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Building a business as an Allstate Exclusive Agent

R27434-2
Building a Business As an 
    Building a Business As an
    Allstate Exclusive Agent

    The following overview highlights the R3001 Agency opportunity.* Agency owners 
    are independent contractors and are not employees of Allstate.  Multiple factors 
    are independent contractors and are not employees of Allstate. Multiple factors
    contribute to the success of an Allstate Agency.  As such, individual results will vary. 
    All information, including bonus, revenue, compensation, and education information 
    is subject to change.

    See the R3001 Exclusive Agency Agreement, the Exclusive Agency Independent 
    Contractor Manual, the Exclusive Agency Independent Contractor Reference Guide, 
    the Supplement for the R3001 Agreement, and the Allstate Agency Standards for full 
    details.  
    details

    * Excludes New Jersey




2
Allstate – Our Shared Vision

    Our Purpose
      We are the Good Hands:  We help people realize their hopes and dreams through 
      We are the Good Hands: We help people realize their hopes and dreams through
      products and services designed to protect them from life’s uncertainties and to 
      prepare them for the future.
    Strategic Vision
      To reinvent protection and retirement for the consumer.
    Our Values
          Honesty, caring and integrity
          Inclusive diversity
          I l i di        i
          Engagement
          Accountability
          Superior performance
          Superior performance
    Corporate Goal
      We will grow the value of our company for our customers, our associates, our 
      shareholders, our communities and society.
      shareholders our communities and society


3
Join an Industry Leader

    ENJOY THE BENEFITS OF WORKING WITH ALLSTATE
    Allstate provides you with support that is among the best in the industry
             p        y          pp                g                        y
        High brand‐name recognition
        A comprehensive education program
       Unlimited money making potential
       Unlimited money‐making potential
       Ownership of the economic interest in the book of business your agency writes
       Customer Information Center (CIC) provides after hours support for your agency
       One of the largest teams of centralized claims professionals in the country with 24 x 7 
       One of the largest teams of centralized claims professionals in the country with 24 x 7
       support
       Marketing materials designed to help you generate revenue for your agency
       A customizable company website to help drive clients to you
       A customizable company website to help drive clients to you
       An exciting awards and recognition program that rewards you for achieving business 
       objectives established by Allstate
       Support from Allstate s field sales leadership group
       Support from Allstate’s field sales leadership group
       Potential to own multiple locations

4
Getting Started

    WHAT YOU NEED TO SUCCEED AT ALLSTATE
    Requirements
            Available start‐up capital to meet cash flow market requirement (minimum $50,000)
            A il bl               i l             h fl      k        i        ( i i      $50 000)
            P&C and Life/Health licenses
            Financial Industry Regulatory Authority (FINRA) Series 6 license (and Series 63 license if 
            required by state law), which will need to be obtained within a certain time after agency 
            appointment

    Characteristics 
            Networks proactively
             et o s p oact e y
            Projects persuasive and professional presence
            Makes quality decisions
            Drives for results and profitability
            Focuses on relationship building
            Focuses on relationship building
            Supports the Allstate vision and purpose
            Creates strategic business solutions
            Adapts to changing conditions
            Works effectively
            Works effectively
            Leads and motivates staff

5
Navigating Your Business Options
    DECIDE HOW TO RUN YOUR BUSINESS
    With the option of purchasing an existing Allstate Agency, you have the advantage of 
    buying a business that s already up and running.  There are different bonus and incentive 
    buying a business that’s already up and running There are different bonus and incentive
    opportunities available depending on whether the agency has less than 750 
    policies/$800,000 premium or more than 750 policies/$800,000 premium.

                                    Becoming an Allstate
                                     Exclusive Agent…



                                                           Starting a
                         Purchasing an
                                                         new agency
                        agency from an
                                                         from scratch
                        existing Allstate
                               g
                        Exclusive Agent



         Less than 750
         L     th                     More than 750
                                      M     th
        policies/$800,000            policies/$800,000

6
Evaluating Your Business Options

    CONSIDERATIONS AS YOU EVALUATE THE OPPORTUNITY TO BUY AN 
      EXISTING ALLSTATE AGENCY
         What is the business environment?
         What are the financial results of the agency?
         Is the agency an efficiently operated business?
         Do I have sufficient liquid capital to invest in growing the business?
         Will I be able to secure financing if needed to purchase the book of business?
         Will agency staff be retained after the purchase?
         What is the value of the agency?
         Wh i h          l    f h          ?
         What staffing issues exist?
         Will the existing location be maintained after the agency purchase?
         What factors may affect the retention of customers in the book of business?
         Wh t f t             ff t th     t ti      f    t      i th b k f b i       ?
         What legal issues should be considered?
         What is the market opportunity to grow the business?
         Will you retain the existing technology after purchasing?
         Will you retain the existing technology after purchasing?


