Farmers Insurance

[ED3771316]

Any Agents sweating their jobs looking for a new gimick to offset Farmers idea of a 25% increase in rates?

[atgnut]

I'm not sweating, been through that stage already(not sleeping much at night). I'm looking for the nearest exit. May not be able to eat next week. That would be okay if it were just me, but I have small kids. To say that this has been the biggest mistake of my life would be an understatement, but hind site is 20/20. There latest gimmick is to recruit as many new agents as possible because the current agency force cannot give there overpriced products away at this point, so they need new carrot chasers. Tell everyone that you know that If they come a callin' run like the olympic gold depended on it. I could go on about this farce but why bother. I will say to think that this will be the last set of rate increases, is like thinking that they care about there agency force and anybody that has been involved with this pyramid scheme knows that's not true.

[chromedome]

atgnut- sorry about your Farmers experience. Hopefully you have learned enough to either be successful as an IA or get the hell out of this crazy business. I have been with Farmers about six years and have a very good business but my timing was great and I had the good fortune of not having to pay myself an income the first three years. I honestly think that Farmers is becoming more and more like Primerica all the time. Primerica has no marketing program other than sign up as many new agents as possible and have them write their friends and relatives. When you run out of friends and relatives with Primerica, SEE YA! Farmers is also trying to push out agents like myself with large books of business, give new agents 500 each of my policies at 40% commission until the new agents wash out and then pass the policies on to the next sucker. I see all of the captive agent companies losing market share and the IA's gaining market share as the captive system seems to be too heavy in worthless management, DM's, DMM's ect. If Farmers knew what they were doing they would train every new agent for 10 weeks and turn them loose in areas that there was a need. Then they should fire all the waste in between the agents and the underwriters and claims people. After all that maybe Farmers could have some decent rates again...But I dream on.

[FARMERSGURL]

Sorry but i had to comment and stick up for Farmers! I have been with Farmers for almost 2 years and I love it. I haven't had any bad experiences, have seen some rate increases but have only lost 1 customer to it. Maybe what you say is true, maybe I'm naive but I just don't see it where I am. I have a great DM, great support, it was a rough 1st year but now I am making money and I love my job. I'm sorry to hear you had a horrible experience. As far as IA's taking over in my city captives still dominate and the Farmers name here still carries a lot of weight.

[gregcw]

I'm not sweating.....
There latest gimmick is to recruit as many new agents as possible because the current agency force cannot give there overpriced products away at this point, so they need new carrot chasers.
I will say to think that this will be the last set rate increases, is like thinking that they care about there agency force and anybody that has been involved with this pyramid scheme knows that's not true.

I'm sorry to have to tell you... This is not their 'LATEST GIMMICK' It's a continuation of their standard practices as far back as before 1982 when I appointed with Farmers. They like to throw a lot of agents up against the wall like dirt to see how many stick. I went independent after seven years and have been an agent for 27 years now. Don't give up hope yet. You don't say how long you've been with FIG. The ONE area that they are good at is sales training. If you can sell Farmers you should be able to sell for another insurance company too! If it is just the rates that are getting to you, that is cyclic. Your going to deal with that issue regardless of the company(ies) you deal with.

Sorry but i had to comment and stick up for Farmers! I have been with Farmers for almost 2 years and I love it. I haven't had any bad experiences, have seen some rate increases but have only lost 1 customer to it. Maybe what you say is true, maybe I'm naive but I just don't see it where I am. I have a great DM, great support, it was a rough 1st year but now I am making money and I love my job. I'm sorry to hear you had a horrible experience. As far as IA's taking over in my city captives still dominate and the Farmers name here still carries a lot of weight.

I'm glad that you have a great District Manager. They are few and far between. Most are District Manglers. My honeymoon lasted almost three years. They then began to show their true colors and the marriage lasted only six 1/2 years before divorce proceedings began. You might want to search these discusstions for Farmers. I think that you'll find yourself in a minority. I will say one thing positive about Farmers. They are a real insurance company and on that side they are fairly good. It's their Sales Department (DM's, DAM's, RAM's, & RSM's) that are lacking quality and ethics.

[Phils]

I'm glad that you have a great District Manager. They are few and far between.

We too have a good DM (as was our last one for over a decade before he retired). However, I don't see him lasting much longer because new agents have almost impossible requirements. In addition to the rates in this area being higher than the competition (cold call= "... can I show you ways to increase your premium?!?") they have Farmers Financial Services (FFS) commission requirements (lowered from $1000/yr to $500). And if you think it difficult to sell insurance that costs more, think how difficult it would be to get ANYBODY to buy into this stock market! ESPECIALLY if you have ZERO years of experience.

