Newbie, Should I Start a Farmers or Independent ?

[Oblong]

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.

[lonestar]

Wow. Where do I sign up for the deal you have? I am a 20+ year agent, and I am not aware of ANY captive offering your arrangement today. The only one I can think of that might have offered a similar program 30+ years ago is maybe State Farm. But that contract is no more, and has been changed 3 times since 1998.

Every other current captive carrier I am familiar with, Allstate, Farmers, State Farm, all today make their agents pay their own rent, pay their own employees, and the agents are 1099 contractors, not employees. With Farmers, agents can have access to the group health plan, but Farmers does not subsidize the cost. So it can still cost the agent $20,000 a year for healthcare for a family of 4.

If your deal was still available today to any agent, they should probably consider it.

Got my popcorn ready...

[Oblong]

@lonestar - yes, the contract I have is still available to new agents. We are not 1099's like many captives have gone to. I'd prefer not say my carrier but they are one of the Top 20 largest in P&C in the US.

[agentcool]

If you do not get a 1099 then you are an W-2 employee. Right?

[lonestar]

@lonestar - yes, the contract I have is still available to new agents. We are not 1099's like many captives have gone to. I'd prefer not say my carrier but they are one of the Top 20 largest in P&C in the US.

So, you with a carrier, that to a new prospective agent trying to get into the agency business, offers an arrangement the equivalent of a lepricon riding a unicorn on a rainbow, yet you do not want to share what company for other agents to look into?

[Oblong]

If you do not get a 1099 then you are an W-2 employee. Right?

That is correct.

[Oblong]

@lonestar - yes, the contract I have is still available to new agents. We are not 1099's like many captives have gone to. I'd prefer not say my carrier but they are one of the Top 20 largest in P&C in the US.

So, you with a carrier, that to a new prospective agent trying to get into the agency business, offers an arrangement the equivalent of a lepricon riding a unicorn on a rainbow, yet you do not want to share what company for other agents to look into?

Nice way to try to dismiss my input. Gave me a giggle at how misinformed you are. Not sure what motivation there could be to give someone false hopes on something like this and it's also pretty narrow-minded of you to think similar plans don't exist out there because I am sure you have gone through the plans of all carriers.

I thought I gave a fair clue that it is a Top 30 P&C company. (Note edit, I mistyped in prior note). You can easily knock 1/2 those out that couldn't fit what I am saying. The reason I don't say the company? I am not sure if I am even allowed to be posting this in any type of official/unofficial stance so I prefer to keep anonymous just to be safe. Probably nothing to worry about but why chance it?

If they can't figure it out then they aren't really interested enough in the first place. I can assure you 100% everything I have said is fact and have no motivation to lead someone on.

[lonestar]

I got a chuckle out of your response. Now let's be serious. I was NOT trying to dismiss your input at all.

It is just that you appear to have an agency relationship with a carrier that is compensating you with something that until now, I have never heard of. I do not proclaim to be an all knowing / all seeing agent. And, I have not been doing this for 50 years either. But just my 20 years of talking with all agents, with all arrangements, captive, IA, etc, I have yet to come across your unique situation.

Again, dismissing was NOT my intent. Curious, yes.

Knowledge is power, and no one has a monopoly on knowledge. Or shouldn't, I should say.

[ED3771316]

Why don't you hook up with an Independent with the understanding that when you break free, you get to take your business.

[pageltd]

Independent. Find a niche that you can specialize in and work it!