7
OTHER BUSINESS CONSIDERATIONS

    DECIDE HOW TO RUN YOUR BUSINESS
    Understand your location options
           Maintain existing location
           Establish a new location
           Relocate an existing agency
           Branding your agency
    Develop your business plan
           Operating
               Staffing
               Business Processes
           Marketing
               Demographics
               Lead Generation
               Advertising
           Financial
               Cash Flow Projections
               Cash Flow Projections
               Production goals and expenses

8
Branding Your Business 

    YOUR AGENCY’S IMAGE
      First impressions count and that goes for your office space as well.  The Allstate 
      Branded Retail Environment (BRE) ensures that, as customers drive by or walk up 
                                    (    )
      and enter your agency, they’ll feel confident that they’ve come to the right place 
      for their insurance needs. The look helps promote a positive customer experience 
      and create a positive, inviting work environment.
      and create a positive, inviting work environment.
      To view all options and pricing, please visit the BRE Website at 
      www.brandyouragency.com




9
Education and Support

     ALLSTATE PROVIDES EDUCATION TO HELP YOU GET AHEAD
          Allstate provides an education program on Allstate’s products, recommended 
          sales techniques and processes 
          sales techniques and processes
              Program is approximately 5 weeks
              Education is conducted regionally and at Allstate’s National Sales Education Center 
              (NSEC) 
              Program includes Auto, Property, Financial and Run the Business track which is  
              P       i l d A t P            t Fi     i l d R th B i            t k hi h i
              designed to help with the set up and operational side of your agency
          Once you have Successfully completed the Education Program, you will receive 
          a $3,000 bonus payable in first month of the R3001 Agreement

     ONGOING CONSULTATIVE SUPPORT FROM A FIELD SALES LEADER
          Sales and marketing processes
          Results review
          R l        i
          Ongoing education
          Business results consultation




10
Commissions Structure

     P&C COMMISSIONS SCALE
      Commission Amount by Line*        New %   Subsequent 
                                                 renewal %

      Auto, Standard                     10         10
      Motorcycle                         10         10
      Off road Vehicle                   10         10

      Auto, Non‐Standard                  8         8
      Personal Property                  10         10
      Boat                               10         10
      Landlord Package
                    g                    10         10
      Manufactured Home                  10         10
      Personal Umbrella Policy           10         10
      Condo and Renters                  10         10
      Commercial, Nonfleet               10         10
      Commercial Casualty ‐ Fleet        10         10
      Commercial Casualty – all Other
      First $2,500
      First $2 500                       20         10
      Over $2,500                        12         10
     * Excludes state exceptions

11
Allstate Financial Opportunity

     ALLSTATE LIFE AND FINANCIAL PRODUCTS
         Our extensive portfolio includes term and permanent life, annuities and variable 
         products
         Allstate offers the opportunity to write Life and Financial Products by either:
                 Partnering with an Exclusive Financial Specialist (EFS)*, a specialist in life, savings and 
                 financial products ( Shared Business)
                 financial products (“Shared” Business). 
                 Write life and financial products on your own (“Solo” business)
         Ability to earn credit towards production goals, bonuses and awards
         Allstate Financial enhanced commission scales are based on your productivity – the 
         more you write, the higher the commission scale




      *known as Financial Specialists in NY



12
Resources for Growth – Established Agencies 

     RESOURCES FOR GROWTH IS DESIGNED TO REWARD AGENCIES THAT 
       ACHIEVE BALANCED PERFORMANCE
        Agency performance is measured on five key business objectives: Retention, Acquisition, Profitability, Allstate 
        Financial Production Credit and Agency Loyalty Index
        Agency results are matched to goals established for each measurement category and points are earned 
        based on those results (based on 10.5 point scale)
               Retention results are based on Standard Auto Retention % 
                      i        l       b d       S d d                  i %
               Acquisition results are based on a combination of Personal Auto New Issued Items and Emerging Business New Issued 
               Items 
               Profitability results are the better of total casualty 12MM or 24MM adjusted paid loss ratio
               Allstate Financial Production Credit results are based on total YTD Production Credit (reduction for not meeting 
               Expected Results)
               Agency Loyalty Index results are based on the annual Agency Loyalty Index score 
        Points are distributed across six Resources for Growth tiers
               Platinum (7.5 – 10.5 points)
               Gold (6.0 – 7.4 points)
               G ld (6 0 7 4 i t )
               Silver (5.5 – 5.9 points)
               Bronze (2.5 – 5.4 points)
               Standard (0.1 – 2.4 points)
                     ( p
               Base (0 points or less))
        Resources for Growth tiers will be used across multiple programs including the Agency Bonus, Awards and 
        Recognition, Expected Results, and qualification for other business opportunities 

13 *Start-up agencies have a different measurement – see page 25
Benefits For High Performance

     GROWING A PROFITABLE AGENCY WITH HIGH LEVELS OF CUSTOMER LOYALTY 
     AND SATISFACTION
        Executive Advantage 
            Brings together additional resources that can help brand, grow and manage your 
            business. 
            Centralizes many resources agencies use today to market and manage their businesses 
            into one Intranet‐based Gateway site called the Executive Advantage Resource Center

        Premier Service Agency
            High value web leads from www.Allstate.com
            Priority placement on the Agency Locator
            PSA Logo placed on the agency website
            Executive Advantage boost