He may only be saved by the fact that he isn't alone, and I can't imagine Farmers firing 90% of the DMs during these times because they can't get enough 'dirt' to stick to the wall.

Of course they've done other things "I couldn't imagine" before.

Phil

[lonestar]

Farmersgirl, I too, was once in love with Farmers my first 3 years of being an agent. But after 10 years of being a Farmers agent, I realize that Farmers was not the company that I thought it was (or hoped it was)when I signed onto being an agent. I hate to rain on your parade, but if you are like 90% of the other Farmers agents out there that have made it 5 years or longer, you will probably decide to see a tatoo removal specialist to get the Farmers starburst symbol trampstamp tatoo removed from your backside. Like the other posters have said, it is a good place to get trained. However, their compensation schedule is among the lowest in the industry. Commissions: Auto: 10% on auto vs. 15%-20% on the independent side(Except for Progressive. They ONLY pay 10%). Life: 40% on life vs. 80% to 120% on the independent side(for quantity 1 application). Fire: The fire commissions are actually in line with the market. Farmers will never be very competitive for any length of time, since they have the highest overhead operating expense of any insurance company. Out of every $1 of premium they take in, they have to pay Zurich 18% off the top in the form of a management fee, BEFORE paying any normal operating expenses, including the light bill. 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. Having said all of that, if Farmers is competitive in your particular area on homes and cars, thats great. Keep writing all you can. However, if the past is an accurate indicator for the future, it will not last for long. When this day comes, you will no longer be a willing participant to stand up and salute the Farmers Flag each morning, while reciting the Farmers pledge of allegiance. Oh, were you also told that you have no quotas after you got off the career program? Well, if you get tired of writing life insurance at some point, you'll see how well that will go over with your DM. All of a sudden you will feel like an employee with a quota, not an "Independent Contractor". On retention, most will agree that you will probably see things differently once your clients shop your rate against just about anyone else, stop buying from you, and move their business after feeling they have been ripped off all this time. If you don't formulate an exit strategy to implement for this eventuality, you will be left playing the fiddle on the deck of a ship that has just hit an iceburg, is sinking fast, while you can only hope and pray that Farmers will become a "competitive threat" once again while you sing "My Heart Will Go On". Myself, I am tired of watching the ship go down, at the expense of Farmers losing policies in order to reach a certain "profit goal" for 2010 so that they don't have to pay back the $2 billion loan that Zurich gave them back in 2006.

[atgnut]

Farmersgurl I wish you the very best, but at some point the other shoe will drop. Please be prepared. I too am coming to the end of my first two years in the state of IL. I knew coming into this that the road would not be easy and that was okay. But at some point you have to say enough is enough. I guess I got there a little quicker than you. Many of us new agents came into this financially stable(this being one of two requirements, oh I'm sorry three, the other being able to breathe) and are now on the brink of financial turmoil because in their new standard operating procedure it doesn't take you 5 to 6 years to become broke funneling money back into the company, they have shortened the time frame because 2010 is fast approaching. I would suspect that the money that you think you are making is tied to the great subsidy program that they have in place(the glue that ties you to Farmers). I also have a good(on the surface)DM, but his job at the end of the day is to seem to care and blow smoke to the new and naive because his survival depends on keeping you motivated, around and tied to life for life. Make no mistakes that this is a JOB and not business ownership. Believe me, we all started with the best intentions, but at some point Farmers decided that our GWP was falling off and that was not condusive to 2010. By the way, we have two agents in my district still going through their honeymoon period but I guessing that will come to an end next month when we get the next 25% rate increase coming down the pipe. I could go on but I'll let other agents clue you in while I continue working on my exit strategy. At any rate good luck!

[yotes fan]

farmersgurl

No offense, but simply put, you havent had enough renewals to lose clients due to rate increases..........YET

WHen you write 15-20 policies in a week and at weeks end, you are a negative 10 for the week, then you will feel the pain, and believe me, the day will come

[gl1500]

Farmergurl, Keep with it. I have been with Farmers for 27 years now. With any company you work with there are ups and downs. The IA out there are not telling you about the companies that come in and terminate the agency contract and then they need to rewrite all of that business. If the problem was strictly Farmers then there would not be any agents with them over 10 years and we all know that is not the case.

