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Choose your own direction Choose your own direction Building a business as an Allstate Exclusive Agent Building a business as an Allstate Exclusive Agent R27434-2

The Allstate Agency Opportuntiy

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Page 1: The Allstate Agency Opportuntiy

Choose your own directionChoose your own directionBuilding a business as an Allstate Exclusive AgentBuilding a business as an Allstate Exclusive Agent

R27434-2

Page 2: The Allstate Agency Opportuntiy

Building a Business As anBuilding a Business As an Allstate Exclusive Agent

The following overview highlights the R3001 Agency opportunity.* Agency owners are independent contractors and are not employees of Allstate. Multiple factorsare independent contractors and are not employees of Allstate.  Multiple factors contribute to the success of an Allstate Agency.  As such, individual results will vary. All information, including bonus, revenue, compensation, and education information is subject to change.

See the R3001 Exclusive Agency Agreement, the Exclusive Agency Independent Contractor Manual, the Exclusive Agency Independent Contractor Reference Guide, the Supplement for the R3001 Agreement, and the Allstate Agency Standards for full detailsdetails.  

* Excludes New Jersey

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Page 3: The Allstate Agency Opportuntiy

Allstate – Our Shared Vision

Our Purpose

We are the Good Hands: We help people realize their hopes and dreams throughWe are the Good Hands:  We help people realize their hopes and dreams through products and services designed to protect them from life’s uncertainties and to prepare them for the future.

Strategic VisionTo reinvent protection and retirement for the consumer.

Our ValuesHonesty, caring and integrityI l i di iInclusive diversityEngagementAccountabilitySuperior performanceSuperior performance

Corporate Goal

We will grow the value of our company for our customers, our associates, our shareholders our communities and societyshareholders, our communities and society.

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Page 4: The Allstate Agency Opportuntiy

Join an Industry Leader

ENJOY THE BENEFITS OF WORKING WITH ALLSTATE

Allstate provides you with support that is among the best in the industryp y pp g y

High brand‐name recognition

A comprehensive education program

Unlimited money‐making potentialUnlimited money making potential

Ownership of the economic interest in the book of business your agency writes

Customer Information Center (CIC) provides after hours support for your agency

One of the largest teams of centralized claims professionals in the country with 24 x 7One of the largest teams of centralized claims professionals in the country with 24 x 7 support

Marketing materials designed to help you generate revenue for your agency

A customizable company website to help drive clients to youA customizable company website to help drive clients to you

An exciting awards and recognition program that rewards you for achieving business objectives established by Allstate

Support from Allstate’s field sales leadership groupSupport from Allstate s field sales leadership group

Potential to own multiple locations

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Page 5: The Allstate Agency Opportuntiy

Getting Started

WHAT YOU NEED TO SUCCEED AT ALLSTATE

RequirementsA il bl i l h fl k i ( i i $50 000)Available start‐up capital to meet cash flow market requirement (minimum $50,000)P&C and Life/Health licensesFinancial Industry Regulatory Authority (FINRA) Series 6 license (and Series 63 license if required by state law), which will need to be obtained within a certain time after agency appointment

Characteristics Networks proactivelyet o s p oact e yProjects persuasive and professional presenceMakes quality decisionsDrives for results and profitabilityFocuses on relationship buildingFocuses on relationship buildingSupports the Allstate vision and purposeCreates strategic business solutionsAdapts to changing conditionsWorks effectivelyWorks effectivelyLeads and motivates staff

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Page 6: The Allstate Agency Opportuntiy

Navigating Your Business Options

DECIDE HOW TO RUN YOUR BUSINESS

With the option of purchasing an existing Allstate Agency, you have the advantage of buying a business that’s already up and running There are different bonus and incentivebuying a business that s already up and running.  There are different bonus and incentive opportunities available depending on whether the agency has less than 750 policies/$800,000 premium or more than 750 policies/$800,000 premium.

