Farmers vs. Independent

[mhutch69]

Rosemary,

You are very agressive to recruit off this blog. I am surprised you would enter Brooke's name into this subject and be truly trying to help this young lady.

Milliniagirl, (sorry for spelling), please read the other posts and understand the "Brooke Franchise Agreement" before signing anything. The structure is very good for Brooke and the agents are glorified employees without payroll.

The financial benefit is ALL for Brooke as they negotiate large commissions direct with companies and pay the agent anything they want, which can change anytime. Also, like the other post said, you do not even get your mail.

I wonder what Brooke will do after the "last idiot" sells to them and they have to actually make money running the agencies they bought. Without the upfront "Buyer Assistance Plan" or BAP, the revenues will sink greatly and the insiders will bail out of the stock again.

Brooke top management are good financiers, but NOT good insurance guys. Bob's nephew, Shawn Lowry Bailed out without a reason and he was president. Got tired of screwing old people out of their life's work and retirements.

[assurance]

I am a independent insurance agency owner and for me to be captive is just not going to happen. I get harassed by regional farmers and state farm managers all the time with their arrogant sales pitches. The only benefit is the system and training. If you know the system and know products why be captive?

[kevinraz]

I left Farmers in 1998, worked in two other agencies and have been on the carrier side since 2002. Billing was really killing me at the time and they told me it would take over a year to get it corrected. Sounds like after a decade it's still screwed up.

If you can I would avoid the broker access option. Some are good, some not so good but either way you don't really own your book.

Buy an agency if you can and you've got instant contracts and street cred. Once you have that base you can much more easily get appts with other carriers since you've already got something to work with.

Good luck!

[fredwilkinson]

I don't know what area of the country you are in but if you are interested in starting an independent agency you might contact http://www.siaa4u.net They are the largest independent agency alliance in the country and they help direct writers/captive agents start their own independent agency. They provide assistance with the E&O, software, rating software and direct appointments with the national companies. If you are in the Dallas/Fort Worth area I would be happy to help you. My phone number is 972-490-2300 I wish you the best. Fred C. Wilkinson

[grandcanyonquotes]

[quote="insurancechick"]Well, it's the same thing with owning a Brooke Franchise. You don't even get your mail. It goes to them and they send it to you if you need it. Seriously, I bought a book of business from a brooke owner that had left. i was there 2 days and left. you have no control. over the money, the carriers they are contracted to do business wiht. Basically, you are an office manager. that's it. be VERY careful with that. Advice to you is, dont' do it. Check out Allstate or State Farm or even Nationwide.

Good luck

[grandcanyonquotes]

A friend told me recently that all commissions go to Brooke HQ. After paying office expenses (and their cut I assume), they pay the rest to the agent. As an independent, I love commissions coming directly to me. I would not like some HQ receiving all the commissions and doling it out. Someone knows Brooke better than I, but the advantage they offer was not worth giving up the control. They maybe higher commissions? More bonus participation with the large group of agents? Perhaps both are very valid reasons for sure. Still, I'll take my little independent gig. http://www.arizonahomeownerinsurance.biz

[choicearizona]

I left a captive and went independent. It's not a cake walk but I am not that far from replacing my income. On top of that there are no managers or VP pressuring your to sell products you don't want.
http://www.lowcostaffordableinsurance.com

[gregcw]

I started out life with Farmers too!! 26 years ago. Farmers is responsible for the large percentage of the scratch indendent agencies that I see or meet at the PIA convention. I was appointed by Farmers for 6 1/2 years when we agreed to disagree and my agency appointment ended after I completed a full 7 years in 1989. When I left Farmers I had two non-standard auto appointments, three G/A's I was working with, two bonding companies and two specialty companies. That was back in the day when most FIG agents had at least one non-standard auto carrier.

In summary, I had some existing income/business outside of FIG. When I left FIG my contract value was $45,000 with a loan from the credit union that it secured, I had a net $29,000 contract value, paid over 12 months in 3 installments. Between the existing income and the contract value payments I was able to survive. Based on your contract value, my guess is that your annualized premium is aroung $450,000, not including your new business. If you have been producing a lot you may want to consider being patient. Review your production reports and see how your contract value is increasing. My last year's production with FIG was outstanding and I watched my contract value increase by nearly $10,000 because of my new business Auto increase the first 6 months of the most recent 12. Remember that your contract value is based on 100% of last years RENEWALS. If your retention plus new business production has been good that will work to your benefit.

What I did next was contact a couple of Standard Regional Companies and arranged appointments with them. As I grew with them I was able to attract and appoint with other National Standard companies.

