Farmers Insurance

[SFOInsuranceLady]

Hunter600, Wow..you are not alone. What is the deal with Farmers Agents and fraud? Many years ago (in the 70's) I worked for a Farmers agent who was not only doing what you described (not a dm, but an actual agent for Farmers) but he was also falsifying policy numbers and pocketing return premiums. I had proof and called him on it. He forced me out. He was eventually caught, fined and had his license revoked. I can see working for a captive market to get your feet wet in this business, but to try to make it your career has got to nearly impossible. Especially now when almost anyone (in California) can kill their rates.....too much drama if you ask me!

[ED3771316]

You Farmers guys have some of the best Commercial Products availible.

Time you demanded from State Office/DM, whom ever, to get the training now. Its their fastest (only) growing segment in the organization. They can let go the Personal Lines Growth Consultant as that is just not going to happen. Bring in another Commercial God as KB should be in need of help. So, retrain the Personal Lines Growth Consultant or get rid of him and bring someone in from outside that would be turn key.

Odd how big companies can not adapt to market conditions on the fly. Of course, they should have know this was going to happen and prepare not only themselves, but all the other lives they are having an effect on.

[lonestar]

ED3771316,
Farmers knows exactly what they are doing. They are NOT trying to grow personal lines. They received a 2 billion or so cash "loan" from their parent company Zurich back in 2006. However, if Farmers is able to generate a certain level of premium growth by 2010, then they will not have to pay back this loan. So, everything I am seeing is Farmers is continuing to maximize revenue from all personal lines business(especially auto) so that they can meet this premium goal. This is done by continuing to raise rates on their customers. If they were concerned with growing market share, they would then have to price their auto products to be competitive. If anyone is even thinking about starting as an agent with Farmers right now, they would be ignorant to do so, and will regret it shortly. You can read more about what Farmers is doing to their agents at http://www.ufaa.com in the public section. And they are rolling out a brand new agent contract this year that is agent suicide for anyone that signs it. It can be viewed at the above website as well.

[ED3771316]

I have heard some grumbling about the new agent contract being more restrictive then before. Not sure the details.

With the PIF shrink, it seems to be counter productive to their goal to chase existing clients out the door.

After the 2010 deal, what next? Drop rates back down so the scraps of what is left gets the rewards?

[cavery]

Any strategies on going independent to get good appointments with rated companies? Just spent 3 years building a small book with a captive agency, considering going independent focusing on small business owners for insurance.
I heard clusters are pricey to get into.

[ED3771316]

Only strategy is to pick up the phone and start contacting the variuos companies you are inetrested in writing for.
You might not have a big enough book to get some contracts. If such is the case, call Service Insurance Agency out of Arlington Heights.

[sundeviljeremy]

As a career agent exiting my career program and ending my second year, I like to keep a positive mindset about the future and an understanding from watching my father start and manage a mom and pop handyman company. You earn what you work for and when the lights go off at night and you lay your head down, you are responsible for your future and your earnings.

I read too many messages about how Farmers this and how Farmers that, yes we have goals, we have DM's that want this or that and we have DMMs and SEDs that want more juice from the same grape. That is life and that is business. If you owned a small retail store or a large corporation everyone has someone that wants more from you.

Rates go up and down, business pace goes up and down, but when life hands you lemons, make lemonade and quit cryin about stuff you can't control. If you don't like Farmers Insurance or you don't like the industry, there are plenty of other careers out there or there is a line at the department of economic security waiting for you.

Saddle up and ride!

[pjking42]

I worked at Farmers for over 20 years. Going independent can be difficult. Most companies don't want to give direct plants until you build a book of business with them. There are places like Market Scout, Insurance Noodle and others where you can place business through Hartford, Zurich, AIG and many other carriers. You own the business written though Market Scout and places like them. This allows you to build a book with a company before requesting a direct plant. Once you get a direct plan, you can roll all of your business out of Market Scout, etc. to being direct written.

Good Luck!

[IndyMischief]

Sundevil,

You do have a great attitude, and I hope that never changes.

But, as you progress and mature in your Farmers shoes, the chances are extremely high that those lemons will become more and more caustic. As long as you keep your great attitude, while keeping your eyes open and feelers out for possible future movements in your career, those caustic lemons may serve to help you make an even better decision later in your career.

Be receptive to change in the future. Otherwise, if you believe you've made your final nest in the Farmers "family", then chances are very good that one day down the road, the remaining dinosaur bones will be the only thing you have left therin.

Good luck,

[cofarmer]

Glad I found this thread. 15 year Farmers agent who is agressively looking to leave. should have done it a long time ago. In responce to the person who said it is hard to get appointments, I havent found that to be the case in this soft market. When it hardens up that might be a different story.

[ED3771316]

Sundevil, For 18+ years, I have heard that we are working on a long term discount for clients that have been on the books for X amount of years. Heard that last week from a Personal Lines Growth Consultant again.

We have the worst tech in the industry. They are aware of the problem and are working on it since the roll out of the dash board. While they are working on, you can sit on hold with Service Point and listen to elevator music while opportuniy cost pile up.

Commercial is the fastest growing segment of Farmers list of products. They brought in another Personal Lines Growth Consultant instead of help for only one person that runs commercial. They have ignored the potential for growth in their fastest growing segment.

GWP, whatever happened to net premium growth? Gross means nothing if the bottom line does not increase.

