Jim, If they left all of the policies would be dumped on Citizens. As an independent agent I want the competition…and I want to keep the private market as healthy as possible.
This looks like a good sign. McCarty may be looking for a way out of his grandstanding demands. And State Farm may be able to back down a little too. Negotiating is better than taking your marbles and going home.
I just don’t understand how the state can force a business to stay in a particular location knowing that location is bad for the business. They are basically forcing State Farm to lose money by denying their rate increases and then preventing them from leaving. How can the state do this? Give them their rate increases, the market will take care of itself. People will get fed up with the high rates and shop elsewhere.
Jim, State Farm won’t be dumping their policies into Citizens. State Farm agents will not be allowed to move any policies into Citizens, only takeout companies that they have special agreements with.
However, since most of these takeout companies are new, small domestic insurers, they are primarily dependent on the Florida Cat Fund (taxpayers) who will absorb the financial burden that is coming when we get the first hurricane and the Cat Fund goes broke.
It’s in the state’s best interest to keep State Farm here because they have $500 million in capital and $9 billion in private reinsurance. If they go, those financial resources go with them, and more than likely must be absorbed by the Cat Fund (taxpayers), which is expected to have an $18 billion deficit. In addition, there are not enough financially stable private insurers to absorb all of State Farm’s policies.
Letting them leave would be another foolish mistake on the part of Crist and McCarty.
What I find is strange is, doesn’t this sound like State Farm is purposly trying to put its own agent partners in a bind. We don’t want you to write homeowners for us anymore, and you can’t write for other companies, and then the state chimes in and says forget about citizens. In essence aren’t they putting their own partners out of business because those insureds are going to have to go to IA’s?
Yes, it’s possible that it can put some agents in a “bind” but SF & their agents are pretty resourceful. They have many products they can write and SF has not backfilled many vacancies created by retiring agents. This has allowed SF to assign these agents’ policies to existing agents, thus helping with their income. My guess is that SF has played a good hand of poker here and they know exactly what they are doing.
True, I can’t remember now was State Farm pulling everything out of Florida or just home owners? Even so I imagine, home owners must of made up a good portion of agents book of business, even just losing that could cause some insureds to go else where with their other products to simplify things into just having one agent.
The bullying tactics by State Farm are in fact hurting its own agents and State Farm doesn’t seem to care. It appears State Farm is using this problem to get rid of many of it’s older agents who have the old contract. This is a similar scenerio to what they did in New Jersey. State Farm said they were leaving and got many agents on the old contract to retire then State Farm decided to stay, suprise, suprise. My guess is State Farm will be staying after all of this hoopla since they have already trimmed about 100 agents that had the older contract. And yes, no suprise, the older contract paid better commissions and had termination payments something the newer contracts do not. So if State Farm treats its own agents like this how would you like to be one of their policyholders?
I’m in North Florida and almost all of the SF Agents have now opend an Independent Agency in someone else’s name right in their office on an agreement from a Tampa Broker who is furnishing them companies based on a 50/50 split withe the agent paying the expense and overhead..Boy do they have a lot to learn about the Real Insurance World…
If State Farm is such a bad carrier who treats their agents and clients so bad, Why are they the largest writer of homeowners in the State. At one point they had 25% of the homeowners market in Florida. Sounds to me that these agents who never have represented a quality homeowners carrier in their lives, dont like getting their A*ses kicked by a quality A++ writer that can raise their rates by 47% and still maintain marketshare. Why because they are a better carrier than the companies these agents represent with no surplus and relies on a bankrupt state to bail them out after a storm.
Let me get the overview…State Farm vs the FL dept of Ins???? What do you think the Vegas line would be on who wins in that one???? Maybe prohibitive line??
Get out of the way and let the FREE market work!
Sarah I’ve worked with many A+ rated carriers in my time. And anyone who’s not brainwashed by State Farm was more than willing to change carriers to save 15 to 20%.
