Photo of Gonzalo Erroz, Allstate Insurance Co and David Aldred, Citi accepting on behalf of Mark Madeyski.
In order to overcome the complexity Allstate’s treasury team faced in managing the company’s, decentralised process for funding marketing efforts across its large network of agency owners, a declining balance card program was established. Working with Citi Commercial Cards, Allstate developed the Executive Advantage card programme as a means to incent and reward its 10,000 plus agency owners. This is a unique solution in the marketplace today.
Mark Madeyski
Marketing Manager
The Allstate Corporation is America’s largest publicly held personal lines insurer, serving approximately 16 million households through its Allstate, Encompass, Esurance and Answer Financial brand names. Widely known by its slogan “You’re In Good Hands With Allstate®,” Allstate offers insurance products (auto, home, life and retirement) and services through Allstate agencies, independent agencies, and Allstate exclusive financial representatives, as well as via www.allstate.com and 1-800 Allstate®.
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The Citi declining balance cards, which are issued to agency owners, have allowed Allstate to move away from a manual audit and paper check reimbursement process, allowing the company to achieve critical savings, improved agency engagement and more effective budget utilisation. The card programme has also enabled the treasury to centralise the management of suppliers, which in turn supports marketing tactics that maintain compliance, protect consumer privacy, are technically integrated and adhere to Allstate branding standards.
At the same time, the programme establishes benchmarks for performance that non-participating suppliers can use to develop a higher value proposition in order to attain participating status on Allstate’s web portal. According to Mark Madeyski, Marketing Manager, Allstate Insurance Co, “The company’s treasury is now better able to leverage its enterprise scale, enabling supplier price negotiations which resulted in cost savings of 10-15% in 2011, with similar performance improvements projected this year.”
“Overall, the Executive Advantage programme has delivered working capital gains by increasing the spend of our travel and expense commercial card programme, enabling the company to earn additional rebates from the bank,” explains Madeyski.
The programme also improves Days Payable Outstanding (DPO) by paying suppliers for goods and services immediately while paying the bank 30-days after cycle. The Citi declining balance card solution provides a real-time data feed offering visibility into KPI and key spend trends, which allows the treasury to improve its overall decision making process.
The card programme has been equally beneficial to Allstate’s agency owners. Agency owners now have a consistent methodology for measuring year-over-year goals. The card programme also saves agencies time and money by utilising pre-negotiated terms with approved suppliers.
Says Madeyski: “Prior to the implementation of the Executive Advantage programme, Allstate faced a significant challenge from its decentralised marketing processes. With different systems in place, managing the recognition process for agency owners and controlling budgets was difficult at best. A lack of visibility into spend left the company with minimal leverage when it came to negotiating the best terms with its suppliers.”
“Now, near real-time upload of funds to the cards are made when distributing cash. This solution provides a consistent process for the 10,000 plus agency owners to receive and utilise funds. And instead of having 14 different regional marketing teams negotiating with more than 150 suppliers, the treasury has eliminated this wasteful and inefficient practice, consolidating suppliers down to an approved list of 45 businesses that have demonstrated clear value for the company and its agency owners.”
Moreover, the financial gains made possible by this card programme have allowed the treasury to pool capital that is then reinvested, delivering further incentives to the field and an improved customer experience.
