Becoming a State Farm Agent

I am an agent with SF and I would not let a member of my family become an agent at this time.

The new contracts are very restrictive, you are an employee, for all practical purposes. They can change the bonus requirements at any time.

Do yourself a favor talk to some new trainees, and ask them how many have debts now of over 70k.


Sad but true. Again, I love this company, but it is 180 degrees different than when my family members became agents.

Still may be the best thing going, but that isn't saying very much.
 
I have a SF recruiter calling frequently, inviting me to group lunches for recruits. Makes you wonder, if it's such a great opportunity, why do they have to sell it so hard?


The great agents that built this company are dying and retiring.

I think about 40% of the entire force will be gone in the next 7 years. 17,000 agents. And a lot of those books are going to be sliced into 2, 3 or even 4 slices.

The math ain't pretty, they are under pressure.
 
All I'm saying is the generation that's used to walking in a grabbing a chair is being replaced by college kids who are graduation and doing far more online.

Our fathers couldn't compre State Farm to Nationwide without sitting eith each. Now they can be compared online - and sold online.

The online cos are putting people in the field.

Buying insurance while you are in college? Online is fine. When you buy a house and need someone to talk to? Not so much.

The old cos are scrambling to have a better online presense, the online cos are trying to figure out retention, which is only accomplished through personal relationships.
 
It would be safe to say that most debt in the first year comes from primarily marketing expenses. Office expenses aren't usually at the top of expenses since you get assistance on all office materials, desks, computers, etc, from SF. Some individuals do incur debts on office furniture because they would rather get their own rather than the furniture available through SF. At that point, it becomes a matter of wants verses needs. Again, a solid business proposal can essentially help you budget your first year.

Depending on where you are, the debt incurred will obviously be different. SF realizes that, so signing bonus are different according to the market you are entering. The current minimum is 18k. I am recruiting to an area that right now where I can offer a minimum of 24k for example.

It is also possible to quality for additional marketing bonuses on top of the signing bonus, but that is at the discretion of the Field Executive you are aligned with and how much budget he has been allocated.

The bottom line is that you are opening a business. As with any other business, you should be prepared to incur some debt. But a well planned business will obviously do better.

I personally haven't seen someone with that much debt, and I'm in California.

Do the math...if you are using 18k cash from State Farm, 25k line of Credit from SF Bank (which every agent receives), and 50k of your own funds (required), then that is nearly 100k of investment in your business already. If your going into further debt then the obvious answer is that the agent is not producing at a sufficient rate.

And yes..SF only uses internal recruiters.

I don't want to be negative, but it is cheaper for an agent to get their own furniture and fixtures on their own. The Hon package is not a good deal.

For others, SF gives you computers/printers (only to a certain degree based on policy count and hooks up the internet).

I love SF. I know you are just trying to do your job. Maybe your post about "desks" was a typo. Other office materials?

I paid for every cent save for one box that showed up, and those are full of apps. They are free.
 
We have an over 50 yr old who just got his contract. He moved his book of business 10 miles away to a smaller town. We told him to stay put, the AFO said it was a good idea. Most of his clients moved back to another agent in the town they started in.

He will be out of business in a year or two.

At least he picked his poison.

Sf sliced off a big chunk of business and MADE the tica agent (take them 20 miles down the road to an area that will be booming in a few years.

He's in year 5 and is in debt $250+. Great agent, got so deep his father mortgaged everything as losing is not an option now.

$250K.

Not a lavish office, him and one team member (now, he came on when they made you hire 3 AND a FSR)
 
My negativity is directed at the recruiting process, and the relationship between management and the agents.

SF has been fantastic to my family. I am very fortunate. I have no debts, and have the freedom to spend time with my young children. The agents, claims and underwriting partners are fantastic.

My beef is with the treatment of the new tica agents. It is not ethical in my opinion.

Good luck to you. Use your real estate contacts to write HO's. We have had good luck, getting referrals from mort brokers/realtors by getting dec pages to them asap, and giving $10 gas cards for their referral. Also the Phoenix first to die policy is very competitive (at least in my area) to cover the mortgage.


X2...Most of the E's Ive talked with HATE the recruiters. They keep score on how many people they recommend that make it VS the mass numbers the recruiters push through.

Guess who is ahead?

Not trying to dig on Mr Recruiter, he's just trying to do his job.
 
