Farmers - your opinion

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lonestar
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Re: Farmers - your opinion

Post by lonestar » Sun Jan 29, 2012 10:19 am

Letter below written by a Farmers Home Office employee, taken from the United Farmers Agents Association website, UFAA.

Original article as it appears on page 8 of The Voice, a UFAA publication can be found at this link: http://www.ufaa.com/page/voice/2011_Issue_4__Winter.pdf

Article cut and pasted below:

DO YOU ALL UNDERSTAND WHAT’S REALLY GOING ON?

First of all, let me state that I am not an agent, but I am writing this article anonymously because I think it is important that agents understand a couple of things about what is really going on with Farmers.
So let me lay it out for you and you draw your own conclusions as to what the final game plan is for the agency distribution system. I will say that I work in the Home Office management, and have done so for the past 20-30 years, and I am tired of the lies.

When the top level management team reads this article there will be a witch hunt in the Home Office. Most agents know that several years ago, Farmers developed a program that makes it virtually impossible to convert 500 series policies to 300 series policies. This program was developed for one reason and one reason only and that is to develop more renewal premium for FGI (Management Company/Zurich) and less service commission premium for the servicing agent. FGI has been telling the Farmers agents that they are the preferred distribution channel, but all the while they have been going out of their way to increase the Independent Agency distribution to approximately 40,000 agents. They have bought 21st Century to compete directly against the Farmers agency force. Did you all know your AAA states that you are contractually obligated to sell, service and submit business for all companies in the Exchanges? Do you all remember the big push to force agents to accept Foremost as part of the Exchanges? FGI went out of their way to make sure the State Executives used pressure to make the agents conform to this idea, even though most agents already had contractual agreements with Foremost. Then FGI forced agents to move existing business out of Mid-Century (Part of the existing Exchanges). The reason for this move was calculated because FGI had negotiated a higher management fee for placing business in Foremost as opposed to Mid-Century. This was definitely not in the Exchanges best interest, but the Board of Directors approved the transaction.

If you will look at Farmers objectively over the past 10 years or so, you will see that FGI has become a holding company for FIG by buying companies and allowing FGI to charge higher management fees. Many agents are now questioning the Take 5 program and why the big push for the continued influx of leads. If the agents will go back and look at the leads they have keyed into the system and were not taken they will see that 21st Century has contacted them and written business. Many agents have already discovered this because they did test quotes on friends and family only to find that those friends and family were soon contacted by 21st Century. This has caused concern because no one expected that agents would create false quotes just to make their daily Take 5 quotes.

You all do understand that you are Independent Contractors and don’t have quotas under the law, don’t you? Well the agents under the new contract do have quotas, I should clarify that. The biggest FEAR that FGI has is that one day you will join forces, like join UFAA and they will lose control. You see there is power in numbers and if the agents banned together and refused to do the Take 5 and other misguided programs, there is nothing they can do because you are Independent Contractors.

There is one more important item that I believe you need to know to really understand what is going on. I know that you all know that FGI is terminating veteran agents and giving their policies to new agents, but I don’t think the agency force really understands the real reason they are doing it. Let me explain. FGI eventually wants everyone under the new contracts as they are very repressive to the agent and
DM, but they give FGI total control. The production quotas are built into the contract, leaving no question as to whether or not there are production quotas.

Secondly, on the DM side the DM has deferred pay unless he hits certain goals. If he doesn’t hit them he loses the income. Bottom line, if the DMs don’t hit the goals set for them their income is drastically reduced. This naturally sets up an adversarial relationship between the agent and the DM.

Thirdly, and this is the most important thing you need to understand is why veteran agents are being replaced. The subsidy program for the DMs and new agents changed to put more of the liability on the DM, instead of FGI eating the money. When a DM signs up a new agent, if he can give him policies in the 04% series then the agent will need to borrow less subsidy and this puts less liability on the District Manager. The failure rate of new agents is very, very high. The other thing you need to know is although it hasn’t been publicized FGI intends to reduce the DM population from around 450 to 150. FGI intends to create super District Managers and eventually super agencies comprised of policies that pay less service commission.

All you have to do is read the periodicals and you will see that this is the brain child of Allstate and FGI has decided this is the future of the agency force. If you look around you will already see the DM runoff occurring. If you look on the State Executive level, you will notice that FGI is going back to the old system of having State Executives being responsible for two states instead of one. If you have a good relationship with your DM and he is truthful, he will tell you he is scared for his job with what is going on with the recruiting centers and the super DM program. 2012 will be an interesting year, because the District Managers are going to be aggressive, because they want to be part of the 150 surviving District Managers.

The reason I decided to write this article through UFAA is that I knew UFAA would publish it and get it out to the agency force. They don’t know who I am, but I know they will publish my article, because everything I have said is true. If it helps at all, the employees of FGI and management are very sympatric with the agency force. This is not the company it used to be. The people at the top do not listen anymore. They are only focused on generating monies for Zurich. They don’t understand that purchasing insurance is price driven. Unfortunately, Farmers now has the reputation of being overpriced. Our commercials are entertaining but they don’t give consumers a reason to call the agent. However, if you will notice 21st Century commercials are price driven commercials.

