ALLSTATE the Darker Side 2010 Condensed

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E

xclusive

_f

_ocus

Summer 2010Summer 2010

An Official Publication of the National Association of Professional Allstate Agents, Inc.

Is Allstate Really

the Best?

page 18 page 18

From Good Hands to

Boxing Gloves

– Two

Agent Reviews of the

Controversial Book

page 41 page 41

Allstate’s Hidden

Agenda

page 44page 44

The Comprehensive

Recreational Activity

Policy – Allstate’s

Secret Weapon to

Becoming #1?

page 22 page 22

State Farm

Exploits Allstate

Agent Terminations

page 14

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E

xclusive

_focus

An Official Publication of the National Association of

Professional Allstate Agents, Inc.

A Magazine for Allstate Agency Owners and Allstate

Personal Financial Representatives

Summer 2010 Summer 2010

BUSINESS

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FEATURES

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Are Are We We Really Really the the Best?Best?

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BY THE THE “ANDY “ANDY ROONEY” ROONEY” OF OF NAPAANAPAA

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Can Can “ALI” be “ALI” be an an Agent’s Agent’s Best Best Friend?Friend?

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An Open An Open Letter tLetter to Joe o Joe Richardson Richardson from a from a California California AgentAgent

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Selling Selling your your Agency?Agency?

Consider Advisors Who Understand the Allstate Process Consider Advisors Who Understand the Allstate Process

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An An Extraordinary Extraordinary EventEvent

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BOOK BOOK REVIEW: REVIEW: ““From Good Hands to Boxing Gloves:From Good Hands to Boxing Gloves: The Dark Side of Insurance

The Dark Side of Insurance ””

44

Allstate’s Allstate’s Hidden Hidden AgendaAgenda

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Review Number 1

T

Trial rial attorney attorney David David Berardinelli’sBerardinelli’s book,

book, From Good Hands to Boxing Gloves From Good Hands to Boxing Gloves ,, tells about a side of the Allstate business tells about a side of the Allstate business plan that company management would plan that company management would prefer to keep secret. Starting with a prefer to keep secret. Starting with a recap of an accident involving Jose and recap of an accident involving Jose and Olivia Pincheira, Berardinelli progresses Olivia Pincheira, Berardinelli progresses to Allstate’s handling of their claim and to Allstate’s handling of their claim and

details how his experience as their trial details how his experience as their trial lawyer leads to uncovering a business lawyer leads to uncovering a business practice that, in his words, is “The dark practice that, in his words, is “The dark side of insurance.”

side of insurance.” After

After BerardinBerardinelli elli quickly quickly relates relates thethe facts of the Pincheiras’ accident, he facts of the Pincheiras’ accident, he in-troduces us to McKinsey and Company, troduces us to McKinsey and Company, a high profile consulting firm hired by a high profile consulting firm hired by Allsta

Allstate te in in 1992, 1992, ostensiostensibly bly to to help help re- re-design the company’s core business plan design the company’s core business plan with

with special special emphasemphasis is on on claims claims han- han-dling. Berardinelli spends the rest of the dling. Berardinelli spends the rest of the book describing McKinsey’s new claim book describing McKinsey’s new claim process, designed speciﬁcally for Allstate. process, designed speciﬁcally for Allstate. McKinsey calls it “Claims Core Process McKinsey calls it “Claims Core Process Redesign,” or CCPR. It has since become Redesign,” or CCPR. It has since become Allsta

Allstate’te’s s standarstandard d for for claims processing.claims processing. Accordi

According ng to to BerardinBerardinelli, elli, the the CCPR CCPR planplan

book review

“From Good Hands to Boxing Gloves:

The Dark Side

The Dark Side of Insurance”

of Insurance”

In this issue of Exclusivefocus magazine, we are presenting two In this issue of Exclusivefocus magazine, we are presenting two reviews of this controversial book about Allstate. The following reviews of this controversial book about Allstate. The following reviews were independently written by two active Allstate agents reviews were independently written by two active Allstate agents who do not know each other’s identities. Both of them wish to who do not know each other’s identities. Both of them wish to re-main anonymous.

main anonymous.

would p

would provide rovide AllstaAllstate wite with recth record prord proﬁtsoﬁts while,

while, at at the the same same time, time, deny deny financialfinancial benefits to its policyholders. Berardinelli benefits to its policyholders. Berardinelli further likens the McKinsey philosophy, further likens the McKinsey philosophy, which

which he he says says has has become become benchmarbenchmarkk for the Allstate corporate philosophy, to for the Allstate corporate philosophy, to W

Wall Street’s Gordon Gekkoall Street’s Gordon Gekko’s claim that’s claim that “Greed is good.”

“Greed is good.”

During the ﬁrst few chapters, I initially During the ﬁrst few chapters, I initially found myself railing against Berardinelli’s found myself railing against Berardinelli’s supposition that Allstate was purposefully supposition that Allstate was purposefully and maliciously denying the Pincheiras’ and maliciously denying the Pincheiras’ claim. After

claim. After all, being a good “Allstaterall, being a good “Allstater,” I,” I was na

was naturally turally going going to coto come to me to the cothe corpo- rpo-ration’s defense. Not knowing the explicit ration’s defense. Not knowing the explicit facts of the case, and instead relying on facts of the case, and instead relying on the summary Berardinelli presented, it the summary Berardinelli presented, it seemed highly unlikely Allstate would seemed highly unlikely Allstate would en-gage in a process which not only involved gage in a process which not only involved an Allstate agent’s purported lies, but the an Allstate agent’s purported lies, but the use of a then-secret formula for use of a then-secret formula for defraud-ing Allstate’s own clients. As impatient ing Allstate’s own clients. As impatient as I was to quickly dismiss this book as as I was to quickly dismiss this book as a sour grapes retribution for running his a sour grapes retribution for running his client through the “mill,” Berardinelli client through the “mill,” Berardinelli pa-tiently tells a story that, in the end, makes tiently tells a story that, in the end, makes a compelling case.

a compelling case.

It was breathtaking to read about the It was breathtaking to read about the depth and breadth the company went depth and breadth the company went through in order to manipulate and, in through in order to manipulate and, in essence, “invent” a new way to process essence, “invent” a new way to process claims. Previously implemented in claims. Previously implemented in oth-er industries, the McKinsey “Greed is er industries, the McKinsey “Greed is Good” philosophy successfully merged Good” philosophy successfully merged Allstate’s

Allstate’s pursuit pursuit for for ever-increasingever-increasing profits at any cost with the new CCPR profits at any cost with the new CCPR claims process. Berardinelli goes on to claims process. Berardinelli goes on to say that when used as the new standard, say that when used as the new standard, CCPR relegates insurance customers to CCPR relegates insurance customers to nuisance status and treats them as an nuisance status and treats them as an impediment to profits rather than the impediment to profits rather than the fi-nancial focal point they deserve to be. nancial focal point they deserve to be.

