Considering Becoming Farmers Reserve Agent

[PRColorado]

I have 10+ years insurance background, the last 6+ years with State Farm (working in agent's office); licensed in all lines. My current job involves both sales & service.
I met with a Farmers DM in my area recently & he explained the opportunity. While much of it sounds appealing, much also sounds like a big financial risk. Currently I make a salary plus very small commission. While I don't make a lot - we depend on my pay. If I say "yes", it means we'll have to take $$ out of our retirement to cover the first 4 months. I also realize that I could wash out or hate it at some point during the first 2 years, and then would be responsible for paying back the subsidy (once it kicks in).
Although I love what I do for SF, I am trapped into a job with no chance of pay increases and no chance of advancement. I just found this forum and am looking for honest input. There is a lot of trash-talk against Farmers online, but not sure what is valid.

 

[VolAgent]

Since you have some experience with State Farm, I suggest you ask yourself these questions first.

1. How many Farmers' policies have I replaced?
2. Why did I replace them, was it price, quality of policy or company, service by agency, person just liked me better, why?
3. How many policies have I or the agency lost to Farmers?
4. Why did we lose the policies, again price, quality, service, what?
5. It may be of limited value, but ask around and see what people say about Farmers?
6. I am going to assume you've already tapped your natural market for your position at State Farm, where are you going to get your prospects from? Are you going to buy leads, cold call, walk and talk, what?
7. Does your contract with the State Farm agent prevent you from taking clients with you?

I'm sure others will have something to add. But I'd say that is a good start before jumping in. The Farmers DM may be a wonderful guy, but remember he gets paid to recruit. His district is expected to produce so much premium a year and grow by so many agents a year. While you can do that the right way, most resort to the revolving door method and see who sticks.

 

[MikeLentini]

I started off in the insurance business in Farmers school. I lasted 3 days before I realized what was going on.

There were 22 "new hires" in the 5 day class. They spent half of the time trying to get us to "practice" writing policies on ourselves family, friends, neighbors, everyone in our "natural market"

We were also told that as Farmers agents retire, quit, die, their book of business will matriculate to the new agents to help them build their own books.

Fast forward 3 years: I wrote 5 policies on myself for practice. After I quit, the policies were transferred to the district manager that recruited me, and they are still there. Guess whose "book of business" the new hires are helping to build? The District Managers.

Good business model that I witnessed.

1. "hire" anyone that can obtain a license
2. they write 5 to 20 policies on their "natural market" for practice
3. They figure out it is a big PITA to sell P&C for them.
4. agent quits and book is transferred to DM
5. DM's book of business grows and grows

 

[PRColorado]

Good input from both of you. I appreciate it.
I have heard lots of "trash talk" about Farmers, but mostly from State Farm - so I don't know what is valid. I have heard that Farmers hires a large number of agents, knowing that the retention rate is very low.
My personal contacts are very limited, we are relatively new to this area in Colorado - so I don't have any hopes of bringing business from my existing contacts. I also signed a "non solicit" contract with SF - so cannot contact any (of my) current SF policyholders. "Lapse can" is big these days, and more so than ever clients are shopping for price alone. I have retained much of the agency's business because they like me (as opposed to the agent). But, when push comes to shove, money dictates. Sometimes SF rates are lower than Farmers, sometimes Farmers is lower than SF.
My experience writing for SF is very different... much cross-selling to existing book of business; many current SF clients move into this state and need to transfer policies; a few walk-ins/call-ins, and some call from agent's direct marketing. The Farmers DM apparently buys leads for new agents, but I can't pin them down on how many. I also know that at current agency the few times the agent bought leads they never had a good rate of return.
At this point in my career, I do 65-85% of the sales and service at an office of 1500+ households. I am helping the agent grow/retain his book, and my professional/financial development is limited. While exploring the options is exciting, my biggest concern is a financial hardship for my family.