You get to offer a new business discount that stays on the policy forever until they decide to stop doing that. In the mean time, nothing for the long term client.

Good luck with renewals at 25% higher then when you wrote them just one year ago. Jumped on us without warning so we could /could not stratigize a game plan.

Good thing they brought in Standard Lines people to run a preferred company. Maybe they can come up with something other then Gimick Discount and Deductibles. I have found my former clients are not that blinded by the brand name. A hug is not worth a mortgage payment to them that have left.

Again, best of luck to you.

[gregcw]

Farmersgirl,..... As a Farmers agent, you do not own your policies. As an IA, you DO own your policies. This is a huge difference, of Biblical proportions, that most new captive agents do not understand. In the IA world, your "contract value" on these policies is worth 2x to 3x the annual commission. Farmers values your policies at a factor of 1X annual commissions. Again, a HUGE difference. ...

Lonestar, I have one significant correction to your "contract value' illustration. it is one times annual RENEWAL commissions. When Farmers asked me to leave (I was NOT terminated) I gave them SIX MONTHS notice. That six months saw my contract value increase by about 30%. Some of it was due to rate increases, but most of it was due to new business, placed in the previous six months, for Auto, and year, for Dwelling and Commercial, that renewed during that six month period.

An I/A is looking at variables of 1.5 to 2 times annual commissions, as I am hearing in the current market, of total annual premiums including new business, depending on the composition of the book, loss history, contingencies etc. I may be mistaken but what I am hearing is that 3 times annual commissions is a thing of the past. That type of value would involve either an un-sophisticated buyer or other considerations.

There is a plus for the Farmers agent though... they don't have to FIND a buyer. The I/A does.

[wlunday]

Well, I've been having a few weird experiences with Farmer's, too. Their commercial underwriters are accepting stuff that Zurich won't touch, that usually take a surplus lines or at least a specialty product (Lumberyard). Then the big boosts in PL premium... followed by the recent efforts by Zurich to distance Foremost from Farmers.

Here's my two cents... Zurich has started on a course to create a marketable company. I saw this back in 1996 /97 when Lincoln national wanted to sell American States. ASI had several years of premium boosts and the commercial underwriters were taking everything that came in the door to show tremendous premium growth. The bitter-sweet of it was I had been a Lincoln National Life agent for 16 years, with lots of Lincoln stock in my 401-k. The sale boosted my stock value! But, 1997 was when I bought my Indie P/C agency that was mostly Safeco! As you know, Safeco bought ASI and then spent the next several years trying to clean up a bunch of really crappy business! It didn't make it easy on us agents, believe me!

Mark my words... Farmer's is going on the blocks!

Swymmer

[lonestar]

gregcw, just passing along information that I hear from several IA friends of mine. Bankers finance Allstate book sales all the time, so I don't think finding the financing to buy a book would be a problem. If I could find a solid IA agency for sale, I would have no problem paying 2 to 3 times book value for it. Problem is even finding an agency for sale. High demand, very low supply right now. And of course, some regional issues come into play as far as pricing. I think anyone selling an agency for only 1.5 to 2 times book value is underpricing the agency, and would be considered an unsophisticated player for doing so. The big winner in a Farmers agent selling their book back is FIG. They are only paying 1x book value. gregcw, thank you for pointing out such a blatant mistake on my part. Without you bringing this HUGE mistake to everyone's attention, no one would have been able to understand the point I was trying to make.

[kevinraz]

Hello - I'm a former FIG agent myself, left a decade ago when the company could not stop screwing up Prematic billing on 10% of my households every month. They blamed it on Y2K preparation at the time. I had to get out to stay sane, went to the IA side before becoming a middle market underwriter.

In many ways it sounds like nothing has changed at Farmers. All the old problems are still there and they do a good job of finding new problems to add to the mix. My first DM (Chuck Marshall) was a gem then we got a replacement that was not so hot. Like many others I realized that the DM can really make or break your life with Farmers. I broke.

But even with saying all that - they are still around, still have a good rating, still doing okay in most areas. I'm now in the Seattle area and you can't turn a corner without seeing a Farmers office. I see their ads on TV frequently and they are pretty well done.

I hear the same issues with Snake Farm and Allstate. Remember how Allstate really screwed their agents about 5 years ago? State Farm has been in & out of the courts as well for various claims practices. My most recent company, Hartford, nearly does not exist any longer, stock now at $6, less than 10% of what it was a year ago. Sad thing about HIG is that the company itself is doing fairly well, it's investment and confidence that are killing them.

So complain about Farmers, leave if you must but I can tell you that sooner or later the vast majority of decent sized insurance companies screw up. Ohio Casualty once moved their service office from one part of the country to another; they lost a lot of files and hired a bunch of hicks with heavy accents to answer the phones. Awful. The Travelers PL service center was great at answering the phone and processing changes but don't ask them for a quote on a change - none of the people picking up the phone have any quoting authority, you have to wait two days. That does not work when a customer is on a lot pricing cars. Continental Western could not keep the same underwriter in a chair for more than six months. You could quote whatever you wanted with Acuity on their system but that does not mean they would bind or honor the quote. Chubb was probably the overall best but less than half of my book qualified for their programs.

Old saying - put all your eggs in one basket, then guard that basket very well. Perhaps the captive route ain't so bad after all.

Finally - the Sentry cavalry ain't riding any more. At least Farmers is still around, the cheese is still there. Just smells like limburger sometimes.