Some Insight On Captive Agencies

loudmouth · Post by **loudmouth** » Tue Feb 22, 2005 11:01 pm

I'm a little confused regarding captive insurance companies like allstate, framers, state farm, ...etc. I've been in the business for about a year as an independent and always thought these guys required that all business be submitted with them. However, I've seen numerous agencies that work with AllState and also have appointments with numerous other insurers. How does this work. If I could be an allstate agency and also do business with other insurers I think this may be a way to go while obtaining critical insiders knowledge of insurance business.

If anyone is an allstate agency I'd love to talk to you about how this works and any conflicts you may have had with AllState when it comes to renewal or writing of business with other insurers.

Please PM me with contact phone or email. I prefer to talk to you so please provide phone number if you can.

Thanks

Sundance · Post by **Sundance** » Wed Feb 23, 2005 1:29 pm

Allstate doesn't offer that type of contract (per se) or we would all have tried tha gammit somwhere along the way. The agencies that do have the "dual" agreement are typically rural agents and were (are) the only game in town. The other thing is that like so many have done...they do a "back door" set up, meaning the Allstate agent maybe be the husband and the wife own an independent.

BettyAllstate · Post by **BettyAllstate** » Wed Feb 23, 2005 2:09 pm

Here's the deal...
Allstate Exclusives are exclusive-- no other appointments (other then the ones the company provides). The other agencies ... Yea it has happened that wives were part/whole owners of an independent across the street which is sad for those of us that play fair... I guess I am not truly unbias my blood is blue...

loudmouth · Post by **loudmouth** » Wed Feb 23, 2005 10:56 pm

These are not just mom and pop agencies that represent AllState and other insurers. The agencies I'm talking about are fairly large with 3-5 offices and a large number of employees. I can see where if it was a husband/wife office one can be IA and the othe represent AllState but in a large agency how can that be?

I know there must be some of you who represent AllState or Framers and also have appointment with other insurers. Please shed some light on the subject.

BettyAllstate · Post by **BettyAllstate** » Thu Feb 24, 2005 7:03 am

My guess is that those larger agencies have been in the business for quite sometime and years ago Allstate was offering the IA contract to qualified canidates, that has gone away. Like Sundance said the only way is the rural route.... and sometimes those IA's are large firms-- say in New Hampshire / Maine /VT. Those practices have 4-5 locations throughout the states. Other then that perhaps you can purchase an IA that already has the appointment ?

InsuranceAdvice · Post by **InsuranceAdvice** » Thu Feb 24, 2005 1:16 pm

The scoop on Allstate appointments in independent agencies: Back about 20 years ago Allstsate had a program to offer appointments to independent agencies in more 'rural' areas that the company felt were not large enough areas to support a dedicated Allstate agent. The about 10 years ago, Allstate, in its effort to expand its reach started offering appointments to select larger, urban independent agencies, even if there were exclusive Allstate agents nearby. On a regional basis, VP's approved the appointments and I believe there were some limitations on how much an Allstate appointed independent could advertise.

I think I read where Allstate has stopped the practice of these kinds of appointments, and now depends on Encompass (the old CNA personal lines) to distribute through independent agencies, but I don't think any of the former Allstate appointees were stripped of their ability to sell and service the products unless there were premium size or loss issues.

Newer Allstate appointees, or those who never saw such an appointment would not be aware such things went on, but they did and still exist.

kevinraz · Post by **kevinraz** » Fri Feb 25, 2005 8:26 am

I used to be a Farmers agent and I can tell you how things used to work with them.

Farmers had the right of first refusal for all of my business. If they were willing to quote I had to use their product. If they declined or were not a market I could approach other carriers. Quite a few Farmers agents had appointments with other carriers to handle substandard auto & other lines that Farmers would not write.

The bottom line was that I only pursued Farmers target business & avoided anything else.

As Farmers has opened up into several eastern seaboard states in the last 5-7 years they have appointed some independent agents, however I believe that in the Midwest and Western parts of the USA they are still only working with captives.

okt0ber · Post by **okt0ber** » Fri Feb 25, 2005 2:28 pm

Allstate is also allowed to broker for commercial policies. I write policies through Hartford, Zurich, Colony, etc. through Northeast Agencies, an MGA that Allstate and American National agencies are appointed to.

YoungGun · Post by **YoungGun** » Mon Mar 07, 2005 2:58 pm

Loudmouth,

Check out this months edition of "Rough Notes" Magazine. Farmers is looking to grow it's IA force by 2000 agents on the east coarst in the next 18 months. Big article, on the aquisition of Formost insurance company and the relationship some IA's have with that company will help them in getting appointed with Farmers.

Hope this helps...