Allstate offers insurance agencies to more dealerships
Allstate Dealer Services is offering U.S. car dealerships a chance to own and operate Allstate Insurance agencies selling a full line of Allstate-branded insurance products on their property.
Besides auto insurance, the agencies will be able to sell property, casualty and life insurance products.
Last year Allstate tested a pilot of this program at 11 dealerships in Florida, New York, Illinois and Texas. Allstate is opening the program to all U.S. dealerships but initially will pursue established groups with multiple store locations.
The insurance company pays a 10 percent commission on new and renewal business. "If you've got a $1 million book of business, which is actually very small, and it's renewing at 90 percent, which is about average for the industry, that means you have $90,000 a year coming in on renewal commissions," said Mark LaNeve, Allstate senior executive vice president of sales and marketing, in an interview.
The Allstate agency typically is on the showroom floor and operates during dealership hours.
The startup costs to sell Allstate products is $100,000 to $200,000. It takes "a couple months" to get trained and licensed, LaNeve says. Only trained and licensed personnel at the car dealerships would sell the new insurance products. Traditional aftermarket products such as extended service contracts and GAP still would be sold in the F&I office.
Doug Herberger, president of Allstate Dealer Services, will head the program. Herberger and LaNeve are former General Motors executives.
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