 

[VolAgent]

Then you might be able to succeed. It seems that people do like you, and people like to do business with people they like. The real measure of this is, have you been able to keep people from switching to another carrier when SF is only slightly more expensive? Personally, I believe worth paying a small premium for quality service, not a large premium, but a small.

I have heard much the same as you about Farmers' recruitment strategy, so there is probably some truth to it. If you have what it takes to succeed, the main way it will affect you is when people get tired of the new Farmers agent of the month.

The main problem with leads, is that the people tend to be uninsurable and generally they are tire-kickers or price-shoppers. If you decide to buy leads, make sure you have other marketing programs in place. Your best business is going to come from referrals and word of mouth. Try to meet as many people on a favorable basis as you can.

 

[agentjaf]

I can tell you that I just left State Farm a month ago to work for Farmers. I have been in insurance about 8 years and have a lot of background. I was in the same position as you at State Farm- very low salary, very little commission and no advancement opportunity.

Over the past month, things have gone EXTREMELY well with Farmers and I feel it is the best move I have ever made. I am about a quarter of the way to moving from a reserve agent to career, I have a district manager who is VERY supportive and willing to help with any issues and trains very well. I have been told your DM makes all the difference with Farmers.

We did end up using some of my retirement money to get us by until I start earning a salary, but in my opinion, it's been worth it and I haven't looked back yet and regretted this decision.

Hope this helps, Colorado!

 

[PRColorado]

Agentjaf: Congratulations! I am very happy to hear that you are doing well and not regretting your decision!
Can you give me an idea of how many leads your DM has given you? The recruiter told me that the DM purchases $5 leads, and "gives" a certain amount to Reserve Agents. After that, I believe the agent has to purchase his/her own leads from the DM.

 

[MikeLentini]

Here is their recruitment strategy in a nutshell. Hire everyone that applies and its sink or swim time. 5% will swim, and 95% will sink.

Say, for instance, Farmers was hiring lifeguards for their corporate office swiming pool.

Recruiting pitch: We at Farmers have the BEST POOL, the warmest and cleanest water, and we pay more than you will make anywhere else. Also, you will get a FREE tan, and free views of BOOBS!!!!! Just give it a try...

This would be their "1 week training"

20 new recruits show up for "training" Monday morning, and they teach you CPR, applying sunblock, how to climb up into the lifeguard chair, , you know, lifeguard things, and how to spot a turd vs. a Snickers Bar floating in the pool, etc.

At the end of the week, they walk all 20 of you to the 10 foot deep end of the pool, shackle a 100 pound weight around your necks, and push all of you in the pool while chanting GO. GO. GO, you can do it.!!

19 of the "trainees" drown, but 1 figures out how to remove the shackels, and he swims to the surface and survives.

Unfortunately, the "drowning" of many of the "agent trainees" will last about 3 to 6 months, not 3 to 6 minutes, which would be more humane.

Get the picture????????????

 

[agentjaf]

Colorado- My agent has given me quite a few leads so far. I can't tell you an exact number, but it's a fair amount. My DM did not tell me he would give me a certain number of leads and I also don't have the option to purchase any from him. That is up to each individual DM how they handle it. He does subscribe to a lead site though and divides the leads equally for all of the new agents, but there is not a limited number I'm entitled to. My situation is also a bit unique in that I am inheriting a book of business from a retiring agent, so I am guarenteed a steady income from renewals once I am a career agent. Hope this answers some of your questions.

 

[dcorrp]

MIkeL is being a negative Nancy. Don't worry about the way Farmers recruits. Just worry about what you are going to do to be successful if you decide to make the leap into becoming a business owner. Both State Farm and Farmers will give you the tools you need to be successful. It will be very hard work and you will not be making a ton of money, and the money you will be making will be put back into the business. You will definitely be at an advantage having experience in insurance and sales.
Also, there are a lot of ways to get free leads or cheap leads when you are starting out. Go door to door in your neighborhood. Introduce yourself as their neighbor and a new agent. I choose a few newly developed communities where I live and had a lot of successes. I found Farmers rates almost unbeatable on new homes (at least in California).