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Allstate Agency Count Fell 15% In Past Year Amid Overhaul

By Erik Holm, Of DOW JONES NEWSWIRES

NEW YORK -(Dow Jones)- Allstate Corp.'s tally of its agencies fell 15% over the past year, a decline that coincided with the insurer's effort to overhaul agent compensation and provide funding to urge agencies looking to merge.

The insurer's network of so-called "exclusive agencies" fell to about 10,000, a decrease of about 1,500 since the last time the company released its annual financial filing. Its current annual financial filing was released Wednesday. Those agents sell Allstate-branded home, auto and life-insurance products almost exclusively.

The reduction comes as Allstate has ramped up an initiative to provide loans to its more successful agents to help them buy up smaller agencies and take over the client lists of those agencies.

The company is also planning an overhaul of its agent compensation structure that's designed to increase bonuses for its best agents while pushing the least- successful ones out the door by cutting base pay.

The proposed changes prompted an uproar among agents who were concerned about whether they would be among the group that would see their compensation fall. The company partly backed off its plan in December, saying it would cut base pay for agents to 9% from the current 10%. It had initially proposed cutting the base pay to 8%.

Allstate says the money saved on base pay will go to fund an increase in bonuses from agents that hit performance targets. The company says the changes will be implemented in 2013.

Allstate's exclusive agencies provide about 86% of the premiums for the company's home and auto unit, its largest segment.

The number of independent agencies, which sell Allstate policies in addition to offerings from other insurers, fell by about 100 to roughly 4,400 agencies.

-By Erik Holm, Dow Jones Newswires; 212-416-2892; erik.holm@dowjones.com

--Liz Moyer contributed to this article.

  (END) Dow Jones Newswires
  02-22-121052ET
  Copyright (c) 2012 Dow Jones & Company, Inc.