Farmers Insurance

[sacman]

Greg-

I re-started this thread because I'm new to the board and read through a bunch of old posts, and this one caught my attention, being an ex-FIG agent.
You are absolutely correct on your interpretation of the contract. You cannot solicit, accept or service policyholders at the time of your departure. Farmers has become VERY vigilant in sueing agents that violate any portion of the non-compete. Having a signed form from clients stating that they were not solicited is worthless and meaningless. If even suspected of doing so, Farmers will stop paying your contract value as well as sue for damages. Some states have less restrictive laws regarding non-competes, but you still need to defend yourself in the lawsuit, which means attorney fees.
Personal experience speaking.
Yes, I was sued by Farmers for accepting business even though I never solicited anybody.

[FFA]

With what they have coming forward in Illinois (Next Gen 2, Cant say what going to happen with rates, Changing their software with out notice or training to the field), Its not really surprising. With Agent Moral being as low with attrition being as high, its not a wonder why this has come back to life.

30/60 is long gone.

[d's insurance store]

"How are they still around...?" asks KevinRaz? Probably inertia or a relationship with the particular agent that cements the policies and prevents shopping around by the client. Anybody in the retail insurance business has clients that will stick almost forever and if they're happy and unruffled, they just keep paying their premium and enjoy the ride.

Eleven+ years ago I left the captive world with one of the other big three, and I was sure that those that I could better would come back to me, especially if the rate differential was substantial. I was shocked and dismayed when many of my former clients elected to stay with the existing carrier with a variety of excuses...no time to sign new papers, unsure of the independent carriers I represented, happy with the current carrier-familiar with their billing and claim set up, and so on and so on. I made the mistake of elevating myself in my clients mind as being very important when it came to insurance. What I learned was that I made myself a legend in my own mind, and my involvement in their insurance lives was nowhere near as important as I thought.

My agency has flourished since then and so life goes on...it just came as a big surprise to me that many of the clients who flat out insisted the only reason they stayed with the former carrier was my being the agent, elected to remain with that carrier when I could offer options that were often better.

[aifs]

I agree with you D'. As long as the customer is complacent and is not too irritated with the actions of their insurance company, the big captive insurance companies will continue to exist. However, I do believe that this type of loyalty is slowly eroding as more and more customers utilize the internet and insurance companies continue to make it easier to change. Funny thing: insurance companies advocate that their products should not be treated as commodities, but yet, market them as such.

On another note, I would say that Farmers and Allstate are twins in regard to hiring and training agents and the terminology they use. I guess if it ain't broke, don't fix it.

[sacman]

I agree also.

When I left, I had many customers that chose to follow me. I was surprised by some of the people that showed loyalty to me and suprised by others that showed loyalty to the company. I am also fully aware that a couple of the agents that inherited some of my policies were backstabbing and slandering me. I have a very strong percentage of my old agency back, but I still solicit the remainder. Even after 3 years, I write a household or two from my old agency every month. In fact, last year I wrote 100% of my old Farmer clients that responded to my solicitations.
Those that I get now all say basically the same thing. I've been thinking of calling you, but it's just been easier to pay the current invoice than going through the process of switching, until................rate increases, claims, billing issues, servicing errors, etc. There is always a catalyst now for the client contacting me. It's not about loyalty now, its because something happened and they are fed up. That is why I continue to send them postcards. Sooner or later, each one will get to that point.
I have very little trouble taking clients from the large captive companies. usually offering better coverage and lower rates. But until each customer hits their own breaking point, they will continue their loyalty to the company.

[kevinraz]

FFA - it's morale, not moral. Learn grammar and spelling and use words correctly even in internet posts. Big difference in words here.

Another rant about words to everyone else: know the difference between loose and lose. Loose is when something that was once tight is no longer such: I loosened a knot. To lose means to no longer have something that you once possessed: I am tired of losing business to my competitors. Way, way too often insurance folk say "I'm loosing business".

I found out recently that one of my old FIG clients is still with them now 12 years after I've left. He said the same thing - it's just easier to pay the bills than switch to someone else. In a way it made me feel good about my sales skills back then since I was able to talk him into giving me an appointment.

As for the rest: does anyone know what their market share is now? When I was with them they boasted of being the third largest insurer of autos & homes in the US. Now with Geico being so huge I imagine they are down but I'd guess still in the top 10.