In Chapter nine, Berardinelli In Chapter nine, Berardinelli repro-duces a slide from McKinsey’s February duces a slide from McKinsey’s February 16, 1994 presentation to Allstate. The 16, 1994 presentation to Allstate. The

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Review Number 2

“I do not believe maximizing profits for “I do not believe maximizing profits for the investors is the only acceptable the investors is the only acceptable justifica-tion for all corporate acjustifica-tions. The investors tion for all corporate actions. The investors are not the only people who matter. are not the only people who matter. Cor- porations

porations can can exist exist for for purposes purposes other other thanthan simply maximizing proﬁts.” John Mackey, simply maximizing proﬁts.” John Mackey, Whole Foods Market CEO

Whole Foods Market CEO

“The time is always right to do what is “The time is always right to do what is right.” ~Martin Luther King, Jr.

right.” ~Martin Luther King, Jr.

Sears - “Satisfaction Guaranteed or Sears - “Satisfaction Guaranteed or your

your money money back.” Allstate back.” Allstate - - “Y“You’ou’re re inin good hands.” Reputation. Integrity. good hands.” Reputation. Integrity. Do-ing the right thDo-ing. These are, or were, ing the right thing. These are, or were, the driving forces of business. Yet we as the driving forces of business. Yet we as agents, and especially long-term agents, agents, and especially long-term agents, who

who have have lived lived by by these these attribuattributes tes for for yearsyears have seen these same virtues disappear at have seen these same virtues disappear at Allstat

Allstate. e. WWe sense e sense it liit like we ke we sense a sense a stormstorm coming by the wind shifting in the trees. coming by the wind shifting in the trees. Something’s amiss in our corporation. Something’s amiss in our corporation. Just

Just who who is tis the he corporaticorporation’on’s cuss customer? tomer? AsAs agents, we know who our customer agents, we know who our customer is, butis, but who is

who is AllstatAllstate’s e’s customcustomer?er? In the must-read book

In the must-read book From GoodFrom Good Hands to Boxing Gloves: The Dark Side of Hands to Boxing Gloves: The Dark Side of Insurance

Insurance , attorney and author David J., attorney and author David J. Berardinelli exposes what agents know Berardinelli exposes what agents know all too well: the shareholder is Allstate’s all too well: the shareholder is Allstate’s customer and enhancing shareholder customer and enhancing shareholder return is its underlying operating return is its underlying operating prin-ciple. Mr. Berardinelli is a trial lawyer ciple. Mr. Berardinelli is a trial lawyer who

who worked worked to to become become the the first first personperson to obtain the now infamous “McKinsey to obtain the now infamous “McKinsey Documents.” The book talks about how Documents.” The book talks about how the documents “teach insurers to profit the documents “teach insurers to profit by denying or delaying claims,” and how by denying or delaying claims,” and how Allstate’s “

Allstate’s “Good Hands Good Hands ” treatment of its” treatment of its customers has been supplanted with a customers has been supplanted with a more aggressive and adversarial approach more aggressive and adversarial approach which, metaphorically speaking,

which, metaphorically speaking, requiresrequires the policyholder to don a pair of boxing the policyholder to don a pair of boxing gloves to spar with the company in order gloves to spar with the company in order to reach a fair c

to reach a fair claim settlement.laim settlement. As

As agents, agents, we we know know the the traditionaltraditional rules of insurance. Our customers believe rules of insurance. Our customers believe us when we tell them that their homes, us when we tell them that their homes, autos, property and their lives are in autos, property and their lives are in GoodGood Hands

Hands . We are the face and heartbeat of. We are the face and heartbeat of slide depicts a “Current Game” graph

slide depicts a “Current Game” graph showing gradually declining payouts showing gradually declining payouts of bodily injury claims over a 1250-day of bodily injury claims over a 1250-day period. The intent is to show that early period. The intent is to show that early in a claim’s history; BI payouts tend to in a claim’s history; BI payouts tend to be higher, followed by a tapering off be higher, followed by a tapering off and a gradual step-down effect until and a gradual step-down effect until most claims are settled by the end of the most claims are settled by the end of the 1250-day period. The same slide also 1250-day period. The same slide also depicts a graph entitled “New Game” in depicts a graph entitled “New Game” in which

which McKinsey McKinsey recommends recommends AllstateAllstate settle 90% of its claims in less than 180 settle 90% of its claims in less than 180 days, or the “Good Hands” segment, days, or the “Good Hands” segment, fol-lowed by a deliberate delay of about four lowed by a deliberate delay of about four more years to settle the remaining 10%. more years to settle the remaining 10%. McKinsey labels this segment “Boxing McKinsey labels this segment “Boxing Gloves.” Berardinelli estimates that by Gloves.” Berardinelli estimates that by giving customers the “Boxing Glove” giving customers the “Boxing Glove” treatment, Allstate can rack up billions treatment, Allstate can rack up billions in proﬁts through this new delay tactic. in proﬁts through this new delay tactic. According

According to to Berardinelli, Berardinelli, this this strategystrategy involves keeping clients away from involves keeping clients away from at-torneys, promising forthcoming fair torneys, promising forthcoming fair settlement offers, but not delivering, settlement offers, but not delivering, and exploiting policyholders’ ﬁnancial and exploiting policyholders’ ﬁnancial vulnerability

vulnerability by by making making lowball lowball initialinitial settlement offers.

settlement offers.