The problem now is the A+ rated carriers aren’t writing home insurance in our state. Now even those customers who would normally have made a change are sticking it out with State Farm. I can’t say as I blame them, although don’t put it past State Farm Fire and Casualty to let little brother go bankrupt to prove a point.
I’ve read the various comments and in reality none of them matter. I’m an Agent in the business to Make Money, and all of you in reality are too. No company in todays market makes an underwriting profit. They simply use the insurance cash flow to try to make money on other investments. That’s what it’s all about. If the numbers were not so high for SF in Florida, they would have been gone a long time ago. Cut the BULL and admit it’s all about the MONEY for THEM and US. The consumer just happens to be in the middle. The higher the premium, the more I make. That’s why I’m in the business and you too. That’s just the way it is…
Allstate has a company called Castle Key that just wrote my homeowners in Winter Haven with no problem. Forget State Farm when I now have Allstate. Just saed over $800.
Danny,
What is the name of the broker in Tampa? State Farm Corporate should be concerned that their captive agents are finding BRIGHT WAYs to roll, not only homeowners, but AUTO, LIFE, ANNUTIES etc to their new independent agencies. As you know, the process of State Farm agent’s opening Independent Agecies is spreading like wild fire in Florida, Texas, Louisiana, but… corporate is also concerned that EVERY STATE FARM AGENT in EVERY STATE in the USA will want an INDEPENDENT ON THE SIDE to “level the playing field” and ROLL the business when corporate pushes too hard for life production, or whatever. The State Farm agents in FL, TX, etc think their CAPTIVE contract is a JOKE!
Well now, we’ll see who gets the last laugh and the last policy!
“However, since most of these takeout companies are new, small domestic insurers, they are primarily dependent on the Florida Cat Fund (taxpayers) who will absorb the financial burden that is coming when we get the first hurricane and the Cat Fund goes broke.”
Correct me if I am wrong, but aren’t the insurance companies primarily dependent on reinsurance companies? Isn’t that the point of the reinsurance companies?
The higher the premiums the more you make in the short term. However, If you offer lower premiums, your customers are less likely to leave you and therefore over the long term you will make more. Thats why we always try to find the best possible price without sacrificing in quality.
You are misinformed. State Farm’s AM Best rating is a B with a negative outlook. Believe it or not there are still a few carriers in the state with an AM Best rating higher than that. Bankers, Florida Family, and Universal Insurance Holdings of North America just to name a few. All of which are reinsured by companies that have A++ ratings. (If you look up the reinsurance companies even for the Brand new companies they all have AM Best ratings higher than A) If State Farm is kicking A** they wouldn’t need that rate increase. The only thing State Farm has that the others don’t is Brand Recognition and a giant network of agents. Thats it.
That STATE FARM BRAND RECOGNITION should only be used for STATE FARM POLICIES, in particular AUTO, LIFE, ANNUITIES, CD’S etc… However, there are now many STATE FARM AGENTS that have INDEPENDENTS ON THE SIDE and are now ROLLING, not only homeowners business, but AUTO, LIFE, ANNUITIES, etc to their INDEPENDENT AGENCIES. Furthermore, the INDEPENDENT AGENCY ON THE SIDE gives our CAPTIVE AGENTS a superior bargaining advantage as they have a very easy avenue to MOVE STATE FARM OWNED BUSINESS to the INDEPENDENT. When they retire or must be terminated, all of that STATE FARM BUSINESS will be ROLLED OVER to the INDEPENDENT. They have the STATE FARM CAKE and EAT IT TOO!
Perhaps STATE FARM CORPORATE should contemplate RENTING their STATE FARM SIGNS to REAL INDEPENDENT AGENCIES so they can recoup some of their financial losses via SIGN RENTAL INCOME.
Why should they be able to dump their garbage to Citizens and burden the taypayers?
Jim, If they left all of the policies would be dumped on Citizens. As an independent agent I want the competition…and I want to keep the private market as healthy as possible.