        Customer Focused Acquisition
        Customer Focused Acquisition
            Enables small/medium‐sized agencies to purchase economic interest in a small book of 
            business and consolidate it with their existing book
            Designed to help high‐performing trajectory agencies achieve scale towards the ideal 
            agency model by providing inorganic growth opportunities
                      d lb       idi i         i         h        ii


14
Awards and Recognition

     AS AN EXCLUSIVE AGENT, YOU’LL HAVE THE OPPORTUNITY TO QUALIFY FOR 
        ALLSTATE’S EXCITING AWARDS AND RECOGNITION EVENTS
     Regional Honor Ring Banquet
            Hosted by the FVP and AFVP ‐ Additional details will be shared with you by your region
     President’s Conference
            Company‐wide conference trip with spouse or guest
            Company wide conference trip with spouse or guest
     Chairman’s Conference
            Company‐wide conference trip with spouse or guest
     Chairman’s Inner Circle
            Add‐on trip to Chairman’s Conference with spouse or guest
     Leaders Forum
            Business meeting for top agency owners to network, share a wealth of ideas and learn 
            from the “best of the best”

     Short‐term/local promotions may be available throughout the year




15
Key Events Review 

         Step 1                          Step 2                          Step 3                          Step 4

Program Review
P        R i                    Program Requirements
                                P          R    i               Agency Sale Process
                                                                A       S l P                   Final Steps
                                                                                                Fi l S
• After buyer has identified    • Take the Agent Selection      • Negotiate and finalize the    • Complete the Education 
an agency for sale and          Questionnaire (ASQ)             terms of the sale with the      Program
started preliminary sale        • Pass the background           seller                          • Complete the assignment 
discussions, buyer should 
discussions buyer should        screening                       • Make financing
                                                                  Make financing                of commissions paperwork 
                                                                                                of commissions paperwork
meet with a Field Sales         • Find an agency location       arrangements, if necessary      if applicable
Leader (FSL).  FSL will         and get approval from FSL       • Make arrangements for         • Provide the region with 
provide an overview of the                                      furniture, equipment, and       proof of Errors and 
EA Program and buyer            • Complete the capital 
                                requirements worksheet
                                requirements worksheet          supplies, if necessary
                                                                  pp ,               y          Omissions insurance and 
requirements                                                                                    Worker’s Compensation 
• Review the EA Agreement       • Complete a business plan
                                                                                                insurance, as well as direct 
and Supplement, EA              • Obtain licenses and sign                                      deposit forms
Manual and Reference            the Letter of Understanding 
Guide                                                  g
                                for securities licensing
• Review the Cash Flow          • After successfully 
Models                          completing the previous 
                                steps, buyer and seller will 
                                receive preliminary 
                                approval to continue with 
                                         l               h
                                the sale process


16
Start‐Up Agencies – Additional Incentives

     INCENTIVES FOR START‐UP AGENCIES

     •   Agency Establishment Bonus
         Agency Establishment Bonus
     •   Agency Development Bonus I
     •   Agency Development Bonus II
     •   Agency Performance Profile Agency Bonus
                   f            fl
     •   Branded Retail Environment
     •   Agency Choice Technology (ACT) Allowance




17
Tier Structure for Incentive Compensation

     USE OF TIERS
       Four tiers based on P&C performance in relation to your cash flow 
       Four tiers based on P&C performance in relation to your cash flow
           Tier 1: at least 225% of your baseline cash flow
           Tier 2: 150% to 224% of your baseline cash flow
           Tier 3: 90% to 149% of your baseline cash flow
           Tier 4: <90% of your baseline cash flow


       Tiers are determined monthly




18
Agency Establishment Bonus

     AGENCY ESTABLISHMENT BONUS
       Bonus payout is based on your tier
             p y                y

       Your tier will be based on your cumulative production in months 1 – 3 relative to 
       your baseline cash flow for months 1 – 3
           Tier 1: $10,000
           Ti 1 $10 000
           Tier 2: $7,500
           Tier 3: $5,000
           Tier 4: $0
           Tier 4: $0

       Agency Establishment Bonus will be paid in month 4 of affiliation




19
Validation Requirements

     VALIDATION REQUIREMENTS
       Two production requirements (one for Property & Casualty  P&C, and one for 
       Two production requirements (one for Property & Casualty – P&C, and one for
       Allstate Financial – AF) need to be achieved within the first 6 months of agency 
       affiliation
           The P&C requirement is derived from your baseline cash flow
             – The minimum P&C requirement is 90% of the baseline cash flow (Tier 3 level)
                The minimum P&C requirement is 90% of the baseline cash flow (Tier 3 level)
           The Allstate Financial requirement is $5,000 or more in Allstate Financial production 
           credit

       Additional validation will occur at month 12 of affiliation
        dd      l ld           ll              h     f ff l
           The minimum P&C requirement is 90% of the baseline cash flow (Tier 3 level)

       All validation requirements are conditions of the agency owner relationship. Failure 
       All validation requirements are conditions of the agency owner relationship. Failure
       to meet the validation requirements will lead to termination of the Agency 
       Agreement.




