Allstate Agents Vote to Unionize; Cynthia Young Leaves Encompass

 

Allstate agents voted this week to affiliate with the Office and Professional Employees International Union reported National Underwriter.

According to reports, members of the National Association of Professional Allstate Agents voted overwhelmingly in favor of the move “in an effort to have more say over the future of their agencies.”

OPEIU, a member of the AFL-CIO, says 94 percent of the 1,200 NAPAA members, voting by secret ballot, approved the affiliation say news sources.

“Our members have sent a message and we hear them loud and clear,” Jim Fish, NAPAA executive director said in a statement reported in the National Underwriter. “Now we will work closely with OPEIU to finalize an affiliation that establishes NAPAA as a guild.”

Reuters reported the association has complained in past that Allstate treats agents under contract as employees even though they are classified as independent contractors, giving the company control over the agents while denying them the benefits employees receive.

Allstate strenuously denied this claim in news reports and described the NAPAA as a "small group" that does not have any official interaction with the company.

According to Reuters, it is not clear what percentage of Allstate's total agent force the NAPAA actually represents. Until the company switched to an independent contractor model for its agent force in 2000, it had more than 6,000 agents as employees.

According to National Underwriter the tension between the agents and Allstate flared up earlier this year when the company announced it would reduce agent’s commissions but increase their variable, performance based commissions.

Allstate told National Underwriter it was planning to review its agency relationships and would seek to combine smaller agencies into larger ones. Allstate’s CEO reportedly said the agents support this effort

Also, this week Allstate announced the departure of Cynthia Young, President of Encompass Insurance, who has decided to leave the company after six years.

Cynthia joined Allstate as a vice president in September 2005. She was appointed to state manager for the Northeast Region.  In January of 2006, she was appointed President of Encompass Insurance. 

“I want to thank Cynthia for her commitment to Allstate and Encompass and wish her the best in her future endeavors,” wrote Don Bailey,
 Executive Vice President, 
Emerging Businesses in a letter to Bob Rusboldt, IIABA CEO.

“Allstate remains completely committed to the Encompass business. This business represents a core and central part of the company's aggressive business goals, and we are focused on driving growth via the independent agency channel,” wrote Bailey. “We have great potential and the time is now to capitalize on that potential and generate substantial growth.”

Next week, Allstate expects to announce a new president who has independent agency experience.