Berardinelli’s logical presentation in Berardinelli’s logical presentation in From Good Hands to Boxing Gloves From Good Hands to Boxing Gloves aligns aligns the Allstate philosophy with McKinsey the Allstate philosophy with McKinsey and Company’s credo of “Greed

and Company’s credo of “Greed is good.”is good.” It appears that encouraging Allstate’s It appears that encouraging Allstate’s pursuit of ﬁnancial gains at the expense pursuit of ﬁnancial gains at the expense of the very customers it purports to serve of the very customers it purports to serve is child’s play

is child’s play for McKinsey. Berardinellifor McKinsey. Berardinelli reminds us that lest we forget one of reminds us that lest we forget one of the biggest ﬁnancial scams of our time, the biggest ﬁnancial scams of our time, one would do well to remember Enron. one would do well to remember Enron. While

While the the Enron Enron name name is is synonymoussynonymous with greed and

with greed and corruption, it is corruption, it is McKin- McKin-sey that provided them with the sey that provided them with the neces-sary internal mechanics required to pull sary internal mechanics required to pull off their ascent to the

off their ascent to the top of Watop of Wall Street.ll Street. And while

And while Enron ultimatEnron ultimately took tely took the bighe big fall, McKinsey quietly slipped out the fall, McKinsey quietly slipped out the back door to pursue its next high-paying back door to pursue its next high-paying client.

client.

From Good Hands to Boxing Gloves From Good Hands to Boxing Gloves con- con-cisely chronicles Allstate’s connection to cisely chronicles Allstate’s connection to and its use of McKinsey and Company’s and its use of McKinsey and Company’s “Greed is good” philosophy. It deﬁnes “Greed is good” philosophy. It deﬁnes Allstate’s

Allstate’s current current direction, direction, which which maymay well

well serve serve to to dissuade dissuade new new clients clients fromfrom ever coming close to Allstate’s “ ever coming close to Allstate’s “GoodGood Hands

Hands ” for fear they may have to wear” for fear they may have to wear boxing gloves instead.

boxing gloves instead.

the insurance contract to our customers. the insurance contract to our customers. They pay their premiums and w

They pay their premiums and when theyhen they have a covered loss, they believe those have a covered loss, they believe those Good Hands

Good Hands will make them whole. Re- will make them whole. Re-place the home damaged by a hurricane, place the home damaged by a hurricane, tornado or ﬁre; reimburse them for tornado or ﬁre; reimburse them for med-ical expenses or horrible injuries from an ical expenses or horrible injuries from an auto accident, especially if caused by an auto accident, especially if caused by an uninsured motorist. The customer uninsured motorist. The customer natu-rally believes that Allstate will settle their rally believes that Allstate will settle their claim fairly and promptly and will keep claim fairly and promptly and will keep the policyholder’s best interests at the the policyholder’s best interests at the center of the process.

center of the process. According

According to to Berardinelli, Berardinelli, ““CasualtyCasualty insurance is indemnity coverage. It doesn’t insurance is indemnity coverage. It doesn’t pay

pay a a set set beneﬁt. beneﬁt. It It pays pays as as much much as as thethe policyholder

policyholder needs, up needs, up to to the policthe policy y limit limit toto restore an insured to the same ﬁnancial restore an insured to the same ﬁnancial posi-tion after the loss that he or she was in prior tion after the loss that he or she was in prior to the loss.

to the loss.””

I don’t know about you, but these days I don’t know about you, but these days I have a sense of dread and uncertainty I have a sense of dread and uncertainty every time a customer calls to report a every time a customer calls to report a claim. I never know what to expect claim. I never know what to expect any-more. After all, we know Allstate wants more. After all, we know Allstate wants to settle the claim as quickly as possible to settle the claim as quickly as possible for the least amount of money. My fear for the least amount of money. My fear is that Allstate will lowball the customer is that Allstate will lowball the customer with a “take it or

with a “take it or leave it” settlement of-leave it” settlement of-fer. And when this happens, the boxing fer. And when this happens, the boxing gloves come out and I get caught in the gloves come out and I get caught in the middle, trying to do the right thing for my middle, trying to do the right thing for my customer. Naturally, the company usually customer. Naturally, the company usually wins a

wins and I lose nd I lose another another customercustomer..

Allstate Hires McKinsey: 1992

First, a little background on McKinsey. First, a little background on McKinsey. They

They do ndo not ot solicit solicit clients. clients. Clients Clients have have toto seek them out, just as Enron did. So why seek them out, just as Enron did. So why did Allstate seek and then adopt did Allstate seek and then adopt McKin-sey’s business model and what motives did sey’s business model and what motives did senior executives at Allstate have?

senior executives at Allstate have? As you

As you may recall, in may recall, in 1992 Sears, 1992 Sears, try- try-ing to prop up its suffertry-ing retail ing to prop up its suffering retail busi-ness, decided to spin off Allstate, ness, decided to spin off Allstate, Cold- well

well Banker Banker and and Dean Dean Witter. Witter. Sears,Sears, of course, didn’t make the ofﬁcial of course, didn’t make the ofﬁcial an-nouncement of its plan until 1993, but nouncement of its plan until 1993, but some senior executives at Allstate seem some senior executives at Allstate seem to have been tipped off to the then-secret to have been tipped off to the then-secret restructuring plan.

restructuring plan.

Enter Ed Liddy

In 1992, Sears’ CFO

In 1992, Sears’ CFO was Ed Liddy. Justwas Ed Liddy. Just two years later he becomes president and two years later he becomes president and CEO of Allstate. Coincidence? While at CEO of Allstate. Coincidence? While at

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Sears, Liddy’s executive compensation Sears, Liddy’s executive compensation was m

was mostly in ostly in the form the form of Sears of Sears stock andstock and options, which were dependent on the options, which were dependent on the entire performance of four separate entire performance of four separate busi-nesses. All that changed when Allstate nesses. All that changed when Allstate was

was spun spun off off and and became became the the nation’nation’ss largest publicly traded personal lines largest publicly traded personal lines in-surance company. Thereafter, executive surance company. Thereafter, executive stock options would depend solely on stock options would depend solely on Allstate’s

Allstate’s ability ability to to increase increase net net proﬁtsproﬁts and build the value of Allstate stock. and build the value of Allstate stock.

McKinsey urged Allstate to align the McKinsey urged Allstate to align the in-terests of its employees and management terests of its employees and management with those of the shareholde

with those of the shareholder. Ar. Accordingccording to Berardinelli,

to Berardinelli, “Proof of McKinsey’s plan to“Proof of McKinsey’s plan to put

put shareshareholders ahead holders ahead of of policyholpolicyholders ders isnisn’t’t hard to find. Allstate’s 2005 Proxy hard to find. Allstate’s 2005 Proxy State-ment clearly spells out this plan: ‘Because we ment clearly spells out this plan: ‘Because we believe strongly in linking the interests of believe strongly in linking the interests of management with those of our shareholders, management with those of our shareholders, we first instituted stock ownership goals in we first instituted stock ownership goals in 1996 for executives at the vice president level 1996 for executives at the vice president level and above.’” Therefore, “Allstate CEOs are and above.’” Therefore, “Allstate CEOs are required to own company stock worth seven required to own company stock worth seven times their annual salary. Senior times their annual salary. Senior manage-ment executives are required to own stock ment executives are required to own stock worth four times their annual salary.” worth four times their annual salary.”