Becoming an Allstate Exclusive Agent…

Starting a new agency from scratch

Purchasing an agency from an existing Allstate gExclusive Agent

L th 750 M th 750

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Less than 750 policies/$800,000

More than 750 policies/$800,000

Page 7: The Allstate Agency Opportuntiy

Evaluating Your Business Options

CONSIDERATIONS AS YOU EVALUATE THE OPPORTUNITY TO BUY AN EXISTING ALLSTATE AGENCY

What is the business environment?What are the financial results of the agency?Is the agency an efficiently operated business?Do I have sufficient liquid capital to invest in growing the business?Will I be able to secure financing if needed to purchase the book of business?Will agency staff be retained after the purchase?Wh i h l f h ?What is the value of the agency?What staffing issues exist?Will the existing location be maintained after the agency purchase?Wh t f t ff t th t ti f t i th b k f b i ?What factors may affect the retention of customers in the book of business?What legal issues should be considered?What is the market opportunity to grow the business?Will you retain the existing technology after purchasing?Will you retain the existing technology after purchasing?

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Page 8: The Allstate Agency Opportuntiy

OTHER BUSINESS CONSIDERATIONS

DECIDE HOW TO RUN YOUR BUSINESS

Understand your location optionsMaintain existing locationEstablish a new locationRelocate an existing agencyBranding your agency

Develop your business planOperating

StaffingStaffingBusiness Processes

MarketingDemographicsLead GenerationAdvertising

FinancialCash Flow ProjectionsCash Flow ProjectionsProduction goals and expenses

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Page 9: The Allstate Agency Opportuntiy

Branding Your Business 

YOUR AGENCY’S IMAGE

First impressions count and that goes for your office space as well.  The Allstate ( )Branded Retail Environment (BRE) ensures that, as customers drive by or walk up 

and enter your agency, they’ll feel confident that they’ve come to the right place for their insurance needs. The look helps promote a positive customer experience and create a positive, inviting work environment.and create a positive, inviting work environment.To view all options and pricing, please visit the BRE Website at www.brandyouragency.com

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Page 10: The Allstate Agency Opportuntiy

Education and Support

ALLSTATE PROVIDES EDUCATION TO HELP YOU GET AHEADAllstate provides an education program on Allstate’s products, recommended sales techniques and processessales techniques and processes 

Program is approximately 5 weeksEducation is conducted regionally and at Allstate’s National Sales Education Center (NSEC) P i l d A t P t Fi i l d R th B i t k hi h iProgram includes Auto, Property, Financial and Run the Business track which is  designed to help with the set up and operational side of your agency

Once you have Successfully completed the Education Program, you will receive a $3,000 bonus payable in first month of the R3001 Agreement

ONGOING CONSULTATIVE SUPPORT FROM A FIELD SALES LEADERSales and marketing processesR l iResults reviewOngoing educationBusiness results consultation

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Page 11: The Allstate Agency Opportuntiy

Commissions Structure

P&C COMMISSIONS SCALECommission Amount by Line* New % Subsequent 

renewal %

Auto, Standard 10 10

Motorcycle 10 10

Off road Vehicle 10 10

Auto, Non‐Standard 8 8

Personal Property 10 10

Boat 10 10

Landlord Package 10 10g

Manufactured Home 10 10

Personal Umbrella Policy 10 10

Condo and Renters 10 10

Commercial, Nonfleet 10 10

Commercial Casualty ‐ Fleet 10 10

Commercial Casualty – all Other

First $2 500 20 10

* Excludes state exceptions

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First $2,500 20 10

Over $2,500 12 10

Page 12: The Allstate Agency Opportuntiy

Allstate Financial Opportunity

ALLSTATE LIFE AND FINANCIAL PRODUCTS

Our extensive portfolio includes term and permanent life, annuities and variable productsAllstate offers the opportunity to write Life and Financial Products by either:

Partnering with an Exclusive Financial Specialist (EFS)*, a specialist in life, savings and financial products (“Shared” Business)financial products ( Shared  Business). Write life and financial products on your own (“Solo” business)

Ability to earn credit towards production goals, bonuses and awardsAllstate Financial enhanced commission scales are based on your productivity – the more you write, the higher the commission scale

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*known as Financial Specialists in NY

Page 13: The Allstate Agency Opportuntiy

Resources for Growth – Established Agencies 

RESOURCES FOR GROWTH IS DESIGNED TO REWARD AGENCIES THAT ACHIEVE BALANCED PERFORMANCE

Agency performance is measured on five key business objectives: Retention, Acquisition, Profitability, Allstate Financial Production Credit and Agency Loyalty Index