[sacman]

Kevin-

They are claiming once again that they are the third largest. I know that they dropped down a spot or two a couple of years ago. However, they now include their purchased business of Bristol West and AIG/21st in their calculation.
I don't know what the year end 2009 numbers are, but I was told by Farmers agent friend that during the first 6 months of 2009 they lost over 755,000 Farmers branded policies.

[redondobroker]

25% increase in rates huh? THANK GOODNESS. You all have been writing older 1950 apartments for FREE since 2005. Maybe now you'll be able to payoff those MAXED OUT Credit Cards.

[FFA]

"How are they still around...?"

Excelent claim service. Had a house fire with them on a holiday. Adjuster was on site before Fire Dept pulled out.
That HH will never change regardless of pricing or poor agents service.

[FFA]

Sacman, what state are you in?

[steveshults]

I have been an Agent with Farmers in Illinois for 13 years now. I love the Company. It allows me the freedom to be my own boss, set my own schedule, and determine my own destiny. Farmers array of products is second to none, and their claims service is the best in the industry. Yes, we have our rate pressures, however, rates are cyclical, and it's the same with our competetors.

[justthere]

I agree with some things that Steve says. I have been with Farmers for almost 20 years (I know -scary thought) and have been through a number of cycles. Sometimes, it sucks and sometimers, it's good - same as it is outside the captive world. However, my vision is somewhat different than most Farmers agents. I am a commercial writer first and personal lines last. I have extensive freedom as long as Farmers will not accept the risk. This is not hard to achieve when you can call an underwriter and feed him/her the "facts" as they need to be seen. As long as you follow the model, there just are not that many problems with Farmers that do not occur in the Independent world. I produce a lot of profitable business and therefore do not have a problem. That does not mean that problems could not pop up. It has been a tremendously ugly soft market for the last four years and my income has suffered terribly in and outside of Farmers to the tune of 30% loss of gross income with active marketing. But, you adapt or die. HOWEVER, if somebody were to come to me asking whether they should start with Farmers now, I would say absolutely not because their new contract really makes them captive and they have no freedom for a long, long time. Without the freedom, it is just not worth it.

By the way, if it the Sacman I know of, he is in California and is an excellent agent.

[kevinraz]

Steve & Justthere - it's good to hear something positive about FIG. I still think they are a good company but like any company they will go through good & bad times.

May your success continue!

[FFA]

Just There, I was FIG for 18 years and had the same model as you are currently using -Commercial First then Home Auto.

The tech issues as well as the surprise of the rate hike last year took all the wind out of my Farmers Sail. First year result independant, I booked over $700,000 in new business premium. Less then 2% of my volume came from Home & Auto. I got back all the volume I left and increased annual Commissions. looking forward to another year of the same as marketing to get them results was expensive - my net income dropped like a rock.

Another year like I had and I'll be way ahead of where I was.

[sacman]

I am still friends with several Farmers agents and wish them nothing but the best. In fact, several of them refer business to me that they cannot write. However, this is not the same company that I joined 20 years ago.
My issue is that you do NOT control your destiny. Regardless of what the DM who hired you stated. Especially if you concentrate in personal lines. As "Just there" stated, in the commercial market, at least you can use other carriers. In personal lines, you are truly "captive". To their policies, pricing, customer service, computer system.Their 'Next Gen' home policy is a joke, not even offering open perils on coverage A like every other basic form 3 policy does. You cannot try to save the business by placing it elsewhere. You have no say and no control. that is not being in control of your destiny. You contract is an 'at will' contract, which means that they can terminate the contract at any time, without cause, with 90 days notice. HOw can you be in control of your own destiny when your DM or state exec can stop by your office at any time and shut down your office, without reason, in 90 days? And yes, they ARE doing just that. In my state, WI, they just did that to several long time, profitable agents who were all over age 55. One of them just a couple of months after their spouse died. Granted, they were not producing like they were 10 years ago. They were enjoying the fruits of their labor like they were told they would be able to do when they first became agents. How is that "owning" your own business? If I "owned" an heating/air conditioning business could somebody make the decision that I couldn't be in business any more because I decided to slow down at age 60 and let a couple of service technicians handle most of the calls?
The question becomes, since I do NOT control my own destiny, is this the company that I want to have control of it?
I'm not as bitter as this post may sound. Just want to give fair warning to existing agents that a plan B on the back burner is not a bad idea.