Why can’t the Marketing department coordinate the two marketing programs and make them both price driven? You know, the new CEO Jeff Dailey is a student and a firm believer of the Progressive model and we are being told major changes are coming that will make a lot of employees and agents very unhappy.
So it’s time for you all to stand up and unite. Remember no agent is safe, regardless of his tenure or production level. Luckily, I have my time in for retirement and I felt that I owed the agency force something for providing my livelihood all these years. And so, I shall fade into obscurity understanding change is inevitable, but it breaks my heart that the company that I have loved and labored to support for all these years has become what it is.

- Heart Broken Management-

FFA
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Re: Farmers - your opinion

Post by FFA » Mon Jan 30, 2012 12:54 pm

WOW. Guess that says it all. Be like the Captian of that cruise ship - Save Yourself my former peers!

William Graham
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Re: Farmers - your opinion

Post by William Graham » Wed Feb 01, 2012 10:15 am

As a former Farmers agent for 22 years (I terminated 2 years ago), the posts by the other former agents are correct. Farmers today is not your father's Farmers. The descriptions that DM is providing is what management puts out for recruiting new agents. However, reality is far different. Farmers is very much a numbers game run by Swiss bean counters. No company recruits as many agents as Farmers and nobody has as great a failure rate of its agent recruits as Farmers. The Farmers game is ThunderDome on steroids- hundreds of agent prospect thrown into the pit and one agent who makes it to career.
The article reprinted by Lonestar is from everything I have learned is 100% accurate in terms of the management thinking in place at the top of Farmers today.
For those who choose the Farmers Way, all I can say is good luck because you will need it.

Was a Farmers Agent
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Re: Farmers - your opinion

Post by Was a Farmers Agent » Thu Feb 02, 2012 10:50 am

I too agree with the prior posts. I came to Farmers after having been in the IA enviroment for over 10 years where I was a top PL producer, so I have a very good knowledge of insurance. I am leaving Farmers because there is no future and no money. In the past month I have had to send 4 existing PL customers away because Farmers will not write their commercial policy. Needless to say they are all moving their PL policies now too. I have had no help from the state people or the district office except to tell me to quote more. In fact they provide you with print outs so you can call and quote and then you have to return those to the DM with your remarks. Does this sound like are running your own business or someone is telling you what to do.

Farmers is all about numbers and if you don't make yours so the DM makes theirs you are screwed. The pressure to meet quota's is unreal. Especially life policies. I have met all my numbers and have received all my subsidy (loan) payments and even qualified for the silver level so my subsidy (loan) payments were increased but it is still not enough to hire a staff and run and office. I have spent my own money and not the loan payments because I knew in the end that I would have a huge debt to pay off. At least when I walk away I won't have to worry about that hanging over my head but not everyone will be that lucky.

I see agents that have been with Farmers for a long time having great success. There are three agents in my district that are gone more on Farmers trips than they are in their office. How the hell they do it I have no idea.

I would not recommend anyone join Farmers at this time. There is no money, no future, you won't be your own boss. What you will be in in debt for a long time and under constant pressure to produce life policies.

dm307799
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Re: Farmers - your opinion

Post by dm307799 » Fri Feb 03, 2012 11:28 am


lonestar
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Re: Farmers - your opinion

Post by lonestar » Fri Feb 03, 2012 11:49 am

I take back all the negative(factual) things I said about Farmers. Farmers is right. There has never been a better time to be a Farmers agent. <sarcasm off>

dm307799
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Re: Farmers - your opinion

Post by dm307799 » Fri Feb 03, 2012 5:12 pm

Humor helps everything!

William Graham
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Re: Farmers - your opinion

Post by William Graham » Sat Feb 04, 2012 11:19 pm

Reminds me of when my son came home from Middle School
He asked me if I knew the definition of a Farmer?
this was 20 years ago after I had been an Farmers agent for just a couple of years
I got all excited thinking he had taken an interest in what I was doing
But I played along & said No I don't
He said: A Farmer is someone who is out __ standing in his field!
We laughed at the time - me more for the reason that he picked up on a play of words

He was wiser than I knew back then
most agents have been left out__standing in our fields instead of being
helped to be outstanding with today's Farmers.

FBIS
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Re: Farmers - your opinion

Post by FBIS » Thu Apr 28, 2016 8:12 am

Quick question for you ex-Farmers agents. Can a Farmers Agent also be associated and sale for an independent agency? So for example say they can't write an account with farmers but they are also a 1099'd producer for an Independent agency and then write the account through them, can a farmers agent do that? Not familiar with Farmers contracts so was not sure if a captive Farmers agent can also write business with an independent agency (like having two jobs).

