Re: Newbie, Should I Start a Farmers or Independent ?
Posted: Wed Sep 11, 2019 12:55 pm
There has been lots of answers from Independents here and I don't dismiss their advice because it is honest to their situation. I will do the same with my own.
I am a captive (not Farmers) for the past 30 years.
Yes, I do get paid less commissions on the front side than independents. But I believe it all works out for the better in the end. They provide me most of the tools I need to run a business and expense back all my office expenses (rent, electric, employees, etc). They provide me discounted healthcare and a matching 401K. I also have a full pension when I retire that will exceed 6 figures a year in perpetuity for the rest of my life. They also provide me access to a general agency allowing me to place business with a dozen other carriers.
So while I do work for a large company I get the benefit of their name brand and still feel like I am running my own business. The quotas are nominal (herculean when I first started but haven't been a worry for years) and as long as I make those quotas I am not micromanaged.
I say this to say there are pro's and con's for each. Maybe Farmer's in particular doesn't have all the benefits I have as a captive but they also shouldn't be used to paint a picture of how ALL captives work. In fact my company is working on a plan to allow their captives to have a succession plan allowing them to sell their book to another qualified captive agent. More and more we are seeing captives adopt a "hybrid" plan in order to help retain agents. And the out-of-pocket costs for running your own independent agency are getting larger all the time - taxes, office expenses, agency management software, healthcare, etc, all of which are either completely non-existent or heavily reduced on the captive side.
I don't think 1 answer fits all cases. If anything the one piece of advice that is golden is to consider the contract you are presented by an aggregator or a captive because it is obvious they are going to vary.
I am a captive (not Farmers) for the past 30 years.
Yes, I do get paid less commissions on the front side than independents. But I believe it all works out for the better in the end. They provide me most of the tools I need to run a business and expense back all my office expenses (rent, electric, employees, etc). They provide me discounted healthcare and a matching 401K. I also have a full pension when I retire that will exceed 6 figures a year in perpetuity for the rest of my life. They also provide me access to a general agency allowing me to place business with a dozen other carriers.
So while I do work for a large company I get the benefit of their name brand and still feel like I am running my own business. The quotas are nominal (herculean when I first started but haven't been a worry for years) and as long as I make those quotas I am not micromanaged.
I say this to say there are pro's and con's for each. Maybe Farmer's in particular doesn't have all the benefits I have as a captive but they also shouldn't be used to paint a picture of how ALL captives work. In fact my company is working on a plan to allow their captives to have a succession plan allowing them to sell their book to another qualified captive agent. More and more we are seeing captives adopt a "hybrid" plan in order to help retain agents. And the out-of-pocket costs for running your own independent agency are getting larger all the time - taxes, office expenses, agency management software, healthcare, etc, all of which are either completely non-existent or heavily reduced on the captive side.
I don't think 1 answer fits all cases. If anything the one piece of advice that is golden is to consider the contract you are presented by an aggregator or a captive because it is obvious they are going to vary.