This looks like a good sign. McCarty may be looking for a way out of his grandstanding demands. And State Farm may be able to back down a little too. Negotiating is better than taking your marbles and going home.
I just don’t understand how the state can force a business to stay in a particular location knowing that location is bad for the business. They are basically forcing State Farm to lose money by denying their rate increases and then preventing them from leaving. How can the state do this? Give them their rate increases, the market will take care of itself. People will get fed up with the high rates and shop elsewhere.
Jim, State Farm won’t be dumping their policies into Citizens. State Farm agents will not be allowed to move any policies into Citizens, only takeout companies that they have special agreements with.
However, since most of these takeout companies are new, small domestic insurers, they are primarily dependent on the Florida Cat Fund (taxpayers) who will absorb the financial burden that is coming when we get the first hurricane and the Cat Fund goes broke.
It’s in the state’s best interest to keep State Farm here because they have $500 million in capital and $9 billion in private reinsurance. If they go, those financial resources go with them, and more than likely must be absorbed by the Cat Fund (taxpayers), which is expected to have an $18 billion deficit. In addition, there are not enough financially stable private insurers to absorb all of State Farm’s policies.
Letting them leave would be another foolish mistake on the part of Crist and McCarty.
By the way, loved you in Gomer Pyle, USMC.
What I find is strange is, doesn’t this sound like State Farm is purposly trying to put its own agent partners in a bind. We don’t want you to write homeowners for us anymore, and you can’t write for other companies, and then the state chimes in and says forget about citizens. In essence aren’t they putting their own partners out of business because those insureds are going to have to go to IA’s?
Come on down! Lets make a deal!
Crist just blinked
Yes, it’s possible that it can put some agents in a “bind” but SF & their agents are pretty resourceful. They have many products they can write and SF has not backfilled many vacancies created by retiring agents. This has allowed SF to assign these agents’ policies to existing agents, thus helping with their income. My guess is that SF has played a good hand of poker here and they know exactly what they are doing.
True, I can’t remember now was State Farm pulling everything out of Florida or just home owners? Even so I imagine, home owners must of made up a good portion of agents book of business, even just losing that could cause some insureds to go else where with their other products to simplify things into just having one agent.
The bullying tactics by State Farm are in fact hurting its own agents and State Farm doesn’t seem to care. It appears State Farm is using this problem to get rid of many of it’s older agents who have the old contract. This is a similar scenerio to what they did in New Jersey. State Farm said they were leaving and got many agents on the old contract to retire then State Farm decided to stay, suprise, suprise. My guess is State Farm will be staying after all of this hoopla since they have already trimmed about 100 agents that had the older contract. And yes, no suprise, the older contract paid better commissions and had termination payments something the newer contracts do not. So if State Farm treats its own agents like this how would you like to be one of their policyholders?
I’m in North Florida and almost all of the SF Agents have now opend an Independent Agency in someone else’s name right in their office on an agreement from a Tampa Broker who is furnishing them companies based on a 50/50 split withe the agent paying the expense and overhead..Boy do they have a lot to learn about the Real Insurance World…
If State Farm is such a bad carrier who treats their agents and clients so bad, Why are they the largest writer of homeowners in the State. At one point they had 25% of the homeowners market in Florida. Sounds to me that these agents who never have represented a quality homeowners carrier in their lives, dont like getting their A*ses kicked by a quality A++ writer that can raise their rates by 47% and still maintain marketshare. Why because they are a better carrier than the companies these agents represent with no surplus and relies on a bankrupt state to bail them out after a storm.
Sarah too bad State Farm Florida is very far from A++.
They are reinsured through an A++ Carrier and are more self sufficent then the other so called carriers operating at this moment
Let me get the overview…State Farm vs the FL dept of Ins???? What do you think the Vegas line would be on who wins in that one???? Maybe prohibitive line??
Get out of the way and let the FREE market work!