20
Agency Development Bonus I

     AGENCY DEVELOPMENT BONUS I (ADB I)
            ADB I is eligible to be earned in production months 1 ‐ 36*
                        g                     p
            ADB I is eligible to be received/paid in months 2 – 37* of affiliation
            Based on your tier for a given month, a bonus rate (see next slide) will be applied 
            to your current month’s net new P&C written premium to determine a bonus
            See next slide for bonus rates by tier and month
            S          lid f b              b i       d     h




     * ADB I will also be paid in months 38-49 for any month you achieve Tier 1 status during months 37-48; ADB I will also be paid in months
     38-43 for any month you achieve Tier 2 status during months 37-42


21
Agency Development Bonus I, Continued

     AGENCY DEVELOPMENT BONUS I (ADB I) SCHEDULE




22
Agency Development Bonus II

     AGENCY DEVELOPMENT BONUS II (ADB II)

             ADB II is eligible to be earned in production months 2 ‐ 37*
             ADB II is eligible to be received/paid in months 4 – 39* of affiliation
             Based on your performance tier for a given month, a dollar amount (see next 
             slide) will be applied to your current month s P&C Policy in Force (PIF) Used for 
             slide) will be applied to your current month’s P&C Policy in Force (PIF) Used for
             Bonus figure – special rules apply when this figure is negative 
             See next slide for dollar amounts by tier and month




     * ADB II will also be paid in months 40-51 of affiliation for any month that Tier 1 status is achieved in production months 38 -49: ADB II
     will also be paid in months 40 – 45 of affiliation for any month that tier 2 is achieved in production months 38 - 43


23
Agency Development Bonus II, Continued

     AGENCY DEVELOPMENT BONUS II (ADB II) SCHEDULE




24
Resources for Growth – Start‐up Agencies

     RESOURCES FOR GROWTH IS DESIGNED TO REWARD AGENCIES THAT 
       ACHIEVE BALANCED PERFORMANCE
      Agency performance is measured on four key business objectives: Retention, Acquisition, Allstate Financial 
      Production Credit and Agency Loyalty Index
      Agency results are matched to goals established for each measurement category and points are earned 
      based on those results (based on 10.5 point scale)
             Retention results are based on Standard Auto Retention % 
             Acquisition results are based on a combination of Personal Auto New Issued Items and Emerging Business New Issued 
             Items 
             Allstate Financial Production Credit results are based on total YTD Production Credit (reduction for not meeting 
                p
             Expected Results))
             Agency Loyalty Index results are based on the annual Agency Loyalty Index score 
      Points are distributed across six Resources for Growth tiers
             Platinum (7.5 – 10.5 points)
             Gold (6.0 – 7.4 points)
             Silver (5.5 – 5.9 points)
             Bronze (2.5 – 5.4 points)
             Standard (0.1 – 2.4 points)
             Base (0 points or less)
      Resources for Growth tiers will be used across multiple programs including the Agency Bonus, Awards and 
      Resources for Growth tiers will be used across multiple programs including the Agency Bonus Awards and
      Recognition, Expected Results, and qualification for other business opportunities 


25
Agency Performance Profile Agency Bonus

     AGENCY PERFORMANCE PROFILE AGENCY BONUS
       Agency Bonus for agency owners with 36 months or less of affiliation is 
       determined by performance on the Agency Performance Profile measurement 
       system
           Calculated as a % of total P&C written premium
           Annual bonus, with the bonus period running from January through December of 
           Annual bonus with the bonus period running from January through December of
           calendar year
           Bonus is paid after the end of the calendar year

       Agency Performance Profile measurement system for agency owners with 36 
       Agency Performance Profile measurement system for agency owners with 36
       months or less of affiliation who are eligible for Start‐up Agency incentive 
       compensation is built on three independent measurement categories:
           Retention
           Policy growth over cash flow policy growth goal and Emerging Business new issued 
           items
           Allstate Financial production credit




26
Allstate Support 

     YELLOW PAGES AND CO‐OP

            Yellow Pages: First year of advertising in the Yellow Pages will be paid by Allstate 
            (approximately $2,500) only when placed through Berry Network

            Co‐op: Receive up to 50% reimbursement for company‐approved advertising
                   Receive up to 50% reimbursement for company‐approved advertising 
            expenses per year (up to $4,500 for first‐year Start‐up Agencies); actual Co‐op 
            allowance may vary by agent




     * In the states of Illinois, Alaska, and Hawaii, the non-cash award is valued at a different amount

27
Allstate Support, Continued 

     BRANDED RETAIL ENVIRONMENT (BRE)
       Design your office to leverage the strength of the Allstate brand and to help 
       enhance your customer’s experience
       Includes furniture, lighting, signage, sales displays and choice of either a beacon 
       sign or reception desk
       In order to receive a $3,300* non‐cash award, you must participate in the BRE 
       In order to receive a $3 300* non cash award you must participate in the BRE
       Welcome Suite Plus Package program

     AGENCY CHOICE TECHNOLOGY (ACT)
                              (   )

       ACT: Provides you flexibility to lease/purchase technology (within Allstate’s 
       specifications) that meets your unique needs
       You select the technology vendor for installation and support; you may use any 
       You select the technology vendor for installation and support; you may use any
       vendor of your choice.




