Posted On: December 17, 2004, 12:05 pm CST

Posted By: Zack

Tom,

Prices are cyclical. Farmers may be high today, but lower tomorrow. (You're probably saying that its been high for far too long..) :)

There was a fundemntal change taking place about 5-6 years ago... Allstate was one of the first companies to use credit scoring.. actually, they developed their own formual way before Farmers got into it. At the same time, State farm started "buying" the best customers from Farmers by offering them much lower prices. How did they do this? they priced their product to actually lose money. But not a problem for state farm, cause their surpluss is so big... So what happened?

Farmers got left with the crappy drivers, so rate indications said let's raise prices. Unfortunatly, when you group the few good ones with the masses of bad ones, the good ones pay a lot and they eventually leave.

Yes, it took sime to to get this thing corrected. Is it over? not yet. Farmers lost a lot of their best clients. Agents lost a lot of their loyal customers.

But like any other business cycle, it will come back.

The problem here is that the Agents want to blame the company without understanding the dynamics of what is going on with the big picture.
Did the company act too late? Absolutely.
Do the agent have a right to get made? Absolutely.

Will whining make things better? Never

What can we do to move forward? Do what is in your power to sell what you have. And if you don't think you have something, then go do something else.