It takes a lot of hard work to own a business in today’s world. Competition is fierce. You must rely on quality products, excellent customer service, and consistent value to even have a chance for success. Then you must provide authentic care and compassion while juggling the best interests of your clientele.
For those working in the world of insurance, failure happens more often than success. If your business starts today, then there is a 70% chance that you’ll be out of business a decade from now. That is the reality of being an agency owner. Allstate wants to start telling a different story with their ownership opportunities.
You’ll still encounter the pitfalls of life as an insurance agent when you’re an Allstate agency owner. If you expect too much too soon, then success becomes difficult to achieve. Some agents put in 20 to 30 years of work before they reach their definition of success, but it looks like they achieved it overnight. You must focus on your training and the people you serve instead of the money you earn.
Owning an Allstate agency means you’re in the relationship business. It is a people business. If you miss that, then success is challenging to find. If you’re thinking about this opportunity as a career option today, then here are the pros and cons to consider.
List of the Pros of Owning an Allstate Agency
1. There are no franchise fees to pay when you own an Allstate agency.
Unlike other national brands, Allstate does not charge business owners a franchise fee when they join the company’s family. There are no royalty fees charged for your sales activities either. That’s because the organization sees you as more than just an agent. They want you to own a real economic interest in your business because that’s how they believe success is generated. You are always given room to grow when you’re accepted in their educational programs and mentorship opportunities.
2. You gain ongoing income through the renewals of each policy.
You earn more than the initial commission of an insurance policy when you own an Allstate agency. You’re also earning with the renewals that come from each customer. The commission rate is the same for each renewal or sale too, which gives you an incentive to maintain relationships with each customer. The commission structures offered by the brand are very competitive, with productive incentives and recognition bonuses structured into the package.
If you’re good at what you do when working for Allstate, you’ll earn a competitive annual salary that will help you create a comfortable life for you and your family. About 10% of agency owners currently earn $500,000 or more in gross revenues each year.
3. There are no caps on the amount you can earn with Allstate.
Allstate doesn’t cap your income level if you’re an agency owner. They remove the ceiling completely to ensure you have room to grow. There are no caps on what you can earn when you own an Allstate agency. As the company puts it, “the sky’s the limit for your bottom line.” Considering you’re working with a brand that is recognized by almost 70% of Americans, your new business will benefit from 80+ years of history and support to establish a positive reputation in your community right away.
4. You have access to several A-List advantages when working with Allstate.
Starting an Allstate agency means you’re trying to build a future instead of trying to find some short-term success. There is plenty of profit potential available to you when you’re an owner with this brand. The portfolio doesn’t box you in like other insurance agencies, allowing you to sell life, home, auto, and commercial insurance products. You can write policies for life, education, or retirement savings too.
There are several A-List advantages you’ll receive if you decide to pursue becoming an Allstate agency owner.
• You have access to a base commission at all times.
• You receive a constant stream of revenue from renewal commissions each year.
• There are start-up bonuses available, along with annual ones to earn.
• There are opportunities to own more than one location.
You then get to network with other agency owners at forums, attend trips and events around the world, or qualify for other perks and rewards through what you do.
5. The average salary of an Allstate agency owner is high.
If you research average salaries for Allstate agency owners online, then you’ll find a wide range of figures to think about. Career Bliss reports that the average salary is $63,000 per year. Zip Recruiter says you can expect to earn about $69,000 per year in this role. LinkedIn reports the average salary of their 34 members who have shared data with the platform is $100,000 per year.
PayScale reports the lowest median at $58,000 per year. Indeed reports the highest average at $145,000 annually. You must earn commissions to generate this salary, so no work equates to no pay. Anyone who stays active, however, should have the ability to earn a comfortable wage with this business opportunity.
6. There are ongoing benefits provided to Allstate agency owners.
You’re never on your own when you become an approved Allstate agency owner. You’ll receive ongoing education and support for your entire staff, with hands-on opportunities for productivity, sales, and marketing best practices. Local consultants provide one-on-one support to help your business grow. Claims professionals are available around-the-clock to help your customers access the resources they need. There are also multimillion-dollar advertising campaigns, customizable local advertising, and approved materials that help you to promote your local brand.
7. Allstate offers help to brand your agency.
When you work with Allstate as an agency owner, then they’ll offer several ways to help brand your office too. They help with your signage, the interior design of your office, and even offer furnishing advice to ensure the customer experience you offer is the best it can be. The brand seeks consistency within its owners, even if no franchise fee is paid, allowing customers to expect a professional experience with any agency owner, no matter where they happen to be.
8. You don’t need previous insurance experience to become an agency owner.
Allstate does not require its agency owners to have experience in the insurance industry to attend their education program. You’ll learn everything you need to know about this opportunity through their training course. The brand does recommend that anyone who is interested in this opportunity to look at www.aiadc.org for more information about what to expect when working in this field.
List of the Cons of Owning an Allstate Agency
1. You’re going to need some capital to get started.
The capital requirements of owning an Allstate agency go beyond the franchising factors. You have the building requirements to think about, zoning issues to consider, and customer acquisition costs to look at. On the lower end of the scale, you might be able to start your own agency for around $50,000, especially if you already own a suitable property. If you need real estate, office equipment, licensing, and legal support, you could be looking at anywhere from $100,000 to over $1 million to get this opportunity off the ground.