Sarah I’ve worked with many A+ rated carriers in my time. And anyone who’s not brainwashed by State Farm was more than willing to change carriers to save 15 to 20%.
The problem now is the A+ rated carriers aren’t writing home insurance in our state. Now even those customers who would normally have made a change are sticking it out with State Farm. I can’t say as I blame them, although don’t put it past State Farm Fire and Casualty to let little brother go bankrupt to prove a point.
I’ve read the various comments and in reality none of them matter. I’m an Agent in the business to Make Money, and all of you in reality are too. No company in todays market makes an underwriting profit. They simply use the insurance cash flow to try to make money on other investments. That’s what it’s all about. If the numbers were not so high for SF in Florida, they would have been gone a long time ago. Cut the BULL and admit it’s all about the MONEY for THEM and US. The consumer just happens to be in the middle. The higher the premium, the more I make. That’s why I’m in the business and you too. That’s just the way it is…
Allstate has a company called Castle Key that just wrote my homeowners in Winter Haven with no problem. Forget State Farm when I now have Allstate. Just saed over $800.
Danny,
What is the name of the broker in Tampa? State Farm Corporate should be concerned that their captive agents are finding BRIGHT WAYs to roll, not only homeowners, but AUTO, LIFE, ANNUTIES etc to their new independent agencies. As you know, the process of State Farm agent’s opening Independent Agecies is spreading like wild fire in Florida, Texas, Louisiana, but… corporate is also concerned that EVERY STATE FARM AGENT in EVERY STATE in the USA will want an INDEPENDENT ON THE SIDE to “level the playing field” and ROLL the business when corporate pushes too hard for life production, or whatever. The State Farm agents in FL, TX, etc think their CAPTIVE contract is a JOKE!
Well now, we’ll see who gets the last laugh and the last policy!
Arthro,
“However, since most of these takeout companies are new, small domestic insurers, they are primarily dependent on the Florida Cat Fund (taxpayers) who will absorb the financial burden that is coming when we get the first hurricane and the Cat Fund goes broke.”
Correct me if I am wrong, but aren’t the insurance companies primarily dependent on reinsurance companies? Isn’t that the point of the reinsurance companies?
Danny,
The higher the premiums the more you make in the short term. However, If you offer lower premiums, your customers are less likely to leave you and therefore over the long term you will make more. Thats why we always try to find the best possible price without sacrificing in quality.
Sarah,
You are misinformed. State Farm’s AM Best rating is a B with a negative outlook. Believe it or not there are still a few carriers in the state with an AM Best rating higher than that. Bankers, Florida Family, and Universal Insurance Holdings of North America just to name a few. All of which are reinsured by companies that have A++ ratings. (If you look up the reinsurance companies even for the Brand new companies they all have AM Best ratings higher than A) If State Farm is kicking A** they wouldn’t need that rate increase. The only thing State Farm has that the others don’t is Brand Recognition and a giant network of agents. Thats it.
That STATE FARM BRAND RECOGNITION should only be used for STATE FARM POLICIES, in particular AUTO, LIFE, ANNUITIES, CD’S etc… However, there are now many STATE FARM AGENTS that have INDEPENDENTS ON THE SIDE and are now ROLLING, not only homeowners business, but AUTO, LIFE, ANNUITIES, etc to their INDEPENDENT AGENCIES. Furthermore, the INDEPENDENT AGENCY ON THE SIDE gives our CAPTIVE AGENTS a superior bargaining advantage as they have a very easy avenue to MOVE STATE FARM OWNED BUSINESS to the INDEPENDENT. When they retire or must be terminated, all of that STATE FARM BUSINESS will be ROLLED OVER to the INDEPENDENT. They have the STATE FARM CAKE and EAT IT TOO!
Perhaps STATE FARM CORPORATE should contemplate RENTING their STATE FARM SIGNS to REAL INDEPENDENT AGENCIES so they can recoup some of their financial losses via SIGN RENTAL INCOME.
LEMAR