Allstate Goes Toward the ’Lite
Behemoth Allstate Partners with Safelite
by Penny Stacey
For years rumors have circulated throughout the industry that Allstate
was moving its glass claims business to Safelite Solutions. So on July
22 when the company announced it was making such a move, eyebrows were
raised; eyes were rolled; and many asked, “is it true?”
This time, it was.
Allstate officially announced it with a simple, straightforward note:
Effective January 1, 2012, Allstate will be utilizing Safelite Solutions
for the administration of its glass repair and replacement claims. As
a valued participant to the Allstate Glass Network administered by LYNX
Services, we would like to thank you for your service to our mutual customers.
In a follow-up interview with AGRR™ magazine, Allstate spokesperson April
Eaton offered a bit of insight into the move, and said it came as the
result of a “competitive bid process.”
“On a regular basis Allstate reviews our supplier services to determine
if there’s a better way for us to do business, enhance customer service,
leverage new technology or reduce costs for those services,” says Eaton.
She declined to comment on how often the Northbrook, Ill.-based insurer
reviews its third-party administrator agreement.
Of course, this is a major coup for Safelite—and company officials no
doubt are aware of this.
“It is a huge honor for all of Safelite that Allstate recognizes the value
our company can provide them, their agents and policyholders,” says Tom
Feeney, Safelite president and chief executive officer (see full interview
with Feeney on below).
Though some were surprised about the July 22 announcement, Safelite Solutions
and Allstate certainly are not strangers. In fact, it was just short of
eleven years ago, in September 2000, that Allstate announced that it was
leaving Safelite Solutions and moving its business to LYNX Services (see
related story in September/October 2000 AGRR™ magazine, page 20).
But the Safelite claims administration company it rejoins now is a very
different animal than it was in 2000. Today, Safelite Solutions claims
to provide third-party administration services to 19 of the top 30 property
and casualty insurance companies in the United States.
A quick scan of the top 25 private passenger automotive insurers in the
United States (based on premiums collected) from the National Association
of Insurance Commissioners (NAIC) reinforces this. It includes a number
of Safelite Solutions insurance partners, including GEICO, Progressive,
Zurich, Liberty Mutual, USAA, Nationwide, Travelers, American Family,
The Hartford, Mercury, Erie, Unitrin and Hanover (just to name a few).
Allstate itself holds 10.2 percent of the U.S. market share for personal
auto insurance, according to the NAIC. It falls only second behind State
Farm—the nation’s largest personal automotive insurer, which reportedly
controls 18.7 percent of the market.
Though State Farm’s glass claims administration remains with LYNX—it only
takes the addition of a few other companies combined with All state’s
10 percent market share to surpass the 18.7 percent market quickly.
So what does this all mean for independent glass shops across the United
States, many of whom look to such networks for referrals? LYNX Services
has been lauded by many independent shops over the years for not having
a retail arm that competes with others on the network. Such is not the
case with Safelite Solutions, which is affiliated with Safelite AutoGlass.
And it’s this affiliation that creates concerns about steering for many
in the industry.
“There will be simply less work because Safelite Solutions is not an external
referral service,” says Neil Duffy, owner of Auto Glass Menders in San
“My concern is that it is more or less a restriction of trade and a monopoly,”
adds James Darienzo, owner of Active Auto Glass in Long Island, N.Y. “We
all know how they work and use scripts to better position themselves with
the consumer. It all comes down to consumer choice, and at this point
in time, they are in the driver’s seat.”
Some weren’t surprised by the partnership, but suggest that Safelite AutoGlass’s
recent emphasis on windshield repair in its commercials (see related story
on page 44) could be related
to the timing—along with a recent emphasis on guaranteed average invoices
in third-party administrator contracts (see related story in May/June
AGRR, page 10).
“I believe that this is tied at the hip with the commercials about repair
and I believe it ties back to the guaranteed average invoice,” says Dave
Zoldowski, president of Auto One in Brighton, Mich. “Because of what I
believe to be this monopolistic hold on the industry, no one from a third-party
administrator standpoint can compete with them.”
“I think it reflects a sign that all insurance carriers and independent
glass retailers should take note of,” says Paul Gross, president of Harmon
Solutions Group. “It reflects a massive consolidation of business into
a single provider that is providing both TPA and retail automotive services.”
Gross says both insurers and retailers should consider what this means.
“Carriers that have got all of their eggs in one basket or those retailers
who are out there operating in the market should take notice of this move,”
he says. “It has a fairly profound impact on the entire industry.”
Darienzo says it’s the last straw in an already-tense business environment.
“I can’t turn around and say that their business model is wrong … However,
this is just going too far at this point,” says Darienzo. “It means everything
for everyone’s business … ”
Though many industry representatives expressed concern and frustration
about what this move could do to their businesses. Eaton says the company’s
policy on consumer choice remains in place.
“Even though we will have a supplier change next year, our policy on glass
service providers has not changed,” says Eaton. “Customers may select
the auto glass service provider of their choice.”
