New company could help Allstate keep agents and other business

Besides giving Allstate Corp. more control over prices, North Light
Specialty Insurance Co. could help the parent company retain its agents
and other insurance business.
Unlike an independent insurance agent, who can sell policies from a
number of different companies, Allstate employs what are called captive
agents, who generally sell only the company’s own policies.
That creates a problem when the firm stops writing new homeowners
policies, as it has in Mobile and Baldwin counties. Because most
insurers offer discounts to customers who buy auto or life insurance in
addition to homeowners coverage, Allstate agents have to work harder to
win new business, and could have trouble keeping the business of people
who lost wind coverage.
Companies that have cut homeowners coverage have seen agents defect,
some taking customers with them to new insurers. For example, some
Baldwin County agents left Alfa Mutual Insurance after it cut back.
Captive agents can sell policies from the Alabama Insurance Underwriting
Association, the state insurer of last resort known as the beach pool.
And Allstate has also allowed local agents to sell policies from GeoVera
Insurance Co., a California-based surplus lines company, said Allstate
spokesman Shane Robinson.
But with North Light, Allstate can keep that wind coverage for itself,
and retain agents who sell profitable auto and life policies, said Amy
Bach, head of United Policyholders, a consumer group.
“They don’t want to lose their market share,” she said. “Obviously, the
agent factor is a big part of this.”