Y

You ou do do the the math. math. If If you you owned owned millionsmillions of Allstate shares whose interest would of Allstate shares whose interest would you protect?

you protect? Who Who would your would your customercustomer be, the policyholder or the shareholder? be, the policyholder or the shareholder? “At the time of his retirement on “At the time of his retirement on De-cember 31, 2006 Liddy owned almost 4 cember 31, 2006 Liddy owned almost 4 million shares of Allstate worth million shares of Allstate worth approxi-mately $250,000,000 at the market price mately $250,000,000 at the market price of $65.11”

of $65.11” But wait, there’s more! But wait, there’s more! “In all, “In all, Liddy’s move to Allstate in 1994 netted a Liddy’s move to Allstate in 1994 netted a PERSONAL FORTUNE of PERSONAL FORTUNE of approximate-ly $350 million upon retirement on ly $350 million upon retirement on Decem-ber 31, 2006 - much of

ber 31, 2006 - much of it due to McKinsey’sit due to McKinsey’s business model.”

business model.”

For Liddy and other executives, For Liddy and other executives, in-cluding current

cluding current president and CEO Tompresident and CEO Tom Wilson, it wa

Wilson, it was, and still s, and still is, a swis, a sweet, sweeteet, sweet deal indeed. For policyholders, it means deal indeed. For policyholders, it means excessive premiums combined with excessive premiums combined with re-duced claim payments. And it continues duced claim payments. And it continues to mean rate increase upon rate increase to mean rate increase upon rate increase for our

for our customers. No hard “talking path”customers. No hard “talking path” can explain away the obvious: Executive can explain away the obvious: Executive endorsed, expertly entrenched, endorsed, expertly entrenched, corpo-rate-sponsored greed.

rate-sponsored greed.

Mr. Berardinelli’s book reads like a Mr. Berardinelli’s book reads like a mur-der mystery in which he delves into the der mystery in which he delves into the whod

whodunit of unit of AllsAllstattate e and and McKiMcKinsey nsey likelike Sir Arthur Conan Doyle’s Sherlock Sir Arthur Conan Doyle’s Sherlock

Hol-mes. Among chapter titles and sub-titles: mes. Among chapter titles and sub-titles:

•

• Good Hands Good Hands or Boor Boxing Glovesxing Gloves •

• An An Alternative Alternative Explanation Explanation ofof Earnings

Earnings

• McKinsey and the Greed is Good • McKinsey and the Greed is Good Model

Model •

• McKinsey’s Solution McKinsey’s Solution to the to the AllstateAllstate Problem

Problem •

• Changing Changing Employee Employee BehaviorBehavior •

• We We get What get What we Measurewe Measure •

• Litigation Litigation as a as a tooltool • Colossus

• Colossus •

• Redeﬁning Redeﬁning the the GameGame

Eye-opening for agents will not be Eye-opening for agents will not be what

what Allstate’s Allstate’s culture culture is, is, as as we we experi- experi-ence this out of control beast on a daily ence this out of control beast on a daily basis. What will be eye-opening is the basis. What will be eye-opening is the “smoking gun” itself; the subpoenaed “smoking gun” itself; the subpoenaed McKinsey slides from the presentation in McKinsey slides from the presentation in which the proﬁtabi

which the profitability to be had - lity to be had - by ba-by ba-sically turning the claims process into an sically turning the claims process into an adversarial, litigious profit center – was adversarial, litigious profit center – was revealed. The “keep ‘em running, keep revealed. The “keep ‘em running, keep ‘em guessing” human resource policy that ‘em guessing” human resource policy that has affected agents and employees since has affected agents and employees since 1994, when most agents were

1994, when most agents were employees,employees, continues to fester as RFG for today’s continues to fester as RFG for today’s so-called ‘independent contractor’ so-called ‘independent contractor’ Ex-clusive Agents. As the McKinsey report clusive Agents. As the McKinsey report states:

states: “We get what we measure. The new “We get what we measure. The new measurement approach will be based on the measurement approach will be based on the processes

processes and and activities activities required required to to achieveachieve the desired outcomes (increasing proﬁts).” the desired outcomes (increasing proﬁts).” Does this sound a bit like Expected Does this sound a bit like Expected Re-sults or RFG?

sults or RFG? While th

While the mae main subjin subject of ect of MrMr. . Berardi- Berardi-nelli’s book deals with McKinsey and the nelli’s book deals with McKinsey and the claims paying process changes to increase claims paying process changes to increase profitability at Allstate using CCPR, it profitability at Allstate using CCPR, it isn’t a stretch at all for us to surmise that isn’t a stretch at all for us to surmise that McKinsey must have been asked for other McKinsey must have been asked for other ways to increase profitabili

ways to increase proﬁtability in ty in AllstaAllstate’te’ss distribution sector – the agency system. distribution sector – the agency system. At

At the the time, the time, the vast majority vast majority of of agentsagents were

were AllstatAllstate e emploemployees yees who who began began toto feel the effects of the company’s feel the effects of the company’s cost-shifting plan. The costs of running an shifting plan. The costs of running an office, which the corporation previously office, which the corporation previously assumed, were slowly shifted to agents assumed, were slowly shifted to agents through the Neighborhood Office Agent through the Neighborhood Office Agent (NOA) program and then in 2000, (NOA) program and then in 2000, All-state completely shifted its costs, state completely shifted its costs, includ-ing pensions, employment taxes, health ing pensions, employment taxes, health insurance, etc. to its newly-converted insurance, etc. to its newly-converted “en-trepreneurial” agent work force. Thus, the trepreneurial” agent work force. Thus, the greatest oxymoronic title in Allstate greatest oxymoronic title in Allstate

his-tory: the Independent Contractor tory: the Independent Contractor Exclu-sive Agency Owner!

sive Agency Owner!

