Actually a Good Time to Buy Farmers Agency

[todd02]

Farmers in Texas at least is moving to the State Farm bonus model. They are dropping auto from 10/10 to 9/9 but now going from a 7% bonus quarterly to a possible 30% bonus quarterly on all new business and renewal commission. My bonus goes from 40k a year to 150k+ and I don't have to change anything. Also their new agency buys get up to 30% new business commission like Allstates model. Looks like Farmers is taking the best incentives from companies and creating a hybrid.

(Yes my software is going extremely strong and well. Actually in a pilot right now. Hang tight).

 

[nyc2phi]

Farmers in Texas at least is moving to the State Farm bonus model. They are dropping auto from 10/10 to 9/9 but now going from a 7% bonus quarterly to a possible 30% bonus quarterly on all new business and renewal commission. My bonus goes from 40k a year to 150k+ and I don't have to change anything. Also their new agency buys get up to 30% new business commission like Allstates model. Looks like Farmers is taking the best incentives from companies and creating a hybrid. (Yes my software is going extremely strong and well. Actually in a pilot right now. Hang tight).

What's the qualification for the bonus, loss ratio and production?

It's difficult to predict your income on that model, one bad storm can cause years of loss ratio issues if the majority of business is with that one carrier.

Is 9/9 auto only or does that include home?

 

[indienoise]

Ah yes, the "cut commission but dangle bonus in front of the agent" model. Designed to keep the hamster wheel spinning. How much would you wager the qualifications change year to year? I admit those models, especially new agency enhanced commission have got to be tempting, but are definitely designed to be a short term venture. If you're ok with that, you can make a lot of money.

 

[todd02]

They built a way for agents to qualify for the bonus based on underwriting qualifications and not just profit. They think writing quality business makes up 80% of profitability. They give 10 points, 2 of which are 1 yr profit and 3yr profit. The other 8 are things related to the type of business and changes made. It's to ensure agents are writing good business. Pretty simple to track the bonus actually. As long as you are following the rules and a huge one is cross selling, you make up to 30% of your entire new business and renewal commission as a bonus. Pretty sweet gig.

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Ah yes, the "cut commission but dangle bonus in front of the agent" model. Designed to keep the hamster wheel spinning. How much would you wager the qualifications change year to year? I admit those models, especially new agency enhanced commission have got to be tempting, but are definitely designed to be a short term venture. If you're ok with that, you can make a lot of money.

Home commission was a huge drop this year. 20/14 to 14/10. But they initiated a new bonus. Up to 7% of new business and renewal commission. Quarterly. This is the beginning of the huge bonus increase to 30% starting in 2018. You can tell they are trying to take commission from poor quality Agents sitting on their books to give to high quality and hard working Agents.

 

[insurance1822]

Still drinking the coolaid I see. Do you really think the closed door meetings with execs are "let's reward our good agent's."

They were IA & burnt that channel. Tried to come back & no IA would write them. Decided on captive..went on recruiting blitz..now the dust is settling & you'll start seeing the captor begin the abuse.

You're totally at their mercy & farmers best interest is farmers...not yours. In time you'll see the light. If you're makin $ along the way? Well hey I guess it works for you.

Your efforts would reap larger more stable & predictable profits as an IA.

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Still drinking the coolaid I see. Do you really think the closed door meetings with execs are "let's reward our good agent's."

They were IA & burnt that channel. Tried to come back & no IA would write them. Decided on captive..went on recruiting blitz..now the dust is settling & you'll start seeing the captor begin the abuse.

You're totally at their mercy & farmers best interest is farmers...not yours. In time you'll see the light. If you're makin $ along the way? Well hey I guess it works for you.

Your efforts would reap larger more stable & predictable profits as an IA.

And you ever wonder why the largest & fastest growing farmers agency (F & G) opened an IA?

 

[indienoise]

I keep hearing about this, but wasn't around for the farmers fallout...by any chance did this have to do with going direct sales w/ 21st century? What happened?

 

[todd02]

I keep hearing about this, but wasn't around for the farmers fallout...by any chance did this have to do with going direct sales w/ 21st century? What happened?

21st century is shutting down. There are non-renewal offer letters going to customers to go to Farmers.

1822- Both IA and Captive have their ups and downs. I agree I think the competitive market is going to Favor the IA. However, If you're an Agent taking home 400k+ net a year with a decent size Farmers agency and now they are going to offer you an extra 150-200k bonus for doing nothing different. Gotta say that's pretty amazing. Haha.