[xdate]

gl1500, I was a farmers agent for 15 years and my father is working on his 35th year with farmers.
Your are correct about the ups and downs with farmers ( or any carrier for that matter ) we as agents cant predict them
change them or sometimes even get thru them. As a IA I do have to watch my production with certain carriers, very similar with your life goals for your dm, but the ups and downs in the IA world are shorter and less painful to me and more importantly my clients than, because I can move them to another carrier. Moving my clients to a better comapny is not a bad thing for them it is a positive. At no point in Farmers history have they been so far away from the market, not just in price, but in coverage, claims handling, agent commisions,and marketing. Farmersgurl the advice you get from
any farmers agent is going to be biased. If they are with farmers there is a reason they havent left. Talk to a IA in your area with the same amount of time in this business as you and just compare production, and how hard they are working for it. I wish you the best of luck, if your in texas call me I will save you money on your insurance.

[ED3771316]

I just got back from doing three FArmers Fiendly Rescrews for 18+ yr clients.

A collective $3500 in savings just on three households. Got no more smoke and mirrors left. Hope they promote the stoges in the state office like they did Mr Hopkins.

[ED3771316]

Let me clarify, FArmers was $3500 higher collectivly then the quotes the clients showed me.

The State Office Gimick plan does not work any more.

FARMERSGURL, your DM must be great. Ride him for all he is worth as I am sure you will gain knowledge that will help you when Congress realizes that FArmers is being run like Chrysler, Fannie Mae, Freddie MAc, ect... Eventually, their smoke and mirror game blew up on them.

Feel free to point out the differences if you can find them.

[IndyMischief]

Hey guys, I have to chime in about Farmers also. I too was a Farmers agent that overstayed my welcome. Honeymoons are always good, but some are longer/shorter than others ...it will come to an end one day, though. I should have left years before I finally did. I can't tell you how glad I am that I finally made the seemingly tough decision.

Quite honestly, I believe Farmers is more like a pyamid scheme than a legitimate business for the average agent today. I have a long family history with the company, and I can tell you that it wasn't always cast in that manner. But for many, many years it has been more about flinging the mud on the walls and seeing who could stick, and for how long.

They bring you in under the Career Program and get you on a subsidy, tied to ever increasing production. Nothing too wrong with that. But, if you think your Run to Daylight will be the last time you have to sweat your position, you need to think again. They don't care if you have a couple of million dollars worth of profitable p&c business on the books, if you aren't producing the life and financial services they require, you will eventually be placed on the Deteriorating Agents program and at the end of that path is your 90-day notice. They steal your hard-earned accounts for a song and give them to the next rungs of that pyramid.

Because they are a "name-brand" company with a long history, they know there will be a large percentage of the population that will stay with them even if you make a successful transition to the IA side. Their dm's and newbie agents that took your accounts will lie about why you are no longer with the company, and they will say/do anything they need to hold onto that business. If you make any mis-steps in that first year of your departure, they will be on you with their bank of attorneys like the 800 lb gorilla that they are.

So, the average agent stays when the rates in their areas deteriorate (grossly), and they pour more money and time into advertising and Farmers Friendly Reviews. Yellow page ads abound, shopping cart pictures, flyers in the neighborhood, donuts on every realor's doorstep ...not to mention the behind the scenes, and sometimes illegal, referral fees and rebated premiums ..anything to keep your head above water. You become so invested in the system, that it's very nearly impossible to leave, but Farmers doesn't care because their crest is getting flung all over the place. So, you hang on and hang on, hoping one day things will turn around. Again, Farmers wins because you no longer have the financial ability to successfully fight for "your" business when you leave.

So, why do I say it's a pyramid? Well, look at the facts.

1. They tell you that you own your own business, but you don't. You can't sell it to anyone except an "acceptable" family member (pity the poor fool). What makes an acceptable fool? Whim. There are no set rules, only mere guidelines again. So, whatever your dmm decides is final. The IRS will tell you that your contract value is NOT capital gains, so you'll have to pay income tax on the contract value (often called "retirement" by many company officials, funny enough). You can't keep your phone numbers or any contact information when you leave. Nothing belongs to you, exept the bills and the ulcers.

1. There are no limits to how many agents your dm's can put into your State, your city, your zip code, your neighborhood. Oh sure, there are a couple of lines in the official Agent's Guide that says you should be located a couple miles away from another agent if you have an outside sign. But trust me, if this ever becomes a problem you will quickly hear from your managers that the rules is "merely a guide" and not a requirement. If you do the research, you will find that even when Farmers is saturated in an area, they will still put more agents on the rolls and expect everyone to continue producing numbers, that if met, would lead to 100% saturation in a very short time. That's unrealistic, and unattainable. But it would be nearly required if all those agents could really expect to be mildly successful. So, the business proposal they offer is not attainable for anyone in many cases.

