How a former GM exec is expanding Allstate
Herberger: "We've dropped the CarMor brand and rebranded our service contracts and guaranteed asset protection plans 'Allstate.' Allstate is a strong, well-recognized brand."
Allstate Dealer Services, a large insurer and F&I supplier, is giving car dealerships the opportunity to sell auto insurance to their customers as licensed Allstate agents. In addition to traditional aftermarket products, these dealerships will sell liability, collision and comprehensive coverage.
The company has a test under way at 13 dealerships in Florida and New York and intends to add more stores to the program before year end.
Doug Herberger, president of Allstate Dealer Services and a former General Motors executive, spoke with Staff Reporter Donna Harris.
What are your expansion plans for the dealership insurance agencies?
We started with four or five locations in Florida. At the end of this year we expect to have 15 to 19 dealers in the program. We will continue to evaluate it and roll it out to more dealerships in 2012.
The program allows you to grow your insurance agency network. What does it do for dealers?
It gives dealers a product to sell that promotes customer loyalty. People have to renew their vehicle insurance every six months, so dealerships have to get back to the customer. The dealership looks just like an Allstate Agency.
What kind of profit can dealers make?
We can't talk about details because it's still an experiment. We don't have critical mass.
Will this work at every dealership?
No, it's not for everyone. It takes dealer engagement. The ones that are making it work are built for success because of strong dealer involvement. It takes a lot of tender loving care. There are a lot of moving parts. The teams within the dealership need to work together.
You've said dealers also are going to be selling Allstate-branded F&I products.
We've dropped the CarMor brand and rebranded our service contracts and guaranteed asset protection plans "Allstate." Allstate is a strong, well-recognized brand.
We also added four new products marketed under the Allstate brand: tire-and-wheel coverage, excess wear-and-tear coverage for lease vehicles, theft protection and prepaid maintenance.
What else are you adding to your product lineup?
Allstate Insurance has an identity-theft product and we're thinking about moving it to the dealer space. We improved some of the language in our GAP contract that was not consumer- or agent-friendly. We are also working on a vehicle service contract that can be sold out of the service lanes.
How will that service plan differ from the ones dealers typically sell?
We're still fine-tuning it. We want to be sure we price it right for the agent, dealer and consumer.
Will this be sold by the service adviser or by the finance office?
This would be sold in the service department but the service adviser could do a turnover to the F&I office. It's designed for the service department, and the revenue would stay in the service department.
We have a person working full time to develop that process for the dealers. We are going to figure out how to do it right. We'll roll it out in January.