Agency results are matched to goals established for each measurement category and points are earned based on those results (based on 10.5 point scale)

i l b d S d d i %Retention results are based on Standard Auto Retention % 

Acquisition results are based on a combination of Personal Auto New Issued Items and Emerging Business New Issued Items 

Profitability results are the better of total casualty 12MM or 24MM adjusted paid loss ratio

Allstate Financial Production Credit results are based on total YTD Production Credit (reduction for not meeting Expected Results)

Agency Loyalty Index results are based on the annual Agency Loyalty Index score 

Points are distributed across six Resources for Growth tiersPlatinum (7.5 – 10.5 points)

G ld (6 0 7 4 i t )Gold (6.0 – 7.4 points)

Silver (5.5 – 5.9 points)

Bronze (2.5 – 5.4 points)

Standard (0.1 – 2.4 points)

Base (0 points or less)

*Start-up agencies have a different measurement – see page 25

( p )

Resources for Growth tiers will be used across multiple programs including the Agency Bonus, Awards and Recognition, Expected Results, and qualification for other business opportunities 

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Page 14: The Allstate Agency Opportuntiy

Benefits For High Performance

GROWING A PROFITABLE AGENCY WITH HIGH LEVELS OF CUSTOMER LOYALTY AND SATISFACTION

Executive Advantage Brings together additional resources that can help brand, grow and manage your business. Centralizes many resources agencies use today to market and manage their businesses into one Intranet‐based Gateway site called the Executive Advantage Resource Center

Premier Service AgencyHigh value web leads from www.Allstate.comPriority placement on the Agency LocatorPSA Logo placed on the agency websiteExecutive Advantage boost

Customer Focused AcquisitionCustomer Focused AcquisitionEnables small/medium‐sized agencies to purchase economic interest in a small book of business and consolidate it with their existing bookDesigned to help high‐performing trajectory agencies achieve scale towards the ideal 

d l b idi i i h i iagency model by providing inorganic growth opportunities

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Page 15: The Allstate Agency Opportuntiy

Awards and Recognition

AS AN EXCLUSIVE AGENT, YOU’LL HAVE THE OPPORTUNITY TO QUALIFY FOR ALLSTATE’S EXCITING AWARDS AND RECOGNITION EVENTS

Regional Honor Ring BanquetHosted by the FVP and AFVP ‐ Additional details will be shared with you by your region

President’s ConferenceCompany wide conference trip with spouse or guestCompany‐wide conference trip with spouse or guest

Chairman’s ConferenceCompany‐wide conference trip with spouse or guest

Chairman’s Inner CircleAdd‐on trip to Chairman’s Conference with spouse or guest

Leaders ForumBusiness meeting for top agency owners to network, share a wealth of ideas and learn from the “best of the best”

Short‐term/local promotions may be available throughout the year

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Page 16: The Allstate Agency Opportuntiy

Key Events Review 

Step 1 Step 2 Step 3 Step 4

P R i P R i A S l P Fi l SProgram Review

• After buyer has identified an agency for sale and started preliminary sale discussions buyer should

Program Requirements

• Take the Agent Selection Questionnaire (ASQ) 

• Pass the background screening

Agency Sale Process

• Negotiate and finalize the terms of the sale with the seller

• Make financing

Final Steps

• Complete the Education Program

• Complete the assignment of commissions paperworkdiscussions, buyer should 

meet with a Field Sales Leader (FSL).  FSL will provide an overview of the EA Program and buyer 

screening

• Find an agency location and get approval from FSL

• Complete the capital requirements worksheet

• Make financing arrangements, if necessary

• Make arrangements for furniture, equipment, and supplies, if necessary

of commissions paperwork if applicable

• Provide the region with proof of Errors and Omissions insurance and 

requirements

• Review the EA Agreement and Supplement, EA Manual and Reference Guide

requirements worksheet

• Complete a business plan

• Obtain licenses and sign the Letter of Understanding for securities licensing

pp , yWorker’s Compensation insurance, as well as direct deposit forms

Guide

• Review the Cash Flow Models

g

• After successfully completing the previous steps, buyer and seller will receive preliminary 

l h

16

approval to continue with the sale process

Page 17: The Allstate Agency Opportuntiy

Start‐Up Agencies – Additional Incentives

INCENTIVES FOR START‐UP AGENCIES

• Agency Establishment Bonus• Agency Establishment Bonus

• Agency Development Bonus I

• Agency Development Bonus II

f f l• Agency Performance Profile Agency Bonus

• Branded Retail Environment

• Agency Choice Technology (ACT) Allowance

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Page 18: The Allstate Agency Opportuntiy

