From the January 9, 2012 issue of National Underwriter Property & Casualty • Subscribe!

Allstate Reduces Planned Cut to Agent Commissions

Allstate says it will not cut agents’ base commissions as deeply as it originally announced, but the head of an agents’ group says the rank-and-file is still not pleased with the company’s move.

In a letter to Allstate agents obtained by NU, Mark LaNeve, Allstate’s senior executive vice president/agency operations and chief marketing officer, says the company will not cut base commissions to 8 percent, but rather only one percentage point to 9 percent beginning in 2013.

The current commission of 10 percent on new and renewal policies remains in place next year as the company begins its “transition to the variable component” to better allow agents to adjust over “the next several years” and develop a long-term strategy for the future.

Allstate confirmed the commission-schedule change, saying it has worked with more than 300 agency owners on the compensation structure.

Jim Fish, executive director of the National Association of Professional Allstate Agents, which represents 10-12 percent of Allstate agents, says the change in commission schedule comes after the company learned through a survey of the agents’ displeasure in the cut to 8 percent that amounted to a 20 percent cut in actual commission dollars.

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