1. Another sign of a pyramid is how many people get a "cut" of the commission. One of the reasons Farmers pay rate is lower than the rest is because so many people are getting a cut of the premiums brought in my the agent. The dm gets a percentage, the dmm gets paid a percentage, the claims and underwriters get a "profit" bonus (but I can't tell you how many years of my career Farmers said they had an underwriting loss - yet, not one year went by that a profit bonus wasn't handed out during an all-day, shut down the phones, party), and Zurich gets a cut ...as another post pointed out. Don't forget the State Manager and Area Managers. Legal pyramid, maybe not. But it sure quacks like a duck.

1. They run through a completely inordinate numbers of career agents that never succeed. Can you say, A.L. Williams (okay, most new Farmers agents will have no clue what that means. If you don't, just google the name followed by scam and you will quickly learn. ) Instead of focusing on attracting, signing and developing true business people, they instead would rather throw on large numbers of agents that will write all of their family and friends until they run out, and then take those policies and use them as inducement to others to come do the same thing - a lot like a Brooke franchise, only they are large enough and powerful enough to squelch any real voiceing of the trouble.

Ok, by now most of you are saying, gee this guy can't even count. Well, there are just too many Number 1 reasons to even take the time to list here in this post. I've gone on too long already. Bear with me for just a little more rant, though.

It's just a fact that there can only be so many Farmers agents per thousand residents and have them be successful. However, being successful is not what they care about. They only care about numbers, promotions, and awards ...games, in reality. Except the games have dire consequences for the pawns they use, and thier unsuspecting families.

A couple or three years ago in my state of Texas, there were about 2200 active Farmers agents on the books. In a 5-year period, though, there had been over 6000 agents that came and went! That's a fact and anyone can check with their State's Department of Insurance and find out the numbers in their own area. If that isn't damning, I don't know what on earth could possibly shed the light. No, that is not a typo. That's 6,000 men and women, many of which brought families with them, who have been devestated by the "opportunity" their good dm brought to their doorstep. Ok, in that 6000 there were surely a few retirees and deaths. I can tell you that (and I don't remember the exact numbers) State Farm had less than 50 agents leave in that time period. Allstate had a little higher percentage, but not nearly so disgusting! This is truly a disgusting, and should be nearly criminal, aspect of Farmers business culture.

Thankfully, I'm gone now, and only occasionally revisit the nightmare when I read some of these posts.

My first year after leaving FIG was rough. I was eating beans and clipping coupons (well, ok, my wife was clipping coupons and "fishing for deals" on the internet). But, I can honestly say that a couple of years into the new IA situation and I was back to where I left off. Now, a few more years down the road, and I'm enjoying life again. I still have concerns and problems to overcome, but I can smile through the process. I was never into Life insurance, and now I don't have one company that cares if I send them any life applications. I don't have to be a stock broker, money manager, life coach, or anything else that doesn't pop my cork.

But, it's not for the faint of heart. Contracts are not easy to obtain. You WILL need to do your homework and preperation and politicking. It's a fact that everyone will not leave and be successful in this venture either. What's the difference? Well, for one, there is nobody out soliciting people to quit their jobs, take their 401k's and dump that money and their time into an opportunity with no numerical chance. All on a company promise that they will "never look back". I was fortunate and made the transition.

Yes gl1500, any of my companies I have now will expect some continued, profitable production. And, yes, any of them can terminate my contract overnight. But, unlike Farmers where I had to walk away from a million-dollar book, I get to keep my accounts now, and move them to another company without missing much of a beat. When I get tired, I'll have a saleable assett. You just wait farmersgurl and any other kool aid drikers, one day you are going to have a meeting where you are just innocently trying to get some help, and they are going to look at you and say with a wry smile, why don't you just leave, then. If that company man/woman is good, they will successfully keep from laughing out loud at you ...mostly because they'll just pity you. Trust me, it's not that simple to "just leave" when you've been a dedicated Farmers mule, and they KNOW IT. You'll know it too, whether you voice it or not.

Gotcha - that's all they'll be thinking. Oh, that and their next few phone calls will be to some newbies to tell them that they have a prospective book of business coming down the pipeline, and what kind of promises and favors will they offer to "bid" on the opportunity to feed on your fruits. They'll be looking for a few good "team players". It's a cool feeling.

Gotta go now...

Good luck to you.

[lonestar]

IndyMischief,
That is a great post. My thoughts exactly.