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Allstate hopes training program puts agents in good hands

Frank Giumpa II and his friend Michael Wasik had been selling memberships at a Bally's fitness center for more than two years when their supervisor's husband suggested a change.

The husband, an insurance agent for Allstate Corp., told them about a new incubator-type program the company had developed to train new agents who had little or no insurance background. Giumpa and Wasik looked into it, and became two of the first participants.

A month ago, Giumpa, 25, "graduated" from Allstate's Developmental Agency Location in Williamsville and set up his own agency in Clarence. He's hired his mother, a former agent at a West Seneca agency, as well as another sales agent and two telemarketers.

Wasik, 27, is slated to graduate in October and open up shop in Blasdell, down the road from the McKinley Mall. The one-time door-to-door propane salesman now employs one agent and two telemarketers.

Both say they're excited to be on their own. And both say they couldn't have done it as well without Allstate's program.

"We both didn't come from any insurance background at all, so that's why this program is good," said Giumpa, a garbage collector before he worked at Bally's. "You definitely needed some guidance. I needed someone to show me what the products are."

At a time when the insurance industry is hotly competitive, insurance companies are eager to grow their sales forces any way they can, and are searching for potential candidates anywhere they can find them.

Most insurance companies sell through independent agencies and brokerages or employ their agents directly, which means training, development and supervision is part of the job.

But Northbrook, Ill.-based Allstate, together with its two big competitors State Farm Mutual Insurance Co. and Nationwide Financial, have long relied on "exclusive agents" -- essentially independent small businesses who sell only one company's products, earn commissions for their work, and are otherwise separate from the company.

That means they're responsible for their own success or failure.

"Our agencies are independent contractors," said Richard Warren, New York state human resources manager for Allstate, who has been closely involved with the DAL program. "They're expected to run a highly successful business that represents our brands well and ensures outstanding customer service."

That's very desirable for those who have the energy, enthusiasm and understanding to start and run their own small business.

So companies have developed their own initiatives to help things along. State Farm has a six- to nine-month internship program before new agents are placed in the field, depending on their background and experience. The program includes as many as eight weeks to get licensed, followed by classroom and online training, and then three months in the field with an agent. Finally, they have a couple of weeks to start up.

Those with no insurance background must first go through a 45- to 60-day selection process, which includes taking a career profile questionnaire, undergoing a background check, and writing a business plan.

"We've received a lot of great feedback on our program, but we're always looking at our process and how we can make it better," said Gwen Rector, staff manager in agency placement, selection and support. "It's always good for us at State Farm to keep our eyes open to what other companies are doing, keeping in touch with the Allstates and the Nationwides, and what are they doing that works or doesn't work."

Nationwide has a companywide mentor program for new agents, with 150 individuals participating now. Existing agents hire candidates as "associate" agents for two years, and the associates are paid a mix of salary and commission.

With the help of the mentors, the associates complete a business plan, fulfill goals and ultimately get their own agency up and running. "This program's been pretty successful because the candidate works right there in the trenches and gains real world experience," said spokesman Joe Case.

A more formal approach

But Allstate has taken a more formal approach. First piloted in New York City in mid-2003 and unveiled in Buffalo in early 2004, the DAL program is designed to ensure that Allstate "didn't miss a group of highly educated and highly driven people," Warren said.

Allstate recruits new agents through job fairs, advertisements, mailings to licensed professionals at other companies and especially word-of-mouth referrals. Then, during the initial interview process, officials can evaluate if someone might be a candidate for the DAL.

"We have the recipe, we can give them the ingredients, but unless they have the entrepreneurial spirit, they're not going to be successful," said James Mulvaney, Buffalo DAL manager.

Once selected, the program sets up a participant in a corporate-owned sales office for up to 18 months, operating as their own sales agency -- under their name -- within a larger structured setting, but employed full-time by Allstate for the duration of the program.

They are provided education and support to help them get their insurance and securities licenses, and then receive four weeks of training in marketing, products, sales, the processes they have to follow, and how to run their own business.

They have to develop their own business plan, assess the demographics and potential for their market, choose exactly where they will locate their agency office when they graduate, decide how to advertise their agency and get leads, and hire sales and telemarketing staff. They get support and advice from the DAL manager and other staff, and also from their peers.

And increasingly during the program, they must develop a client list and sell real policies to customers. "It's all hands-on," Wasik said. "You learn from your mistakes. I did things totally wrong when I first got here, but I learned from it."

On-the-job training

That gives them hands-on experience but also ensures that Allstate profits during the training. Indeed, they have to meet sales goals based on their business plan, and they are evaluated every three months.

"Not everybody's going to be successful. It's demanding work," Warren said.

While in the program, participants receive a base salary from Allstate -- which regular agents do not -- as well as a smaller sales commission. They are also provided with marketing funds to spend as they wish, as part of the educational process.

And their office, phone service and other support is paid for by Allstate, which pays to train and employ their sales and marketing staff for up to 16 weeks.

All told, Allstate spends about $100,000 on each candidate in the program in New York, including their salary. But the new agents will have accumulated capital and assembled a skilled staff from the get-go.

"If you open your own business when you come off the street, you are responsible for everything from the word go. Support staff, lease, electricity, marketing, everything," Warren said. "This gives them time to develop the processes."

Participants can stay for up to 18 months in the program, but can leave earlier if they are ready. A transitional manager helps for the first month to make sure everything is working smoothly. And if they successfully make the transition, they will get a marketing bonus.

Building long-term ties

Finally, Allstate pays a bonus for up to 45 months after graduation. "We just don't leave somebody. It's not as though the 18 months is over and we just pull the plug," Mulvaney said.

That's what appeals to Scott Brzezinski, a 27-year-old former claims adjuster and then fraud investigator for St. Paul Travelers Cos., who joined the Allstate DAL program in May.

"Rather than having the sink-or-swim mentality, they can groom you," he said. "They make sure you have every aspect down before they give you another."

Now, as Wasik gets ready to leave the cocoon he's been in, he says he's ready and eager, and not intimidated by the prospect of being on his own. "You know it's going to work when you're out there," he said. "What's the difference between being here and being out there?"

e-mail: jepstein@buffnews.com

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