Your first step, assuming that you do have some appointments outside of FIG, is to join one of the Associations. IIAB
and the PIA both work with E&O carriers. They can help as an advocate for obtaining E&O at a reasonable premium. I did not join initially and had some difficulty getting E&O. I initially worked with one of my GA's who was unable to secure a quote for me. I was finally able to get it through Employers Re: (now Westport) by going through the Life Underwiters Association. When I joined IIA, and had the policy trasferred to them, I learned that I had been declined by them when I had applied through the GA. The GA was as surprised to learn this as I was because there had never been any formal notification to either of us about the decline. We both just thought they were dragging their feet on preparing their quote when the truth was that they just weren't communicating with us and may not even have realized it.

If you do NOT have other appointments get a few appointments, which your FIG Contract does allow. When I left FIG I already had a Progressive appointment, which may be difficult to get now as an FIG agent and a Viking appointment.

Reviewing the other comments in this forum, you are seeing a lot of good advice and recommendations. One of the pieces of advice that I really think you should take VERY SERIOUSLY is to stay away from Brooke Franchise. I have a very good and very old friend who also left FIG to work in an indepndent agency that was sold to a Brooke Fanchise. The first agency gave him an ownership interest in his personal book so he came away good in the sale, but he's now working with another independant because of the Brooke Franchise payment policies.

The last thing that you need to remember is that your non-compete is of both your book and the book of ANY other agent in your district. They're really only able to watch your book unless one of the remianing FIG agents complains that you're taking their business.

Best of luck.

[Lola]

Try contacting SIAA, (http://www.siaa4u.net) they should have one in your area. For $10k and a monthly fee vs production, yo have access to some great companies and ownership. Good Luck and let us know how it all works out.

[freedomfromcaptivity]

I have a solution for you. We need to talk. Please contact my email at freedomfromcaptivity@yahoo.com and we can exchange phone numbers and such and talk in the near future.

[Rochambeau]

By the sound of it, Brooke is all but toast. Bankrupt & getting their pants sued off.

[FARMERSGURL]

I am a very happy Farmers Insurance Agent here in California. I was in the broker world for 10 years and was very tired of all the games the companies play. It is not as easy as it seems to get those good appointments, they want an existing book of business, loss ratios etc. so usually have to start with not so great companies (non standard). I researched it and thought it through and unless you are guaranteed the appointment I wouldn't even go there. No matter which way you go all companies have their issues. I know Farmers can be frustrating at times however coming from the other side the headaches that the non standard companies and the customers that fit into that category gave me are worse than ANY headache Farmers has given to me.

[independent guy]

In all fairness, not all non-standard carriers are alike. Most of my non-standard carriers are just as easy to work with as my preferred carriers. I would exit the industry before I would go captive.

[Rochambeau]

It may be different in other areas, but where we are Farmers is grossly uncompetitive. We usually come in at half of their premium. Difference between independent and captive is that an independent can do something about it. I really feel sorry for all the Farmers agents I see struggling. There is an office about half mile from me and it was one agent for a few years, then housed two now it's up to three and the names on the sign change with regularity as one agent calls it quits and another one comes on board.

Also, I see State Farm resorting to direct mail and internet banner ads recruiting for new agents. 20 years ago, they were turning away applicants, quality applicants. Now they can't even get their employees to buy into their agency system because they know it's a losing proposition.

Talking to an Allstate agent yesterday making 10% on auto & home. I can't imagine trying to get by on that. We're at 14% and will be at 16% in a year and a half. It may go higher but chickens hatching and all that. Think of it though, 60% higher commissions means more than double the profit that he would make on the same size book.

Yet there are still doomsayers predicting the end of the independent agency. Go figure.

[ED3771316]

You must be in Illinois.

You can start to build your Independant Agency with out violating your contract through various Commercial General Agents. At some point in time, the Personal Lines Climate is going to change and you will have a pool of prospects to pull from right under your nose.

Do not forget that Farmers does do Commercial Lines also. They are priced very competitive.

Doing Commercial has its benefits. 1) No Fara/Fppr issues. 2) 09:00am - 05:00pm. 3) Economy is tight, most business owners are shopping to cut costs. 4) Farmers Commercial is aggressive on the pricing.

As far as the POS Dash Board goes, well, it is what it is. A Bad idea that just will not go away. The arrogance of Home Office thinking this is great and not listening to the field agents, well... you can finish that statement. The new commercial system is not as good as the old system, but no where near as user unfriendly as the personal lines side.