for Property & Casualty P&C, and one for Two production requirements (one for Property & Casualty – P&C, and one for Allstate Financial – AF) need to be achieved within the first 6 months of agency affiliation The P&C requirement is derived from your baseline cash flow – The minimum P&C requirement is 90% of the baseline cash flow (Tier 3 level) The minimum P&C requirement is 90% of the baseline cash flow (Tier 3 level) The Allstate Financial requirement is $5,000 or more in Allstate Financial production credit Additional validation will occur at month 12 of affiliation dd l ld ll h f ff l The minimum P&C requirement is 90% of the baseline cash flow (Tier 3 level) All validation requirements are conditions of the agency owner relationship. Failure All validation requirements are conditions of the agency owner relationship. Failure to meet the validation requirements will lead to termination of the Agency Agreement. 20
- 21. Agency Development Bonus I AGENCY DEVELOPMENT BONUS I (ADB I) ADB I is eligible to be earned in production months 1 ‐ 36* g p ADB I is eligible to be received/paid in months 2 – 37* of affiliation Based on your tier for a given month, a bonus rate (see next slide) will be applied to your current month’s net new P&C written premium to determine a bonus See next slide for bonus rates by tier and month S lid f b b i d h * ADB I will also be paid in months 38-49 for any month you achieve Tier 1 status during months 37-48; ADB I will also be paid in months 38-43 for any month you achieve Tier 2 status during months 37-42 21
- 22. Agency Development Bonus I, Continued AGENCY DEVELOPMENT BONUS I (ADB I) SCHEDULE 22
- 23. Agency Development Bonus II AGENCY DEVELOPMENT BONUS II (ADB II) ADB II is eligible to be earned in production months 2 ‐ 37* ADB II is eligible to be received/paid in months 4 – 39* of affiliation Based on your performance tier for a given month, a dollar amount (see next slide) will be applied to your current month s P&C Policy in Force (PIF) Used for slide) will be applied to your current month’s P&C Policy in Force (PIF) Used for Bonus figure – special rules apply when this figure is negative See next slide for dollar amounts by tier and month * ADB II will also be paid in months 40-51 of affiliation for any month that Tier 1 status is achieved in production months 38 -49: ADB II will also be paid in months 40 – 45 of affiliation for any month that tier 2 is achieved in production months 38 - 43 23
- 24. Agency Development Bonus II, Continued AGENCY DEVELOPMENT BONUS II (ADB II) SCHEDULE 24
- 25. Resources for Growth – Start‐up Agencies RESOURCES FOR GROWTH IS DESIGNED TO REWARD AGENCIES THAT ACHIEVE BALANCED PERFORMANCE Agency performance is measured on four key business objectives: Retention, Acquisition, Allstate Financial Production Credit and Agency Loyalty Index Agency results are matched to goals established for each measurement category and points are earned based on those results (based on 10.5 point scale) Retention results are based on Standard Auto Retention % Acquisition results are based on a combination of Personal Auto New Issued Items and Emerging Business New Issued Items Allstate Financial Production Credit results are based on total YTD Production Credit (reduction for not meeting p Expected Results)) Agency Loyalty Index results are based on the annual Agency Loyalty Index score Points are distributed across six Resources for Growth tiers Platinum (7.5 – 10.5 points) Gold (6.0 – 7.4 points) Silver (5.5 – 5.9 points) Bronze (2.5 – 5.4 points) Standard (0.1 – 2.4 points) Base (0 points or less) Resources for Growth tiers will be used across multiple programs including the Agency Bonus, Awards and Resources for Growth tiers will be used across multiple programs including the Agency Bonus Awards and Recognition, Expected Results, and qualification for other business opportunities 25
- 26. Agency Performance Profile Agency Bonus AGENCY PERFORMANCE PROFILE AGENCY BONUS Agency Bonus for agency owners with 36 months or less of affiliation is determined by performance on the Agency Performance Profile measurement system Calculated as a % of total P&C written premium Annual bonus, with the bonus period running from January through December of Annual bonus with the bonus period running from January through December of calendar year Bonus is paid after the end of the calendar year Agency Performance Profile measurement system for agency owners with 36 Agency Performance Profile measurement system for agency owners with 36 months or less of affiliation who are eligible for Start‐up Agency incentive compensation is built on three independent measurement categories: Retention Policy growth over cash flow policy growth goal and Emerging Business new issued items Allstate Financial production credit 26
- 27. Allstate Support YELLOW PAGES AND CO‐OP Yellow Pages: First year of advertising in the Yellow Pages will be paid by Allstate (approximately $2,500) only when placed through Berry Network Co‐op: Receive up to 50% reimbursement for company‐approved advertising Receive up to 50% reimbursement for company‐approved advertising expenses per year (up to $4,500 for first‐year Start‐up Agencies); actual Co‐op allowance may vary by agent * In the states of Illinois, Alaska, and Hawaii, the non-cash award is valued at a different amount 27
- 28. Allstate Support, Continued BRANDED RETAIL ENVIRONMENT (BRE) Design your office to leverage the strength of the Allstate brand and to help enhance your customer’s experience Includes furniture, lighting, signage, sales displays and choice of either a beacon sign or reception desk In order to receive a $3,300* non‐cash award, you must participate in the BRE In order to receive a $3 300* non cash award you must participate in the BRE Welcome Suite Plus Package program AGENCY CHOICE TECHNOLOGY (ACT) ( ) ACT: Provides you flexibility to lease/purchase technology (within Allstate’s specifications) that meets your unique needs You select the technology vendor for installation and support; you may use any You select the technology vendor for installation and support; you may use any vendor of your choice. 28
- 29. Receive Support from Allstate TO HELP YOU MEET BUSINESS OBJECTIVES, YOU’LL HAVE SUPPORT FROM A FIELD SALES LEADER Sales and marketing processes Results review Ongoing education Ongoing education Business Results Consultation 29
- 30. This overview is confidential and proprietary information which is the exclusive property of Allstate Insurance Company and its affiliates, and subsidiaries, including Allstate Life Insurance Company (the “Company”), and may not be disclosed to third parties, other than outside advisors or as required by law, without first having obtained written permission from Allstate Insurance Company. Securities offered through Allstate Financial Services, LLC (LSA Securities in LA and PA). g ( ) Registered Broker‐Dealer. Member FINRA, SIPC. Main Office: 2920 South 84th Street, Lincoln, NE 68506. 877‐525‐5727. Commission and bonus amounts are subject to change. Allstate is an Equal Opportunity Company. For more information, contact Allstate toll‐free at 877‐258‐9012, or visit allstateagent.com. ©2010 Allstate Insurance Company. allstate.com R27434-2