Tier Structure for Incentive Compensation

USE OF TIERS

Four tiers based on P&C performance in relation to your cash flowFour tiers based on P&C performance in relation to your cash flow Tier 1: at least 225% of your baseline cash flow

Tier 2: 150% to 224% of your baseline cash flow

Tier 3: 90% to 149% of your baseline cash flow

Tier 4: <90% of your baseline cash flow

Tiers are determined monthly

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Page 19: The Allstate Agency Opportuntiy

Agency Establishment Bonus

AGENCY ESTABLISHMENT BONUS

Bonus payout is based on your tierp y y

Your tier will be based on your cumulative production in months 1 – 3 relative to your baseline cash flow for months 1 – 3

Ti 1 $10 000Tier 1: $10,000Tier 2: $7,500Tier 3: $5,000Tier 4: $0Tier 4: $0

Agency Establishment Bonus will be paid in month 4 of affiliation

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Page 20: The Allstate Agency Opportuntiy

Validation Requirements

VALIDATION REQUIREMENTS

Two production requirements (one for Property & Casualty – P&C, and one forTwo production requirements (one for Property & Casualty  P&C, and one for Allstate Financial – AF) need to be achieved within the first 6 months of agency affiliation

The P&C requirement is derived from your baseline cash flowThe minimum P&C requirement is 90% of the baseline cash flow (Tier 3 level)– The minimum P&C requirement is 90% of the baseline cash flow (Tier 3 level)

The Allstate Financial requirement is $5,000 or more in Allstate Financial production credit

dd l l d ll h f ff lAdditional validation will occur at month 12 of affiliationThe minimum P&C requirement is 90% of the baseline cash flow (Tier 3 level)

All validation requirements are conditions of the agency owner relationship. FailureAll validation requirements are conditions of the agency owner relationship. Failure to meet the validation requirements will lead to termination of the Agency Agreement.

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Page 21: The Allstate Agency Opportuntiy

Agency Development Bonus I

AGENCY DEVELOPMENT BONUS I (ADB I)

ADB I is eligible to be earned in production months 1 ‐ 36*g pADB I is eligible to be received/paid in months 2 – 37* of affiliationBased on your tier for a given month, a bonus rate (see next slide) will be applied to your current month’s net new P&C written premium to determine a bonusS lid f b b i d hSee next slide for bonus rates by tier and month

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* ADB I will also be paid in months 38-49 for any month you achieve Tier 1 status during months 37-48; ADB I will also be paid in months 38-43 for any month you achieve Tier 2 status during months 37-42

Page 22: The Allstate Agency Opportuntiy

Agency Development Bonus I, Continued

AGENCY DEVELOPMENT BONUS I (ADB I) SCHEDULE

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Page 23: The Allstate Agency Opportuntiy

Agency Development Bonus II

AGENCY DEVELOPMENT BONUS II (ADB II)

ADB II is eligible to be earned in production months 2 ‐ 37*ADB II is eligible to be received/paid in months 4 – 39* of affiliationBased on your performance tier for a given month, a dollar amount (see next slide) will be applied to your current month’s P&C Policy in Force (PIF) Used forslide) will be applied to your current month s P&C Policy in Force (PIF) Used for Bonus figure – special rules apply when this figure is negative See next slide for dollar amounts by tier and month

23

* ADB II will also be paid in months 40-51 of affiliation for any month that Tier 1 status is achieved in production months 38 -49: ADB II will also be paid in months 40 – 45 of affiliation for any month that tier 2 is achieved in production months 38 - 43

Page 24: The Allstate Agency Opportuntiy

Agency Development Bonus II, Continued

AGENCY DEVELOPMENT BONUS II (ADB II) SCHEDULE

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Page 25: The Allstate Agency Opportuntiy

Resources for Growth – Start‐up Agencies

RESOURCES FOR GROWTH IS DESIGNED TO REWARD AGENCIES THAT ACHIEVE BALANCED PERFORMANCE

Agency performance is measured on four key business objectives: Retention, Acquisition, Allstate Financial Production Credit and Agency Loyalty Index

