A Message from our PresidentWhen I write my president’s letter, I always try to pen an uplifting message so readers will walk away with a good feeling. I will begin this message in much the same way, but later, I’ll talk about an issue troubling an increasing number of agency owners, insurance departments and consumer advocates.
Let me start, however, on a positive note by talking about NAPAA’s regional forums. Our most recent event was held in Atlanta on March 5. Prior to that, a forum was held in Dallas. We expect to host at least two more this year. We are currently discussing venues for these events and will keep you informed about the date and location of these meetings. Hopefully, we will choose a site that will make it convenient for you to attend.
I am excited about these events. They give the NAPAA Board of Directors an opportunity to listen to your concerns, while fostering agent camaraderie, something that so many agents seek. I hope you will join us if we come to a location near you.
Inaugural National Advisory Council Meeting
On January 29, NAPAA hosted its inaugural meeting of the National Advisory Council. The council is comprised of six active agents who hail from different regions of the country. My original plan was to create two or more of these councils in order to keep each group a manageable size. I like the composition of this first group. They are sensible, thoughtful agents, and they are sincere about making Allstate a better place for agents and customers. I came away thinking that we may not need a second group after all.
Our focus is on “bigger picture” issues, not individual grievances. While their identities are confidential, I can tell you that the group consists of two females and four males. They came to the meeting well prepared with an impressive list of topics for the council to consider and attempt to resolve.
Here are some of the matters brought before the group:
- Technology usage policy
- IPS quota increase in 2016
- House and Home, which appears to be less competitive and more complicated than previous policies offered by Allstate
- Allstate’s Price Optimization rate plan (Complimentary Group Rating)
- Technology problems with Alliance, eAgent, Connexus and integration
As you can see, we had plenty of things to discuss. We will revisit most of these topics this month when we meet again. Our goal is to attempt to find practical solutions for at least some of these issues that, if left unresolved, are certain to spawn friction and mistrust between agents and management.
Complimentary Group Rating Issues
One of the more controversial items on the list is Price Optimization, a topic that we first wrote about in the summer 2014 edition of Exclusivefocus magazine (pages 42-44). Since then, it has become a hot topic with industry leaders, consumer groups and insurance regulators. The Consumer Federation of America (CFA) produced a searing report that cast Allstate as one of the villains involved in this complex scheme.
Three states – California, Ohio and Maryland – have already notified insurers that the use of Price Optimization, which Allstate calls Complimentary Group Rating (CGR), to sert rates is discriminatory and violates state law. As CGR is rolled out to other states, agents are certain to face customer questions and complaints over the “loyalty penalty,” wherein insurance companies take advantage of loyal customers by charging them higher rates because they are less likely to shop for better rates.
I have met many agency owners and LSPs over the years and all of them value their long-term customers, mainly because they are the glue that holds agencies together. They pay their premiums year after year and require little service. Rather than gouging them with higher premiums and driving them away, they should be cherished and be the beneficiary of lower rates.
In its present form, Complementary Group Rating appears to be a lose-lose proposition for the company, for the agency force and for loyal Allstate customers. Personally, this strategy really sticks in my craw. It could easily turn into a brand-damaging public relations nightmare that costs agents significant PIF losses. Let’s hope the company changes course.