Posted On: July 3, 2009, 4:51 pm CDT

Posted By: Sheltowee

Again Farmers is going to find out that people over all prefer a local office that just so happens to be the responsibility of the agent to finance. Either they will invest in paying all the expense to open local offices in every town and higher licensed employees or they might find it cheaper to pay the commissions and let the agents finance it. Not to mention the agents pay for nearly all of the local advertising and community involvement.

Now how are they going to do this for less then what the already pay their agents?

What should happen is that Farmers will get more efficient and will be required to lower the number of internal administrative posistions. I believe that Farmers has created too many posistions that don't amount to anything more then just a stepping stone for folks, while they are working on an MBA or not much of anything that really has any effect on productivity or profitability. They could save millions of dollars on paper waste alone.

What will happen in the insurance industry, as far as regulation goes, is that a company will have to be more efficient, very large ($2 billion and greater), with stable or better financial forecast, with Fed supervision on investment practices using insurance premiums. In other words, the insurance companies won't have free reign in what they choose to invest in and with what. The feds will set the investment model. NO MORE MA & PA MUTUAL COMPANIES. NO MORE NON-ADMITTED CARRIERS.

BOTTOM LINE. Farmers could get rid of all of their agents but they would still be unprofitable for the simple fact that this ain't the problem.