I ran into all of the above and more as a Captive Farmers Agent. I looked at the Allstate process and it is the same. It is really difficult to make a living with any of these programs for the first 5 years. At that point your renewals are paying your expenses, but you still have to hustle the financial and life to make a good living.

I hit all my numbers, won the plaques and awards and even then decided it was too long a road to travel. I was never told the whole truth and a lot of things were brushed over or not mentioned at all. They have tightened the programs so much it is nearly impossible to make it.

The most useless person in the Farmers organization? The District Manager.

I've heard that. I'm finding the same in other cos as well.

The window seems to be gone.
 
I am new to this forum and in the VERY beginning stages of trying to become a state farm agent. This thread started out optimistic and positive and as I kept reading turned a little negative and there seems to be some tension.

Although I do have a very successful agent as a friend and mentor I also have cards stacked against me... age, credit, and education... I have a lot of sales, management and entrepreneurial experience though, I have a strong business plan and I am numbers driven. I have literally dropped everything in my life to focus on getting my own agency- but not just any agency... I have fallen in love with State Farm culture.

Now, back to the process... does anyone have suggestions for business plans, the interview process, a time line from start to finish ect? From your experience what worked well and what didn't. I'd just like to gather other opinions besides my mentor's to make sure I'm as prepared as possible.

Thanks so much!!!!
Birdie


don't take this as negative. It is realistic.

It is very easy to get infected with the idea. I did, and to some extent still am.

It gets complicated, but it has everything to do with the new contract. The one you are given 30 minutes on in training but don't really understand until you've been in the game awhile and realize it is designed to cut your pay every single year you don't put up what can be unrealistic numbers.

If reality is negative, so be it.

I still love the co, to. Just take off the blinders and make them teach the contract to you. Or not, because if you ask too much (a lot of s,e, & cs don't understand it either).

All of my Dafo management was still in debt from agency.
 
Aside from the contract being unfair, you have to deal with state farm employees getting agency assigments for their career tracks. I know a former recruiter who is "serving time" as an agent. Guess how many autos he was assigned? 4500!! not kidding. Yet, if you are from outside the farm, you rarely get 300. When he goes back to corporate in Bloomington, guess some other lucky internal candidate will get his book. We can all hear about how successful they are in the current contract!

To become an AFE, you have to be an agent. Common practice.

This isn't because the company is evil, it is because they want to try and match the commissions so the person won't be taking a huge hit in income.

I have seen this with AFCs, but I had no idea recruiters were on this path as well. Recruiters aren't thought of very highly with the Field Leadership I've come into contact with. It is a relatively new position.

They didn't need them before the new contract. People were lining up on their own prior to that.

To be fair, coming from a State Farm family where the 97 isn't even understood, I went in with huge blinders....
 
Not all opportunites are equal, that's for sure. I took over an agency small by State Farm standards (950 auto & 350 fire) in 1998. I am on the aa97 contract, of course.

Other agents that started at the same time got much larger books of 1500-2200 autos, but they were in more saturated markets. In my county, I am the only SF agent. Others passed up the agency I took, but I've grown by an average of 160 autos a year and have gone from having one staff person in my second year to having two in 2001 and three since 2005. I would go into debt...until getting the bonus the next spring.

I'm in a rural market, so premiums are low, but I've been netting $100,000 to $130,000 for a few years now. And every year I add another 200 cars is another $20,000 pay raise (unless they lower premiums again)

The problem is that any contract is a one size (read commission) fits all situation. Agents in areas with high premiums in relation to expenses have it easier, of course. If the company would pay a higher commission on the first chunk and then decrease after a certain amount ($1000/year) indexed to inflation (similar to the way work comp is done) the agents in areas with lower premiums would have more success and the rest would still be plenty rich.

What I've noticed over the years is that insurance agents in general do not understand the math of ROI, direct mail, staff investment, etc. It is good to be in a business where so many of your competitors are so uncreative and really so poor at analyzing the numbers. If you are good at these things AND at managing a team AND at keeping customers happy and your area's demographics (agents per population, competition, premium levels) are in your favor, you can do really well.

Every day I see State Farm give our customers the benefit of the doubt, trying to be as fair as possible. They have been very fair with me and I am not "connected" not having any relatives as higher ups in management or even agency. I love what I do, although it is difficult at times. Glad to be a State Farm agent and can't imagine being with another company.
 
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