28
Receive Support from Allstate 

     TO HELP YOU MEET BUSINESS OBJECTIVES, YOU’LL HAVE SUPPORT FROM A 
      FIELD SALES LEADER

      Sales and marketing processes
      Results review
      Ongoing education
      Ongoing education
      Business Results Consultation




29
This overview is confidential and proprietary information which is the exclusive property of Allstate Insurance Company and its affiliates, and 
    subsidiaries, including Allstate Life Insurance Company (the “Company”), and may not be disclosed to third parties, other than outside advisors or 
    as required by law, without first having obtained written permission from Allstate Insurance Company.  

    Securities offered through Allstate Financial Services, LLC (LSA Securities in LA and PA). 
                            g                                   (                           )
    Registered Broker‐Dealer.  Member FINRA, SIPC.  Main Office: 2920 South 84th Street, 
    Lincoln, NE 68506.  877‐525‐5727.  

    Commission and bonus amounts are subject to change.
    Allstate is an Equal Opportunity Company.

    For more information, contact Allstate toll‐free at 877‐258‐9012, or visit allstateagent.com.

    ©2010 Allstate Insurance Company.  allstate.com 




R27434-2

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EA Opportunity Overview

  • 1. Choose your own direction Building a business as an Allstate Exclusive Agent R27434-2
  • 2. Building a Business As an  Building a Business As an Allstate Exclusive Agent The following overview highlights the R3001 Agency opportunity.* Agency owners  are independent contractors and are not employees of Allstate.  Multiple factors  are independent contractors and are not employees of Allstate. Multiple factors contribute to the success of an Allstate Agency.  As such, individual results will vary.  All information, including bonus, revenue, compensation, and education information  is subject to change. See the R3001 Exclusive Agency Agreement, the Exclusive Agency Independent  Contractor Manual, the Exclusive Agency Independent Contractor Reference Guide,  the Supplement for the R3001 Agreement, and the Allstate Agency Standards for full  details.   details * Excludes New Jersey 2
  • 3. Allstate – Our Shared Vision Our Purpose We are the Good Hands:  We help people realize their hopes and dreams through  We are the Good Hands: We help people realize their hopes and dreams through products and services designed to protect them from life’s uncertainties and to  prepare them for the future. Strategic Vision To reinvent protection and retirement for the consumer. Our Values Honesty, caring and integrity Inclusive diversity I l i di i Engagement Accountability Superior performance Superior performance Corporate Goal We will grow the value of our company for our customers, our associates, our  shareholders, our communities and society. shareholders our communities and society 3
  • 4. Join an Industry Leader ENJOY THE BENEFITS OF WORKING WITH ALLSTATE Allstate provides you with support that is among the best in the industry p y pp g y High brand‐name recognition A comprehensive education program Unlimited money making potential Unlimited money‐making potential Ownership of the economic interest in the book of business your agency writes Customer Information Center (CIC) provides after hours support for your agency One of the largest teams of centralized claims professionals in the country with 24 x 7  One of the largest teams of centralized claims professionals in the country with 24 x 7 support Marketing materials designed to help you generate revenue for your agency A customizable company website to help drive clients to you A customizable company website to help drive clients to you An exciting awards and recognition program that rewards you for achieving business  objectives established by Allstate Support from Allstate s field sales leadership group Support from Allstate’s field sales leadership group Potential to own multiple locations 4
  • 5. Getting Started WHAT YOU NEED TO SUCCEED AT ALLSTATE Requirements Available start‐up capital to meet cash flow market requirement (minimum $50,000) A il bl i l h fl k i ( i i $50 000) P&C and Life/Health licenses Financial Industry Regulatory Authority (FINRA) Series 6 license (and Series 63 license if  required by state law), which will need to be obtained within a certain time after agency  appointment Characteristics  Networks proactively et o s p oact e y Projects persuasive and professional presence Makes quality decisions Drives for results and profitability Focuses on relationship building Focuses on relationship building Supports the Allstate vision and purpose Creates strategic business solutions Adapts to changing conditions Works effectively Works effectively Leads and motivates staff 5
  • 6. Navigating Your Business Options DECIDE HOW TO RUN YOUR BUSINESS With the option of purchasing an existing Allstate Agency, you have the advantage of  buying a business that s already up and running.  There are different bonus and incentive  buying a business that’s already up and running There are different bonus and incentive opportunities available depending on whether the agency has less than 750  policies/$800,000 premium or more than 750 policies/$800,000 premium. Becoming an Allstate Exclusive Agent… Starting a Purchasing an new agency agency from an from scratch existing Allstate g Exclusive Agent Less than 750 L th More than 750 M th policies/$800,000 policies/$800,000 6