LYNX vice president of strategic development Chris Umble issued the following
statement about the move.
“We are both surprised and greatly disappointed with the announcement
that Allstate made,” says Umble. “We had been privileged to serve them
for 11 years with contract extensions during that time. We are very committed
to continue to serve with distinction through the balance of the contract
Penny Stacey is the editor of AGRR™ magazine.
Inside the Move
Safelite CEO Tom Feeney Discusses Allstate
Safelite president and chief executive officer Tom Feeney took the time
just two weeks after Allstate announced the move of its third-party glass
claims administration business to Safelite Solutions to discuss the change.
AGRR: Will there be any immediate changes for shops that currently
work with Allstate and participate in the company’s program?
Tom Feeney (TF): Allstate has engaged
Safelite Solutions to manage their glass program, and the management of
that program will be similar to the way we manage other glass programs
for the many clients that we serve.
AGRR: Have you all had any discussions about the Key Performance Indicator
program that they had introduced in 2009? Are you able to comment on whether
that will remain in place?
TF: It’s a little bit too early in
the process. The implementation phase is still ongoing right now, as the
program doesn’t start until January .
AGRR: I’m sure your phones will be ringing a bit more once this move
takes place. Are you making any changes to prepare for that?
TF: It’s not going to impact us
that significantly. While we will be hiring some CSRs and technicians,
the number of resources we currently have in place are sufficient to integrate
Allstate into our business. We have been building and investing in all
of Safelite for the last five years and this is just one more building
block that fits into our overall growth strategy. Opening new call centers,
investing in technicians, investing in training programs, enhancing our
supply chain with two new distribution centers and several new and expanded
warehouses—it’s all is part of our overall strategy to grow our business.
AGRR: What should shops that currently work with Allstate, but aren’t
on Safelite’s network, do to make sure they can continue working with
TF: I’m sure that many of the shops
that are on the Allstate network are already part of the Safelite Solutions
network. For those that are not, I’d encourage them to go visit the site
sgcnetwork.com and look at the criteria and file an application.
AGRR: We understand the move takes effect on January 2, but how will
claims that are filed prior to that date, but not fully resolved by then,
be handled? Who should shops contact at that point to resolve them?
TF: That’s another detail that hasn’t
been worked out yet, but I can tell you that we’ll be very cooperative
with LYNX and I’m sure they’ll be very cooperative with us to get the
billing set correctly and make sure the shops are paid for the work and
service they provide. I know Allstate will support that as well. From
the shop’s perspective I think this will be very seamless.
AGRR: When did your discussions with Allstate begin?
TF: Well, I’ve been with Safelite
for 23 years and we’ve been talking to them for all 23 years. I can’t
think of the specific date when we began discussing this with Allstate.
I know the industry was aware that Allstate had issued an RFP [request
for proposals]. We believe very strongly in our value proposition and
all we offer to insurance carriers and their customers as well as commercial
accounts and consumers. The total Safelite value proposition is predicated
on quality service through our Safelite Solutions offering, well-trained
technicians, background checks, drug checks, advanced equipment and supplies,
all backed up with phenomenal technology that enhances the overall customer
experience from the beginning of the call until the end of the process.
It’s a pretty good value proposition that more insurance carriers, fleet
companies and commercial accounts want to take advantage of.
AGRR: This isn’t the first time Allstate and Safelite Solutions have
worked together, and the company had switched to LYNX Services in 2000.
What do you think made them come back around now?
TF: Interesting enough this is the
first time Allstate selected Safelite Solutions. Ten years ago when we
were affiliated with Allstate it really was as a result of the merger
between Vistar and Safelite. This is the first time Allstate has selected
Safelite Solutions and I believe they selected us based on the value we
can provide them, their customers and agents. That value in my mind is
around our award-winning contact centers, the technology we use, the commitment
to delighting customers, the many processes we have to assure that the
customer experience is a very good one.
AGRR: There’s been a lot of talk in the industry about the fact that
Safelite Solutions, through its affiliation with Safelite Auto Glass,
can provide a guaranteed average invoice amount to insurers—do you think
this influenced Allstate’s decision to move?
TF: Pricing is confidential between
us and Allstate. I can’t comment even on whether LYNX could or couldn’t
offer a particular pricing proposal to Allstate. I don’t believe Allstate’s
decision to select Safelite Solutions was predicated on price. I believe
it was predicated on value and all that we can offer them, which, by the
way, includes fraud protection and detection and the many advantages that
accrue to a company like Allstate and its agents. Remember, we have 275
field sales personnel in the various markets that can visit the Allstate
agents. This is all part of our total value proposition.
AGRR: How would you respond to independent shop owners who have been
working with Allstate and fear that that might change now?
TF: I would say to all the independent
shops that they should be focused on delivering quality service, advising
Allstate through their agency force of what they do that’s unique and
how they can provide great service to the customers and let the customer’s
choice be the driving factor. As you know we honor customer choice. We
always have and we believe very strongly in it, and this program will
be no different. Customer choice will be honored.
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No reproduction of any type without expressed written permission.