Enter 2010. Agents are being Enter 2010. Agents are being termi-nated for lack of production, for AFS, nated for lack of production, for AFS, agency standards and perhaps most agency standards and perhaps most ab-surdly - for ALI. Now the Ideal Agency surdly - for ALI. Now the Ideal Agency Model, part of the Sales and Customer Model, part of the Sales and Customer Service

Service Roadmap, tRoadmap, threatens to eliminatehreatens to eliminate thousands of agents as they struggle to thousands of agents as they struggle to grow their agencies to meet this new grow their agencies to meet this new $4 million per agency corporate $4 million per agency corporate stan-dard. Indeed, the future looks bleak for dard. Indeed, the future looks bleak for the agency force. Yes, some will make it, the agency force. Yes, some will make it, but most will fail for a number of but most will fail for a number of rea-sons, including rates, MMGs and a lack sons, including rates, MMGs and a lack of capital. McKinsian in its goals and of capital. McKinsian in its goals and objectives, the Ideal Agency Model was objectives, the Ideal Agency Model was described as follows by Joe Richardson in described as follows by Joe Richardson in an announcement released to the ﬁeld: an announcement released to the ﬁeld:

•

• “Based on ag“Based on agency feedback and ency feedback and model- model-ing, Allstate has determined an ideal scale ing, Allstate has determined an ideal scale that puts an agency in an optimal ﬁnancial that puts an agency in an optimal ﬁnancial position while still encouraging growth and position while still encouraging growth and

sustainability.” sustainability.”

•

• ““An agency’s An agency’s progresprogress toward s toward this ‘idealthis ‘ideal agency model’ will be measured, and tools agency model’ will be measured, and tools are being built to support agencies in their are being built to support agencies in their efforts to maintain a positive ‘trajectory’ efforts to maintain a positive ‘trajectory’ to-wards the model.”

wards the model.” •

• “For ag“For agencies who have aencies who have already met orlready met or exceeded the ideal model, Allstate will exceeded the ideal model, Allstate will contin-ue to provide extensive support to encourage ue to provide extensive support to encourage growth a

growth and susnd sustained tained successuccess.” s.” The future for many

The future for many small to mediumsmall to medium size agencies is clear: grow or go. Zero size agencies is clear: grow or go. Zero tolerance.

tolerance. While

While the the Good Good Hands Hands to to BoxingBoxing Gloves business model is being applied Gloves business model is being applied to the detriment of policyholders, it is to the detriment of policyholders, it is helping to achieve the “expected results” helping to achieve the “expected results” that company leaders need to enhance that company leaders need to enhance their compensation levels and, of course, their compensation levels and, of course, increase shareholder value.

increase shareholder value.

It is very clear to this writer that this It is very clear to this writer that this same Good Hands to Boxing Gloves same Good Hands to Boxing Gloves business model has, and will continue to business model has, and will continue to be, applied to the agency

be, applied to the agency force.force.

Make no mistake. At a minimum, Make no mistake. At a minimum, All-state has a 10-year plan on just when and state has a 10-year plan on just when and where

where they they are are goinggoing. . It’s It’s commocommon kn knowl- nowl-edge that the company plans to reduce the edge that the company plans to reduce the number of existing agents by up to 3,300 number of existing agents by up to 3,300 existing agents over the next few years. If existing agents over the next few years. If you

you don’don’t t plan accordinglyplan accordingly, you , you may justmay just be knocked out of the ring whether it’s be knocked out of the ring whether it’s your ﬁrst

(6)

WHA

WHAT WOULD YT WOULD YOUOU do if someone do if someone stole something from you? What would stole something from you? What would your reaction be

your reaction be if someone lied if someone lied to you?to you? What

What if, in if, in the the course course of a of a business business re- re-lationship, both of these things lationship, both of these things hap-pened to you? Doubtless you would seek pened to you? Doubtless you would seek to quickly end such a relationship. You to quickly end such a relationship. You might even consider legal action if the might even consider legal action if the elements of both cost and outcome were elements of both cost and outcome were decidedly in

decidedly in your favor. your favor. But if the offensesBut if the offenses aren’t easily quantiﬁable, or if over time, aren’t easily quantiﬁable, or if over time, they have grown from an annoyance to they have grown from an annoyance to outright unethical, when does your level outright unethical, when does your level of awareness trigger a response?

of awareness trigger a response? Allstate

Allstate has has declared declared its its agent agent salessales force independent. Yet in clear force independent. Yet in clear contra-diction to an IRS Private Letter Ruling, diction to an IRS Private Letter Ruling, IRS standards and Allstate’s own words IRS standards and Allstate’s own words of a promise of independence, Allstate of a promise of independence, Allstate

agents are anything but independent. agents are anything but independent. On the IRS Website under the heading On the IRS Website under the heading of

of Behavioral Control Behavioral Control , the IRS stipulates, the IRS stipulates an

an employee relationship existsemployee relationship exists when when a certain amount of

a certain amount of control existscontrol exists. The. The very

very ﬁrst ﬁrst point point of of control control listed listed underunder the sub-heading “

the sub-heading “Types of InstructionTypes of Instruction Given

Given” is “” is “When and where to do theWhen and where to do the work.

work.” Allstate agents know the compa-” Allstate agents know the compa-ny dictates the number of hours required ny dictates the number of hours required (44 hours per week) as well as the work (44 hours per week) as well as the work week

week schedule schedule (Allstate (Allstate defines defines the the ac- ac-ceptable holiday schedule) and where the ceptable holiday schedule) and where the company finds it suitable for an agent to company finds it suitable for an agent to locate their offices. Allstate’s corporate locate their offices. Allstate’s corporate advertising for new agents declares one’s advertising for new agents declares one’s ability to “Be your own boss.” If agents ability to “Be your own boss.” If agents have to conform to corporately-defined have to conform to corporately-defined office hours, work week schedules, and office hours, work week schedules, and

corporately approved locations, clearly corporately approved locations, clearly agents are not their own boss. Issues such agents are not their own boss. Issues such as these and more comprise the

as these and more comprise the lie lie part part of the equation.

of the equation.