  • 7. Evaluating Your Business Options CONSIDERATIONS AS YOU EVALUATE THE OPPORTUNITY TO BUY AN  EXISTING ALLSTATE AGENCY What is the business environment? What are the financial results of the agency? Is the agency an efficiently operated business? Do I have sufficient liquid capital to invest in growing the business? Will I be able to secure financing if needed to purchase the book of business? Will agency staff be retained after the purchase? What is the value of the agency? Wh i h l f h ? What staffing issues exist? Will the existing location be maintained after the agency purchase? What factors may affect the retention of customers in the book of business? Wh t f t ff t th t ti f t i th b k f b i ? What legal issues should be considered? What is the market opportunity to grow the business? Will you retain the existing technology after purchasing? Will you retain the existing technology after purchasing? 7
  • 8. OTHER BUSINESS CONSIDERATIONS DECIDE HOW TO RUN YOUR BUSINESS Understand your location options Maintain existing location Establish a new location Relocate an existing agency Branding your agency Develop your business plan Operating Staffing Business Processes Marketing Demographics Lead Generation Advertising Financial Cash Flow Projections Cash Flow Projections Production goals and expenses 8
  • 9. Branding Your Business  YOUR AGENCY’S IMAGE First impressions count and that goes for your office space as well.  The Allstate  Branded Retail Environment (BRE) ensures that, as customers drive by or walk up  ( ) and enter your agency, they’ll feel confident that they’ve come to the right place  for their insurance needs. The look helps promote a positive customer experience  and create a positive, inviting work environment. and create a positive, inviting work environment. To view all options and pricing, please visit the BRE Website at  www.brandyouragency.com 9
  • 10. Education and Support ALLSTATE PROVIDES EDUCATION TO HELP YOU GET AHEAD Allstate provides an education program on Allstate’s products, recommended  sales techniques and processes  sales techniques and processes Program is approximately 5 weeks Education is conducted regionally and at Allstate’s National Sales Education Center  (NSEC)  Program includes Auto, Property, Financial and Run the Business track which is   P i l d A t P t Fi i l d R th B i t k hi h i designed to help with the set up and operational side of your agency Once you have Successfully completed the Education Program, you will receive  a $3,000 bonus payable in first month of the R3001 Agreement ONGOING CONSULTATIVE SUPPORT FROM A FIELD SALES LEADER Sales and marketing processes Results review R l i Ongoing education Business results consultation 10
  • 11. Commissions Structure P&C COMMISSIONS SCALE Commission Amount by Line* New % Subsequent  renewal % Auto, Standard 10 10 Motorcycle 10 10 Off road Vehicle 10 10 Auto, Non‐Standard 8 8 Personal Property 10 10 Boat 10 10 Landlord Package g 10 10 Manufactured Home 10 10 Personal Umbrella Policy 10 10 Condo and Renters 10 10 Commercial, Nonfleet 10 10 Commercial Casualty ‐ Fleet 10 10 Commercial Casualty – all Other First $2,500 First $2 500 20 10 Over $2,500 12 10 * Excludes state exceptions 11
  • 12. Allstate Financial Opportunity ALLSTATE LIFE AND FINANCIAL PRODUCTS Our extensive portfolio includes term and permanent life, annuities and variable  products Allstate offers the opportunity to write Life and Financial Products by either: Partnering with an Exclusive Financial Specialist (EFS)*, a specialist in life, savings and  financial products ( Shared Business) financial products (“Shared” Business).  Write life and financial products on your own (“Solo” business) Ability to earn credit towards production goals, bonuses and awards Allstate Financial enhanced commission scales are based on your productivity – the  more you write, the higher the commission scale *known as Financial Specialists in NY 12
  • 13. Resources for Growth – Established Agencies  RESOURCES FOR GROWTH IS DESIGNED TO REWARD AGENCIES THAT  ACHIEVE BALANCED PERFORMANCE Agency performance is measured on five key business objectives: Retention, Acquisition, Profitability, Allstate  Financial Production Credit and Agency Loyalty Index Agency results are matched to goals established for each measurement category and points are earned  based on those results (based on 10.5 point scale) Retention results are based on Standard Auto Retention %  i l b d S d d i % Acquisition results are based on a combination of Personal Auto New Issued Items and Emerging Business New Issued  Items  Profitability results are the better of total casualty 12MM or 24MM adjusted paid loss ratio Allstate Financial Production Credit results are based on total YTD Production Credit (reduction for not meeting  Expected Results) Agency Loyalty Index results are based on the annual Agency Loyalty Index score  Points are distributed across six Resources for Growth tiers Platinum (7.5 – 10.5 points) Gold (6.0 – 7.4 points) G ld (6 0 7 4 i t ) Silver (5.5 – 5.9 points) Bronze (2.5 – 5.4 points) Standard (0.1 – 2.4 points) ( p Base (0 points or less)) Resources for Growth tiers will be used across multiple programs including the Agency Bonus, Awards and  Recognition, Expected Results, and qualification for other business opportunities  13 *Start-up agencies have a different measurement – see page 25
