Posted by: Billy R. Williams Ph.D. | January 28, 2010

The line between employee, independent contractor, and possible future franchisee seems to blur more each day for captive agents.

The line between employee, independent contractor, and possible future franchisee seems to blur more each day for captive agents. Though my blog today discusses the captive agency force, rest assured it is an industry wide scenario.

Captive insurance companies must do a better job of balancing the liability ramifications of managing a super-sized sales force with the promise that was made to the captive agent that they would have the autonomy to be an independent business owner. 

The 2010 Allstate Agency Standards specifically states that “All business emails must be sent from the agency owner’s or agency employees Allstate provided email address. E-mails to customers or prospective customers must not be sent from email accounts not provided by Allstate.” There is other language that limits the ability of the independent contractor agent to use certain vendors, and tools to grow their business.

 Most captive agents bought the dream that they could write their own ticket to success by working harder, being more creative, and deploying a variety of tools and processes that would allow them to generate above average sales. Now many of them are discovering that the freedom that they thought came with being an independent contractor versus an employee is slowly slipping away.

 When you slip away from one thing, it means you are slipping toward something else. Is that something else a franchise model? Personally I think a franchise model would be the best fit for both corporate and the agent. It would give corporate the legal right to control every aspect of an agency, while giving the agent the step by step plan that many of them need to be successful.

 By now you are probably asking “Billy Williams, why do you care?”

Here’s why: My investment company has provided resources to some of these agents, and Inspire a Nation Business Mentoring has provided training to 1000’s of agents since 2008 by way of our Agent Success Mentoring Membership Program, and our paid and free webinar training. So you see I have a financial and professional interest in the decisions that corporate makes that impact the agents we support.

  What I hate to see is an agent find a vendor or solution that really does give them an advantage over their competition (which often includes other agencies that are part of the same captive organization) only to be told by corporate that they can’t use it anymore, not because it is not effective, and not because it is out of compliance, but because corporate has worked out a deal with a vendor that often delivers an inferior product or service, and that is often more expensive than the version the independent contractor agent located on their own.

 There has always been an unwritten rule that independent captive agents could open up another branding, marketing, and advertising avenue by “self branding.” This means they used their non corporate issued email addresses, websites, social networking, and advertising to attract customers that may not normally contact them through traditional corporate based marketing programs. It was understood that if an agent decided to open this avenue they could not use the trademarks, logo, phone number, email address, or any other item that connected them to the captive carrier. For the agent it generally produced an increased marketing footprint. If you take the Allstate Agency Standards literally, that avenue could be in jeopardy.

 Who knows where all this will end up? I certainly don’t, but I can promise our member agents this:

As the line blurs between employees, independent contractors, and possible franchise status for captive agents, Inspire a Nation will always be on the cutting edge of identifying and training agents (and often their corporate reps) on the latest technologies, tools, and processes that an agent can use to be more successful, and compliant regardless of the limitations and restrictions placed on the agent  

 I welcome any comments, feedback and discussion related to this topic (good or bad)


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