Allstate's game plan for independent agents

Rough Notes, May 2000 by Pillsbury, Dennis

Last October, Allstate acquired CNA Personal Insurance, which represents $2 billion in personal lines premium and relationships with over 4,000 independent agents. Ernest A. Lausier, president of Independent Agency Markets, said the acquisition coincided with Allstate's overall growth strategy to be a multi-brand, multi-channel company.

"Allstate really did its homework in researching the way consumers buy insurance," Lausier says. "While there are many who appreciate working with Allstate agents, there is another large segment that really values the independence and the choices that independent agents can provide."

Importance of independent agents

Through IA Markets, a new autonomous business focused exclusively on customers who buy through an independent agent, Allstate will reach a completely new group of consumers, representing onethird of the personal lines insurance market and $45 billion in premium, Lausier says.

Prior to the acquisition, CNA PI had demonstrated success with its leading package product, its highly valued claims service and state-of the-art upload. The real value of the CNA PI franchise, though, was its agency relationships, best expressed in the PACER agent council, which provides a regular forum for the exchange of ideas with CNA PI leadership.

As a market leader, Allstate brought a well-known set of strengths to the transaction: capital strength as well as personal lines leadership and expertise.

IA Markets expects to transform the independent agency business by using the strengths of both companies and focusing exclusively on independent agents and their customers. "We can avoid the conflicts and compromises that burden most companies that are trying to serve too a many different markets," says Lausier. "We will be able to focus on developing the best solutions for independent agents in a dramatically changing world."

IA Markets intends to be the market leader and the company of choice for independent agents. That work began when Lausier took the helm of CNA PI in 1997. "As a company, we went from being the least automated to winning ACORD's Most Improved and Company of the Year awards," says Lausier. "We significantly expanded our customer reach through Bering. In other words, we delivered. I understand that our agents are looking at this transaction the same way-they will judge us on our execution."

And the new IA Markets is hard at work to deliver. "We are making a major investment in a leading edge Internet-based technology to create new capability that reduces costs and improves customer service," says Lausier. "Our technology vision centers on a true `once and done' experience, delivering policy service capability via the Internet at the click of a mouse. By providing real time underwriting decisions, edits and rates, our agents can be confident in the final rate and company acceptance at the point of sale."

IA Markets characterizes this vision as the "One Contact Experience" to provide the ultimate in customer experience. "It means that if you are dealing with customers, whether they are new clients or existing ones, you will be able to interface directly with our systems, via the Web, to obtain accurate information on a timely basis," says Lausier. These Webbased tools will bridge to agency management systems and comparative raters to support current agent workflows.

But the bottom line is to take agents out of the transaction service business and enable them to serve as trusted advisors to their customers. "We are making the investments to take time, cost and errors out of the process and put the independent agent in a better position to solve his/her customer's insurance problems and to acquire new customers."

IA Markets' commitment to technology underscores a change in the independent agency environment. "We understand that technology has become so important to an agent's success in the marketplace that it has really become 'product'."

While the new platform is being developed, CNA PI has provided a state-of-the-art Internet solution for agents to transact business through CNA Exchange. Currently, agents are uploading 50% of new business and 25% of eligible endorsements. Through CNA Exchange, agents gain efficiencies now while becoming accustomed to what will be our future-a browserbased platform.

"However, this utilization didn't happen overnight," says Lausier. "We developed agent technology specialists to work with agents in their offices to help them fully utilize our technology. In addition, we have retooled our sales specialists into more automation-- savvy resources for agencies. We also have help desks and online training materials to support our agents. Our agents understand that by using CNA Exchange today, they will be able to move easily to our new platform. It's like making a Windows upgrade."

Lausier continues: "The new platform is just one of our priorities for 2000. We will improve our bottomline profitability, integrate into Allstate or "unplug" from CNA, add product as well as enrich our topselling Universal Security Policy (USP) and deepen our agency and employee relationships."