  • 14. Benefits For High Performance GROWING A PROFITABLE AGENCY WITH HIGH LEVELS OF CUSTOMER LOYALTY  AND SATISFACTION Executive Advantage  Brings together additional resources that can help brand, grow and manage your  business.  Centralizes many resources agencies use today to market and manage their businesses  into one Intranet‐based Gateway site called the Executive Advantage Resource Center Premier Service Agency High value web leads from www.Allstate.com Priority placement on the Agency Locator PSA Logo placed on the agency website Executive Advantage boost Customer Focused Acquisition Customer Focused Acquisition Enables small/medium‐sized agencies to purchase economic interest in a small book of  business and consolidate it with their existing book Designed to help high‐performing trajectory agencies achieve scale towards the ideal  agency model by providing inorganic growth opportunities d lb idi i i h ii 14
  • 15. Awards and Recognition AS AN EXCLUSIVE AGENT, YOU’LL HAVE THE OPPORTUNITY TO QUALIFY FOR  ALLSTATE’S EXCITING AWARDS AND RECOGNITION EVENTS Regional Honor Ring Banquet Hosted by the FVP and AFVP ‐ Additional details will be shared with you by your region President’s Conference Company‐wide conference trip with spouse or guest Company wide conference trip with spouse or guest Chairman’s Conference Company‐wide conference trip with spouse or guest Chairman’s Inner Circle Add‐on trip to Chairman’s Conference with spouse or guest Leaders Forum Business meeting for top agency owners to network, share a wealth of ideas and learn  from the “best of the best” Short‐term/local promotions may be available throughout the year 15
  • 16. Key Events Review  Step 1 Step 2 Step 3 Step 4 Program Review P R i Program Requirements P R i Agency Sale Process A S l P Final Steps Fi l S • After buyer has identified  • Take the Agent Selection  • Negotiate and finalize the  • Complete the Education  an agency for sale and  Questionnaire (ASQ)  terms of the sale with the  Program started preliminary sale  • Pass the background  seller • Complete the assignment  discussions, buyer should  discussions buyer should screening • Make financing Make financing  of commissions paperwork  of commissions paperwork meet with a Field Sales  • Find an agency location  arrangements, if necessary if applicable Leader (FSL).  FSL will  and get approval from FSL • Make arrangements for  • Provide the region with  provide an overview of the  furniture, equipment, and  proof of Errors and  EA Program and buyer  • Complete the capital  requirements worksheet requirements worksheet supplies, if necessary pp , y Omissions insurance and  requirements Worker’s Compensation  • Review the EA Agreement  • Complete a business plan insurance, as well as direct  and Supplement, EA  • Obtain licenses and sign  deposit forms Manual and Reference  the Letter of Understanding  Guide g for securities licensing • Review the Cash Flow  • After successfully  Models completing the previous  steps, buyer and seller will  receive preliminary  approval to continue with  l h the sale process 16
  • 17. Start‐Up Agencies – Additional Incentives INCENTIVES FOR START‐UP AGENCIES • Agency Establishment Bonus Agency Establishment Bonus • Agency Development Bonus I • Agency Development Bonus II • Agency Performance Profile Agency Bonus f fl • Branded Retail Environment • Agency Choice Technology (ACT) Allowance 17
  • 18. Tier Structure for Incentive Compensation USE OF TIERS Four tiers based on P&C performance in relation to your cash flow  Four tiers based on P&C performance in relation to your cash flow Tier 1: at least 225% of your baseline cash flow Tier 2: 150% to 224% of your baseline cash flow Tier 3: 90% to 149% of your baseline cash flow Tier 4: <90% of your baseline cash flow Tiers are determined monthly 18
  • 19. Agency Establishment Bonus AGENCY ESTABLISHMENT BONUS Bonus payout is based on your tier p y y Your tier will be based on your cumulative production in months 1 – 3 relative to  your baseline cash flow for months 1 – 3 Tier 1: $10,000 Ti 1 $10 000 Tier 2: $7,500 Tier 3: $5,000 Tier 4: $0 Tier 4: $0 Agency Establishment Bonus will be paid in month 4 of affiliation 19
  • 20. Validation Requirements VALIDATION REQUIREMENTS Two production requirements (one for Property & Casualty  P&C, and one for  Two production requirements (one for Property & Casualty – P&C, and one for Allstate Financial – AF) need to be achieved within the first 6 months of agency  affiliation The P&C requirement is derived from your baseline cash flow – The minimum P&C requirement is 90% of the baseline cash flow (Tier 3 level) The minimum P&C requirement is 90% of the baseline cash flow (Tier 3 level) The Allstate Financial requirement is $5,000 or more in Allstate Financial production  credit Additional validation will occur at month 12 of affiliation dd l ld ll h f ff l The minimum P&C requirement is 90% of the baseline cash flow (Tier 3 level) All validation requirements are conditions of the agency owner relationship. Failure  All validation requirements are conditions of the agency owner relationship. Failure to meet the validation requirements will lead to termination of the Agency  Agreement. 20
  • 21. Agency Development Bonus I AGENCY DEVELOPMENT BONUS I (ADB I) ADB I is eligible to be earned in production months 1 ‐ 36* g p ADB I is eligible to be received/paid in months 2 – 37* of affiliation Based on your tier for a given month, a bonus rate (see next slide) will be applied  to your current month’s net new P&C written premium to determine a bonus See next slide for bonus rates by tier and month S lid f b b i d h * ADB I will also be paid in months 38-49 for any month you achieve Tier 1 status during months 37-48; ADB I will also be paid in months 38-43 for any month you achieve Tier 2 status during months 37-42 21
  • 22. Agency Development Bonus I, Continued AGENCY DEVELOPMENT BONUS I (ADB I) SCHEDULE 22