Thank you for the response.

lonestar
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Re: Farmers - your opinion

Post by lonestar » Thu Apr 28, 2016 9:38 am

FBIS, if a Farmers agent is caught doing this, they will be terminated by Farmers. So to answer your question, it is like speeding in your car. You can do it until you get caught.

justthere
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Re: Farmers - your opinion

Post by justthere » Thu Apr 28, 2016 2:55 pm

Lonestar - I realize that you have a beef with Farmers but your information is not correct. If you are under the new contract with Farmers, you have to get written authorization from Farmers to write business outside. If you are under the old contract, your obligation to Farmers is to give them first right of refusal. If they will not write the risk, then you can take it outside to any carrier that will write it and receive 1099 commission. If Farmers will write the risk, you are obligated by your contract to either write with Farmers or walk away from the risk.

lonestar
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Re: Farmers - your opinion

Post by lonestar » Fri Apr 29, 2016 9:13 am

justthere, I do not have a beef with Farmers. I try to only speak from the facts. Regarding my previous post about being able to write business with other carriers, I was speaking from the point of view of writing business with other carriers that Farmers would write, since Farmers has a broad appetite, and there is not much that they will not write. Also, they have an in house aggregator called Kraft Lake that I understand as captive FIG agents, the agent has to place business there that FIG does not accept.

On a regular home / auto risk, an agent cannot quote that risk through all the IA companies and write it with the carrier that is the most competitive. This is what I was referring to in my post to FBIS.

For the 1 in 10,000 prospects that Farmers declines, and also cannot be place in Kraft lake, if the FIG agent wants to get a permission slip from Farmers, and they will give one, to place the policy with a carrier outside of the FIG AAA, then more power to them.

gregcw
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Re: Farmers - your opinion

Post by gregcw » Mon May 09, 2016 3:08 pm

I started out life with the Farmers Insurance Group company lies before going I/A. As an Insurance company they do an adequate job. If only their management could be trained to be truthful. I had so many lies told to me by the management team that I can't believe that it is not company policy.

In my service area there are currently 3 State Farm agents and 9 Farmers agents. When I started in the business with Farmers in 1982 there were 3 State Farm agents & 4 Farmers agents. Over the next 23 years State Farm has appointed 3 new agents and has had 2 retire to maintain 3 agents. Farmers, however, has appointed at least 35 agents and has only had 3 agents retire. There may be agents that Farmers has appointed that I am not aware of but there are still only 7 offices with 9 agents.

You are working with a District Manager (DM) with Farmers. I consider mine was a District 'Mangler' not Manager. I was appointed by Farmers for 7 years before we decided to part company. This was shortly after they were acquired by British American Tobacco U.S. With Farmers it is important to learn how to spell the word I-N-S-U-R-A-N-C-E. Farmers spends an inordinate amount of time on training to sell life insurance and prospecting but not nearly enough on INSURANCE TRAINING for property and casualty.

Jwebster says they "Micro manages the agencies". I don't think that is true because that implies that they do some "management" activities. I think that "They try to" needs to precede that statement.

The down-side is that while you do OWN your book of business, the commission schedule is lower than an I/A, although that gap has narrowed over the years. You are compensated if a customer changes agents. The up-side is that you do not have to find a buyer. Farmers does give you a contract value, with bonuses for profitability, based only on last years RENEWAL commissions NOT including New Business. An I/A can develop considerably more agency value than a Farmers agent
I posted the above post in 2007. In reading recent posts the only things that have changed is that Farmers was acquired by Zurich, Farmers acquired Bristol West/Coast National and Foremost. Farmers is still throwing agents up against the wall like dirt to see if they stick and telling them that they know everything about insurance. My most recent contact with a new Farmers agent was about 3 &1/2 years ago. The agent, who is no longer an active agent, rewrote one of my accounts over-insuring the home and not providing them a floater on a valuable ring. He told the customer, with whom he had previously been a partner in business with her deceased husband, that she was getting more and better coverage.

We all know that at the time of loss the insurance company is NOT going to pay $200,000 do rebuild a home that costs $100,000 to replace just because it has a $200,000 policy limit. That agent is no longer an active agent with Farmers and currently has no affiliations listed with the DOI. His E&O MIGHT have paid for the ring that was worth $24,000.

I just learned from a FIG agent I keep in touch with that he is no longer an active agent. I am now going to get in touch with the insured, who has been a long time friend to re-solicit the business.
Gregcw

ins-atty
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Re: Farmers - your opinion

Post by ins-atty » Mon Apr 03, 2017 7:18 am

I received a solicitation email from Farmers today. I thought many of you would get a chuckle from the following passage:

"Farmers®agency ownership may be the path to the life you deserve. Owning your own business, enriching yourself and living each day on your terms. Owning a Farmers Insurance agency provides the freedom to run your business your way. That's why it has been called The Best Small Business Opportunity in America®."

lonestar
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Re: Farmers - your opinion

Post by lonestar » Tue Apr 04, 2017 9:17 am

I wonder if "dm307799" is still cheerleading for Farmers... all my sources say that Farmers has gotten even worse since this thread was last active...

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