State Farm is sensing blood in the water as rival Allstate Corp. sees upheaval in its agent ranks. Allstate has been reportedly expected to reduce its number of agents by as much as a fifth by 2013 if they don’t meet certain goals. But State Farm believes that now’s the time to start targeting customers of Allstate agents who have been or could be terminated, reports The Chicago Tribune.
“These Allstate office closings provide State Farm agents a unique opportunity to reach out to Allstate customers,” according to an internal State Farm document obtained by the Tribune. “These Allstate customers will be experiencing a disruptive event that could lead them to shop their insurance.”
The memo said State Farm is offering agents near Allstate office closings “50 percent co-op” reimbursement on certain print, radio and billboard ads appealing to prospective customers who like being represented by an agent.
State Farm, for example, will pay half the cost of certain approved ads. So if a State Farm agent near an affected Allstate agency spends $1,000 in approved advertising, State Farm will reimburse them $500 of the expense.
“Who can blame State Farm or any other insurer for taking advantage of Allstate’s misstep?” said Jim Fish, executive director of the National Association of Professional Allstate Agents.
He said State Farm’s move is occurring as Allstate seems to be reconsidering the cuts. In recent months Allstate has announced plans to seek new agency owners in numerous states, including staffing for more than 290 offices in Oklahoma, Nevada, Texas, Missouri, Colorado.
“The problem is that they have alienated the agency force and are frantically trying to stem the bleeding by attempting to hire replacement agents for those who are departing,” Fish told the paper.
RBR-TVBR observation: Might be a good time to reach out to State Farm corporate and State Farm agents in your market(s). Sounds like corporate might be striking soon, as the iron is hot. With 50% co-op in the offing, it may just move the needle for many agents.