  • 23. Agency Development Bonus II AGENCY DEVELOPMENT BONUS II (ADB II) ADB II is eligible to be earned in production months 2 ‐ 37* ADB II is eligible to be received/paid in months 4 – 39* of affiliation Based on your performance tier for a given month, a dollar amount (see next  slide) will be applied to your current month s P&C Policy in Force (PIF) Used for  slide) will be applied to your current month’s P&C Policy in Force (PIF) Used for Bonus figure – special rules apply when this figure is negative  See next slide for dollar amounts by tier and month * ADB II will also be paid in months 40-51 of affiliation for any month that Tier 1 status is achieved in production months 38 -49: ADB II will also be paid in months 40 – 45 of affiliation for any month that tier 2 is achieved in production months 38 - 43 23
  • 24. Agency Development Bonus II, Continued AGENCY DEVELOPMENT BONUS II (ADB II) SCHEDULE 24
  • 25. Resources for Growth – Start‐up Agencies RESOURCES FOR GROWTH IS DESIGNED TO REWARD AGENCIES THAT  ACHIEVE BALANCED PERFORMANCE Agency performance is measured on four key business objectives: Retention, Acquisition, Allstate Financial  Production Credit and Agency Loyalty Index Agency results are matched to goals established for each measurement category and points are earned  based on those results (based on 10.5 point scale) Retention results are based on Standard Auto Retention %  Acquisition results are based on a combination of Personal Auto New Issued Items and Emerging Business New Issued  Items  Allstate Financial Production Credit results are based on total YTD Production Credit (reduction for not meeting  p Expected Results)) Agency Loyalty Index results are based on the annual Agency Loyalty Index score  Points are distributed across six Resources for Growth tiers Platinum (7.5 – 10.5 points) Gold (6.0 – 7.4 points) Silver (5.5 – 5.9 points) Bronze (2.5 – 5.4 points) Standard (0.1 – 2.4 points) Base (0 points or less) Resources for Growth tiers will be used across multiple programs including the Agency Bonus, Awards and  Resources for Growth tiers will be used across multiple programs including the Agency Bonus Awards and Recognition, Expected Results, and qualification for other business opportunities  25
  • 26. Agency Performance Profile Agency Bonus AGENCY PERFORMANCE PROFILE AGENCY BONUS Agency Bonus for agency owners with 36 months or less of affiliation is  determined by performance on the Agency Performance Profile measurement  system Calculated as a % of total P&C written premium Annual bonus, with the bonus period running from January through December of  Annual bonus with the bonus period running from January through December of calendar year Bonus is paid after the end of the calendar year Agency Performance Profile measurement system for agency owners with 36  Agency Performance Profile measurement system for agency owners with 36 months or less of affiliation who are eligible for Start‐up Agency incentive  compensation is built on three independent measurement categories: Retention Policy growth over cash flow policy growth goal and Emerging Business new issued  items Allstate Financial production credit 26
  • 27. Allstate Support  YELLOW PAGES AND CO‐OP Yellow Pages: First year of advertising in the Yellow Pages will be paid by Allstate  (approximately $2,500) only when placed through Berry Network Co‐op: Receive up to 50% reimbursement for company‐approved advertising Receive up to 50% reimbursement for company‐approved advertising  expenses per year (up to $4,500 for first‐year Start‐up Agencies); actual Co‐op  allowance may vary by agent * In the states of Illinois, Alaska, and Hawaii, the non-cash award is valued at a different amount 27
  • 28. Allstate Support, Continued  BRANDED RETAIL ENVIRONMENT (BRE) Design your office to leverage the strength of the Allstate brand and to help  enhance your customer’s experience Includes furniture, lighting, signage, sales displays and choice of either a beacon  sign or reception desk In order to receive a $3,300* non‐cash award, you must participate in the BRE  In order to receive a $3 300* non cash award you must participate in the BRE Welcome Suite Plus Package program AGENCY CHOICE TECHNOLOGY (ACT) ( ) ACT: Provides you flexibility to lease/purchase technology (within Allstate’s  specifications) that meets your unique needs You select the technology vendor for installation and support; you may use any  You select the technology vendor for installation and support; you may use any vendor of your choice. 28
  • 29. Receive Support from Allstate  TO HELP YOU MEET BUSINESS OBJECTIVES, YOU’LL HAVE SUPPORT FROM A  FIELD SALES LEADER Sales and marketing processes Results review Ongoing education Ongoing education Business Results Consultation 29
  • 30. This overview is confidential and proprietary information which is the exclusive property of Allstate Insurance Company and its affiliates, and  subsidiaries, including Allstate Life Insurance Company (the “Company”), and may not be disclosed to third parties, other than outside advisors or  as required by law, without first having obtained written permission from Allstate Insurance Company.   Securities offered through Allstate Financial Services, LLC (LSA Securities in LA and PA).  g ( ) Registered Broker‐Dealer.  Member FINRA, SIPC.  Main Office: 2920 South 84th Street,  Lincoln, NE 68506.  877‐525‐5727.   Commission and bonus amounts are subject to change. Allstate is an Equal Opportunity Company. For more information, contact Allstate toll‐free at 877‐258‐9012, or visit allstateagent.com. ©2010 Allstate Insurance Company.  allstate.com  R27434-2