Agency results are matched to goals established for each measurement category and points are earned based on those results (based on 10.5 point scale)

Retention results are based on Standard Auto Retention % 

Acquisition results are based on a combination of Personal Auto New Issued Items and Emerging Business New Issued Items 

Allstate Financial Production Credit results are based on total YTD Production Credit (reduction for not meeting Expected Results)p )

Agency Loyalty Index results are based on the annual Agency Loyalty Index score 

Points are distributed across six Resources for Growth tiersPlatinum (7.5 – 10.5 points)

Gold (6.0 – 7.4 points)

Silver (5.5 – 5.9 points)

Bronze (2.5 – 5.4 points)

Standard (0.1 – 2.4 points)

Base (0 points or less)

Resources for Growth tiers will be used across multiple programs including the Agency Bonus Awards andResources for Growth tiers will be used across multiple programs including the Agency Bonus, Awards and Recognition, Expected Results, and qualification for other business opportunities 

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Page 26: The Allstate Agency Opportuntiy

Agency Performance Profile Agency Bonus

AGENCY PERFORMANCE PROFILE AGENCY BONUS

Agency Bonus for agency owners with 36 months or less of affiliation is determined by performance on the Agency Performance Profile measurement system

Calculated as a % of total P&C written premiumAnnual bonus with the bonus period running from January through December ofAnnual bonus, with the bonus period running from January through December of calendar yearBonus is paid after the end of the calendar year

Agency Performance Profile measurement system for agency owners with 36Agency Performance Profile measurement system for agency owners with 36 months or less of affiliation who are eligible for Start‐up Agency incentive compensation is built on three independent measurement categories:

RetentionPolicy growth over cash flow policy growth goal and Emerging Business new issued itemsAllstate Financial production credit

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Page 27: The Allstate Agency Opportuntiy

Allstate Support 

YELLOW PAGES AND CO‐OP

Yellow Pages: First year of advertising in the Yellow Pages will be paid by Allstate (approximately $2,500) only when placed through Berry Network

Co‐op: Receive up to 50% reimbursement for company‐approved advertisingCo‐op: Receive up to 50% reimbursement for company‐approved advertising expenses per year (up to $4,500 for first‐year Start‐up Agencies); actual Co‐op allowance may vary by agent

27* In the states of Illinois, Alaska, and Hawaii, the non-cash award is valued at a different amount

Page 28: The Allstate Agency Opportuntiy

Allstate Support, Continued 

BRANDED RETAIL ENVIRONMENT (BRE)

Design your office to leverage the strength of the Allstate brand and to help enhance your customer’s experienceIncludes furniture, lighting, signage, sales displays and choice of either a beacon sign or reception deskIn order to receive a $3 300* non cash award you must participate in the BREIn order to receive a $3,300* non‐cash award, you must participate in the BRE Welcome Suite Plus Package program

AGENCY CHOICE TECHNOLOGY (ACT)( )

ACT: Provides you flexibility to lease/purchase technology (within Allstate’s specifications) that meets your unique needsYou select the technology vendor for installation and support; you may use anyYou select the technology vendor for installation and support; you may use any vendor of your choice.

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Receive Support from Allstate 

TO HELP YOU MEET BUSINESS OBJECTIVES, YOU’LL HAVE SUPPORT FROM A FIELD SALES LEADER

Sales and marketing processesResults reviewOngoing educationOngoing educationBusiness Results Consultation

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Page 30: The Allstate Agency Opportuntiy

This overview is confidential and proprietary information which is the exclusive property of Allstate Insurance Company and its affiliates, and subsidiaries, including Allstate Life Insurance Company (the “Company”), and may not be disclosed to third parties, other than outside advisors or as required by law, without first having obtained written permission from Allstate Insurance Company.  

Securities offered through Allstate Financial Services, LLC (LSA Securities in LA and PA). g ( )Registered Broker‐Dealer.  Member FINRA, SIPC.  Main Office: 2920 South 84th Street, Lincoln, NE 68506.  877‐525‐5727.  

Commission and bonus amounts are subject to change.Allstate is an Equal Opportunity Company.

For more information, contact Allstate toll‐free at 877‐258‐9012, or visit allstateagent.com.

©2010 Allstate Insurance Company.  allstate.com 

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