In 1999 and 2000, Allstate promised In 1999 and 2000, Allstate promised its then-employee agents the ability to its then-employee agents the ability to replace the growing equity of their replace the growing equity of their em-ployee pensions with the value of their ployee pensions with the value of their future book of business under the new future book of business under the new “Independent Contractor Exclusive “Independent Contractor Exclusive Agent”

Agent” program. This program. This promise, used promise, used asas an inducement for employee agents to an inducement for employee agents to quickly convert to the new contract has quickly convert to the new contract has seldomly been delivered on. Newly-hired seldomly been delivered on. Newly-hired agents are promised the future value of agents are promised the future value of their book as a secure retirement income their book as a secure retirement income vehicle

vehicle as well. As as well. As we now we now knowknow, values, values of agent’s books are shrinking, but it is of agent’s books are shrinking, but it is not the U.S. economy that is taking its not the U.S. economy that is taking its toll on their values.

toll on their values. V

Values for books of business have beealues for books of business have beenn severely curtailed by Allstate management severely curtailed by Allstate management through various forms of interference. through various forms of interference. Chief among the types of interference is Chief among the types of interference is the 90 day termination notice. Resulting the 90 day termination notice. Resulting in the conﬁscation of an agent’s book of in the conﬁscation of an agent’s book of business at bargain basement prices, business at bargain basement prices, All-state frequently employs this method of state frequently employs this method of contract termination and then parks the contract termination and then parks the departing agent’s book at the CIC or at departing agent’s book at the CIC or at another agent location at a discounted another agent location at a discounted commission schedule. Agents are often commission schedule. Agents are often harassed with relentless emails or phone harassed with relentless emails or phone calls decrying their performance and are calls decrying their performance and are advised to sell even

advised to sell even before any formal no-before any formal no-tices are delivered. Many times this ploy tices are delivered. Many times this ploy is used even when no warning or is used even when no warning or termi-nation notice is forthcoming. When nation notice is forthcoming. When All-state gains control over an agent’s book state gains control over an agent’s book in this manner, it is the

in this manner, it is the theft theftpart of thepart of the equation. Every Allstate agent should equation. Every Allstate agent should realize by now that they are not realize by now that they are not “inde-pendent contractors.” This article is not pendent contractors.” This article is not about the agents’ “status” as employees; about the agents’ “status” as employees; it is about Allstate’s motivation for it is about Allstate’s motivation for mis-classifying agents as independent. classifying agents as independent.

feature

Allstate

Allstate’’s Hidden Agenda

s Hidden Agenda

ONE AGENT’S OPINION

(7)

Greed and its Partner

A

A lie, in lie, in and and of itself, is of itself, is not necessar-not necessar-ily damaging. “White lies” are told with ily damaging. “White lies” are told with predictable frequency at dinner parties or predictable frequency at dinner parties or during bragging sessions after a ﬁshing during bragging sessions after a ﬁshing trip. Anyone can stand up in a crowded trip. Anyone can stand up in a crowded movie theater and declare he is the best movie theater and declare he is the best tennis player on the planet, in spite of the tennis player on the planet, in spite of the fact he is

fact he is no not t Roger Roger Federer. HoweverFederer. However, this, this example would result in an embarrassing example would result in an embarrassing moment for the individual as opposed to moment for the individual as opposed to creating a beneficial outcome for the liar. creating a beneficial outcome for the liar. It is when the result of telling a lie be It is when the result of telling a lie benefitsnefits the liar at the expense of the recipien the liar at the expense of the recipient thatt that things begin to get more serious.

things begin to get more serious. In the book,

In the book, From Good Hands to BoxingFrom Good Hands to Boxing Gloves

Gloves (reviewed in this issue), we learned (reviewed in this issue), we learned that Allstate customers Jose and Olivia that Allstate customers Jose and Olivia Pincheira were involved in a disputed Pincheira were involved in a disputed claim with Allstate beginning in 1999. claim with Allstate beginning in 1999. The

The book’book’s s authorauthor, , David David BerardinBerardinelli,elli, explains that the Pincheira’s agent explains that the Pincheira’s agent admit-ted she told Mr. Pincheira that medical ted she told Mr. Pincheira that medical payments coverage was the same as payments coverage was the same as unin-sured motorist except that uninunin-sured sured motorist except that uninsured mo-torist coverage paid for lost wages. Clearly torist coverage paid for lost wages. Clearly this is not the case. As the Pincheiras were this is not the case. As the Pincheiras were retired, they were “sold” on eliminating retired, they were “sold” on eliminating this valuable coverage because the agent this valuable coverage because the agent falsely explained the coverage. Likely, the falsely explained the coverage. Likely, the agent’s intent was not to harm the client, agent’s intent was not to harm the client, and had Allstate admitted the error, the and had Allstate admitted the error, the resulting lawsuit and public disclosure of resulting lawsuit and public disclosure of Allstat

Allstate’s cone’s connection witnection with McKinsey andh McKinsey and Company may have never seen the light Company may have never seen the light of day. But according to Berardinelli, of day. But according to Berardinelli, Allstat

Allstate’s choice e’s choice to to defend defend the the lie lie ratherrather than resolve the dispute is totally founded than resolve the dispute is totally founded in a level of greed that is so profound, it in a level of greed that is so profound, it is breathtaking.

is breathtaking.

Nearly eight years earlier, Allstate had Nearly eight years earlier, Allstate had already entered into an agreement with already entered into an agreement with McKinsey and

McKinsey and CompanyCompany, an international, an international business consulting company. McKinsey business consulting company. McKinsey was

was hired hired to to perform perform a a “top “top to to bottombottom”” redesign of Allstate’s business operations. redesign of Allstate’s business operations. McKinsey was to concentrate initially on McKinsey was to concentrate initially on the claims portion of Alls

the claims portion of Allstate’s operations.tate’s operations. As relat

As related in the boed in the book, ok, it was it was McKinsey’McKinsey’ss Claims Core Process Redesign or CCPR Claims Core Process Redesign or CCPR that the company used to derail the that the company used to derail the Pin-cheira’s claim. It was also clearly Allstate’s cheira’s claim. It was also clearly Allstate’s choice to implement the CCPR mandates choice to implement the CCPR mandates or not. For Allstate, it became the or not. For Allstate, it became the pur-suit of proﬁt over contractual obligation. suit of proﬁt over contractual obligation. Greed over compassion.

Greed over compassion.

Greed does not exist without a “ Greed does not exist without a “plan.plan.”” Y

You ou might might say say they they are are partners. partners. MostMost of us understand it is not a bad thing to of us understand it is not a bad thing to want more

want more of something. Afof something. After all, ter all, whowho wouldn’

wouldn’t want t want more dessert, more dessert, or more or more lovelove or more money? It becomes a or more money? It becomes a differ-ent issue, however, when our desire for ent issue, however, when our desire for something is conjoined with a plan that, something is conjoined with a plan that, when implemented,

when implemented, harms someone harms someone else.else. If I’m greedy and I want more dessert, I If I’m greedy and I want more dessert, I

be greedy today!” Rather, we hope he be greedy today!” Rather, we hope he de-clares a hopeful future for his company clares a hopeful future for his company that is consistent with sound business that is consistent with sound business ethics and mindful of his fiduciary ethics and mindful of his fiduciary re-sponsibilities toward company sponsibilities toward company employ-ees, shareholders and the general public. ees, shareholders and the general public. But when the CEO has a plan that But when the CEO has a plan that en-riches him at the expense of others, an riches him at the expense of others, an ethical line has been crossed that ought ethical line has been crossed that ought to land him in jail. Any plan a CEO to land him in jail. Any plan a CEO un-dertakes that breaches the ultimate dertakes that breaches the ultimate fidu-ciary responsibility of putting employees ciary responsibility of putting employees and shareholders first is a defacto lie. and shareholders first is a defacto lie. And

And therefore, therefore, for for greed greed to to exist exist therethere must also be a lie at some level.

must also be a lie at some level.