2. You must attend the Allstate Education Program.
You can begin as an independent insurance agency, selling products from a variety of providers, but that structure won’t help you form an Allstate Agency. You must apply to their education program as the first step of this process. All agents who wish to pursue this opportunity must attend the Allstate Education Program, which lasts from five to eight weeks. You’ll receive agency education, classroom learning opportunities, and information about sales best practices within the organization.
Once you pass this program, you’ll be asked to become an exclusive independent contractor for the agency. You’ll still get to run your own business if approved for this opportunity, but it does come with branded support.
3. You must have money in savings under most circumstances.
You must have at least $25,000 in the bank before Allstate will consider allowing you to operate an insurance business under their brand. Some agents may have a $50,000 (or more) stipulation because of the cost of living in their region. You cannot open an agency if you don’t have enough money in your savings account to cover costs as you begin building your business from scratch.
Allstate also requires that you spend a minimum of $100,000 on the growth of your business as you join the brand.
You must also pass a comprehensive series of background checks before a franchise is awarded. You’ll go through credit and criminal checks. If you’re unable to pass either one, then Allstate will not contract with you to begin this business opportunity.
4. You will work on commission only.
When you enroll in the Allstate Education Program, there is the possibility of earning a small salary while you go through the course. You would then be working on commission only once your business is approved by the brand. Although that means you can earn to your full potential, the competition in the insurance industry is fierce. There will be times when you’re struggling to earn a paycheck, then there are times when it seems like you’re flooded with cash. You must budget well to ensure you can pay your bills during the bad times with money from the good times.
5. There is no guarantee that you’ll be accepted to the program.
The competition for a new Allstate agency is so tough that 5 out of 6 people who apply for their education program are not accepted. Some sessions have higher acceptance rates because there are fewer candidates. If you want to avoid this issue altogether, then you must purchase an existing Allstate insurance agency instead. You can find the current agencies for sale by going to the brand’s sales page, then use the drop-down menu under resources to select your sate. This command will show you every agency for sale within your region, along with the email address of the owner.
6. The pay structure changes frequently when you’re an Allstate agency owner.
When you start earning a salary as an Allstate agency owner, it feels good. If you hit your sales objectives right away, then the bonuses you earn are very nice. The problem with this is that you never really know what the pay structure will be from one year to the next. Quarterly changes happen sometimes too. If you’ve invested your life savings into this opportunity, then it’s not something you can just abandon. You’re at the mercy of what the national company decides is the best course of action.
You might get to own equity in your own business as an Allstate agency owner, but it is a brand relationship which is closer to an employer-employee model. You are asked to “pay to play,” then become stuck to the mercies of the people who oversee your presence.
7. There are restrictions in selling your business through Allstate.
Your business is scalable when working with Allstate as an agency owner. You can own multiple locations if your qualifications are strong. You’ll also find that when it is time to get out of the business, the equity you’ve built is challenging to liquidate. You’re subject to the Allstate Agency Agreement at all times when trying to retire or sell. You can pass it along to a family member or find a buyer, but most end up selling it back to Allstate at a fraction of the value their equity provides.
Allstate does not usually allow mergers, even if other agency owners are interested in the book you’ve put up for sale. They want more storefronts, not less, and the idea of someone purchasing an income stream goes against policies.
8. You must hold an insurance license to be an Allstate agency owner.
You cannot sell insurance in the United States if you do not hold a valid license. Individuals looking at an agency ownership opportunity can explore it without being licensed first. Allstate does help you through the process to receive your certifications, but it is something you must achieve and renew. Each state offers a different fee schedule. First-time licenses in Washington State are $60 for a producer with full lines, $25 for limited lines, or $55 for an adjuster. It’s $205 to be a surplus line broker and $100 to become a life settlement broker.
9. You don’t receive full commissions on seed policies.
When a current Allstate agency owner decides to sell their book to the company for TPP, the existing policies are either reassigned to other offices or seeded to a start-up agency. It takes 5 years for these policies to begin paying a full commission to those who are working them. Combine that issue with an emphasis on securing more renewals by paying higher bonuses and that makes it difficult for scratch businesses to earn a comfortable living. It takes almost 10 years of being in business to begin earning a six-figure salary for the average agency owner.
10. You’re at the mercy of your local and territorial managers.
The overall success of any business depends upon the lifelines available to it. Although there is a toll-free number given to agency owners for support, the brand has sometimes tracked the number of calls to it from each location. That means you’re left to the experience, wisdom, and passion of your local and territorial manager. Many agency owners complain online about how the people in these roles seem disinterested in helping, with some not even knowing how the policy-writing system works. That causes discouragement, which ends up forcing a lot of potentially good agents out of their business before it gets the chance to thrive.
11. The salary figures published by Allstate exclude a lot of information.
The top 10% of Allstate agents earned $543,000 or more during 2015. The majority of agent owners earned at least $151,000, with the average topping out at $357,000. If you read the small print, however, the figures exclude every exclusive agent that works in New Jersey, along with any agency owners who have less than 13 months of affiliate with the brand.
These pros and cons of owning an Allstate agency show that the salary available to you is very high. If you’re willing to follow the rules and “play along to get along,” then you’ll find this opportunity to be one that is highly lucrative. There are investment challenges to consider, location issues to look at, and you’ll always face the uncertainty of not having any customers come along. That is the life of insurance sales. You either love it or hate it.
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