Most of us remember the Enron Most of us remember the Enron scan-dal. At the time it represented the premier dal. At the time it represented the premier example of cor

example of corporate greed. Tporate greed. To then-En-o then-En-ron CEO Jeff Skilling, the potential for ron CEO Jeff Skilling, the potential for immense wealth was so overpowering immense wealth was so overpowering that the lies he was willing to tell were that the lies he was willing to tell were practically boundless. In the end, greed practically boundless. In the end, greed blinded him so much that he was even blinded him so much that he was even willing

willing to to risk risk an an “insider” “insider” stock stock tradetrade for 500,000 Enron shares worth $15.5 for 500,000 Enron shares worth $15.5 million. It is doubtful Skilling set out to million. It is doubtful Skilling set out to defraud Enron at the beginning of his defraud Enron at the beginning of his tenure with the company. Rather, it was tenure with the company. Rather, it was his Harvard MBA, combined with his his Harvard MBA, combined with his training at McKinsey as one of their top training at McKinsey as one of their top executives that offered him the insight to executives that offered him the insight to recognize the opportunity. Said another recognize the opportunity. Said another way; knowledge,

way; knowledge, plus plus greed, plus greed, plus the liethe lie equaled the potential for untold wealth. equaled the potential for untold wealth. In all, the Enron collapse represented the In all, the Enron collapse represented the loss of more than $60 billion in market loss of more than $60 billion in market value, $2.1

value, $2.1 billion billion in in retirement retirement savingssavings and 5,600 jobs. S

and 5,600 jobs. Skilling wasn’t willing tokilling wasn’t willing to think about the consequences of his think about the consequences of his ac-tions, he only saw the cash.

tions, he only saw the cash.

If the old adage of the apple not If the old adage of the apple not fall-ing far from the apple tree is true of ing far from the apple tree is true of people, it likely has a similar adage for people, it likely has a similar adage for corporations. In 1979, fresh from getting corporations. In 1979, fresh from getting his MBA from Harvard, Skilling was his MBA from Harvard, Skilling was recruited by McKinsey and Company. recruited by McKinsey and Company. There

There he he enjoyed enjoyed a a kinship-like kinship-like bondbond and a plethora of business skills and a plethora of business skills unri- valed

valed in his in his industry. By 1987, industry. By 1987, he he was awas a top executive for McKinsey and proved top executive for McKinsey and proved his considerable talents while working as his considerable talents while working as a consultant to Enron. In 1990 he was a consultant to Enron. In 1990 he was recruited by Enron’s Ken Lay to be CEO recruited by Enron’s Ken Lay to be CEO of Enron Finance Company. In 2001, of Enron Finance Company. In 2001, Skilling became CEO of Enron Skilling became CEO of Enron Corpo-ration. A scant few months later, ration. A scant few months later, Skill-might plan a way to distract you so I can

might plan a way to distract you so I can take the last piece of birthday cake. All in take the last piece of birthday cake. All in good fun, of course. But when greed good fun, of course. But when greed involves

volves moneymoney, the , the potential for potential for schemesschemes or “plans” would seem to be

or “plans” would seem to be limitless. Aslimitless. As we will

we will see, some see, some plans end witplans end with a h a differ- differ-ent than expected outcome.

ent than expected outcome.

Why McKinsey?

It would shock most of us if it was It would shock most of us if it was reported that the CEO of a prominent reported that the CEO of a prominent corporation called a press conference and corporation called a press conference and publically declared, “I think I‘m going to publically declared, “I think I‘m going to

Enron is

not McKi

nsey’

s

only

controversia

l

connection.

McKinsey has

been associated

with a lawsuit

related to Hurricane

Katrina, Swissair’s

bankruptcy, the

British railway

ﬁnancial collapse,

Allstate’s claims

practices,

and more.

(8)

ing would resign, followed by the now ing would resign, followed by the now famous investigation.

famous investigation.

Enron is not McKinsey’s only Enron is not McKinsey’s only controversial

versial connection. connection. McKinsey McKinsey has has beenbeen associated with a lawsuit related to associated with a lawsuit related to Hur-ricane Katrina, Swissair’s bankruptcy, ricane Katrina, Swissair’s bankruptcy, the British railway ﬁnancial collapse, the British railway ﬁnancial collapse, Allstate’s

Allstate’s claims claims practices, practices, and and more.more. Several books have been written Several books have been written detail-ing Mckinsey’s controversial activities ing Mckinsey’s controversial activities including

including From Good Hands to BoxingFrom Good Hands to Boxing Gloves

Gloves . So the question then becomes,. So the question then becomes, are there just a few bad apples or is the are there just a few bad apples or is the apple tree producing the bad fruit? apple tree producing the bad fruit?

When

When Allstate Allstate hired hired McKinsey McKinsey andand Company in 1992 to help redesign Company in 1992 to help redesign (“plan”) its business processes, it is likely (“plan”) its business processes, it is likely they had a specific set of problems in they had a specific set of problems in need of addressing. After suffering more need of addressing. After suffering more than $2.5 billion in losses from than $2.5 billion in losses from Hurri-cane Andrew, anticipating going public cane Andrew, anticipating going public in the largest initial public offering ever in the largest initial public offering ever in the United States, and dealing with in the United States, and dealing with IRS scrutiny over its captive agents IRS scrutiny over its captive agents fil-ing Schedule C, Allstate likely could use ing Schedule C, Allstate likely could use the expertise they felt McKinsey had to the expertise they felt McKinsey had to offer. But just as likely was the fact that offer. But just as likely was the fact that Allstate

Allstate viewed viewed McKinsey’s McKinsey’s expertise expertise inin dramatically increasing executive dramatically increasing executive com-pensation as a most coveted beneﬁt. pensation as a most coveted beneﬁt. Unlike a marriage or even a dating s Unlike a marriage or even a dating situ- itu-ation, opposites do not attract in the ation, opposites do not attract in the busi-ness world. A partnership of like-minded ness world. A partnership of like-minded entities run by like-minded individuals is entities run by like-minded individuals is essential if success is to be attained. essential if success is to be attained. Like-ly, the millions of dollars Allstate paid to ly, the millions of dollars Allstate paid to

McKinsey didn’t hurt either, but there McKinsey didn’t hurt either, but there also had to be more. McKinsey’s also had to be more. McKinsey’s Har- vard business scho

vard business school mentalol mentalityity, combi, combinedned with its

with its consideraconsiderable ble connecticonnections, repre-ons, repre-sents the core of its philosophy and was sents the core of its philosophy and was aptly summed up in a January 17, 2002 aptly summed up in a January 17, 2002 W

Wall Street Journal article that said, “all Street Journal article that said, “ForFor decades, McKinsey has been revered - even decades, McKinsey has been revered - even feare

feared - d - for its for its inﬂuence in inﬂuence in boardboardrooms androoms and its extensive and powerful old-boy network its extensive and powerful old-boy network among major corporations. Its alumni list among major corporations. Its alumni list reads like a who’s who of the Fortune 500, reads like a who’s who of the Fortune 500, including the likes of IBM Corp. Chief including the likes of IBM Corp. Chief Ex-ecutive Lou Gerstner. In recent years, that ecutive Lou Gerstner. In recent years, that network has helped privately held McKinsey network has helped privately held McKinsey win lucrative consulting contracts from win lucrative consulting contracts from com- panies

panies run by its run by its former paformer partners.rtners.”” Allstate

Allstate knows knows a a thing thing or or two two aboutabout old-boy networking as Former Sears old-boy networking as Former Sears CEO Ed Brennan, and Ed Liddy can CEO Ed Brennan, and Ed Liddy can attest. And lest we forget, Tom Wilson attest. And lest we forget, Tom Wilson served as Sears’ Vice President of served as Sears’ Vice President of Strat-egy and Analysis. All of these men e egy and Analysis. All of these men even- ven-tually “found” their way to very powerful tually “found” their way to very powerful positions at Allstate.

positions at Allstate.

Dear Shareholders:

What is yours, is mine

If corporate proﬁts are the primary If corporate proﬁts are the primary fo-cus of a CEO, can greed be far behind? cus of a CEO, can greed be far behind? What

What differentiates differentiates a a successful successful CEOCEO from one that is going the

from one that is going the way of Enron’way of Enron’ss Jeff

Jeff Skilling? Skilling? Shareholders Shareholders would would argueargue that the former enriches the value of a that the former enriches the value of a company and takes care of his company and takes care of his employ-ees. The latter enriches himself and takes ees. The latter enriches himself and takes

advantage of his employees. advantage of his employees.

McKinsey and Company was hired McKinsey and Company was hired during Jerry Choate’s tenure with during Jerry Choate’s tenure with All-state. It is assumed Jerry Choate, then state. It is assumed Jerry Choate, then President of Allstate’s Personal President of Allstate’s Personal Prop-erty unit, at least had a hand in hiring erty unit, at least had a hand in hiring McKinsey and Company. Choate later McKinsey and Company. Choate later became CEO. His successor, Ed Liddy, became CEO. His successor, Ed Liddy, then retained McKinsey and continued then retained McKinsey and continued implementing their plan with equal implementing their plan with equal en-thusiasm.

thusiasm. In From Good In From Good Hands to BoxingHands to Boxing Gloves

Gloves , Berardinelli writes, “, Berardinelli writes, “We do knowWe do know that Choate and Liddy immediately that Choate and Liddy immediately implemented

plemented McKinsey’McKinsey’s s recommendation recommendation toto create executive compensation plans at create executive compensation plans at All-state based on a strong belief in ‘linking the state based on a strong belief in ‘linking the interests of management with those of our interests of management with those of our shareholders.’ Together, Choate and Liddy shareholders.’ Together, Choate and Liddy used the Sears IPO and their adoption of used the Sears IPO and their adoption of McKinsey’

McKinsey’s s business plan, business plan, to to create lottery-create lottery-sized personal fortunes for themselves. sized personal fortunes for themselves.””

Choate had accumulated stock and Choate had accumulated stock and options worth an estimated $63 million options worth an estimated $63 million and retired in 1998, receiving an and retired in 1998, receiving an esti-mated $10 million more. Liddy retired mated $10 million more. Liddy retired in 2006 with 3,823,255 shares of Allstate in 2006 with 3,823,255 shares of Allstate worth

worth $250 $250 million, million, plus plus an an additionaladditional $71 million in retirement package $71 million in retirement package bene-ﬁts. Not bad parting gifts for two

ﬁts. Not bad parting gifts for two gradu- gradu-ates of the McKinsey business plan for ates of the McKinsey business plan for Allstate CEOs.

Allstate CEOs. Apparently

Apparently, , TTom om Wilson is Wilson is just gettingjust getting ramped up with his wealth accumulation ramped up with his wealth accumulation plan because his total compensation for plan because his total compensation for 2008 was $9.51 million and $10.4 2008 was $9.51 million and $10.4 mil-lion in 2009. And even though the stock lion in 2009. And even though the stock has tanked recently, his 2010 has tanked recently, his 2010 compensa-tion looks to be going up. All this is tion looks to be going up. All this is oc-curring as Wilson lays off or ﬁres curring as Wilson lays off or ﬁres thou-sands of employees and agents, and while sands of employees and agents, and while giving up market share

giving up market share to GEICO, Stateto GEICO, State Farm and Progressive.

Farm and Progressive.

Dear Agents: What is

yours, never really was yours.

Therefore, it was always mine

But Allstate and Wilson couldn’t earn But Allstate and Wilson couldn’t earn a dime if it weren’t for the blood, sweat a dime if it weren’t for the blood, sweat and cash that Allstate agents have and cash that Allstate agents have in- vested

vested into into their their agencies. The agencies. The way way thethe company goes through agents, it would company goes through agents, it would seem more correct to classify them as seem more correct to classify them as “useful idiots” instead of the key “useful idiots” instead of the key com-ponent they are. And much like the lazy ponent they are. And much like the lazy child is maligned for sloppy schoolwork; child is maligned for sloppy schoolwork; the Allstate agent is derided for failing the Allstate agent is derided for failing