Farmers Insurance Retail Program

[fed up]

How much is Farmers now asking in liquid capital? Used to be $0, Allstate used to be $50,000. Allstate is now 100K and I thought I heard that Farmers was now 50K. With your paid staff, rent, utilities, equipment, etc you will have an office space which will havean expense at least 50K in the first year. If you make your numbers with Farmers they will ADVANCE you preset amounts. If you continue to hit your numbers the debt from the advance will be excused. If you don't hit your numbers you share the debt with your Regional manager (or whatever term they are using today) and your commissions will be reduced by a percentage until those debts are recouped. Farmers used to let you rent a desk in a real estate office but those days are long gone. Both companies frequently change the commission structure. I know of successful Farmers agents who were forced to sign a new agreement and then slowly lost everything. My advice to anyone going into the insurance field would be to get hired by an agency and learn the ropes so that you can become an agent later and know what you are doing and how to be successful doing it.

 

[insurance1822]

Farmers is trash. This business is about the long term & everything you’re posting appears to be motivated by short term goals.

Don’t say you weren’t warned.

 

[Allen Trent]

Ask Farmers for 2 things in writing.

1. Total # of agents contracted in last 5 yrs

2. What % of those agents netted 130k after expenses

It will likely be not 50% to be average type producers, but it will likely be 1-5%, meaning the unicorns.
Also, they likely can't give you these facts as they only know the gross revenues of the producers as the overhead, payroll, benefits, taxes & marketing costs of the agent would be on an agents tax return that carriers never see.

Most recruiters & sales managers speak in gross revenues because most of them are W2 employees with no costs & overhead so they grossly underestimate & have no clue on the actual costs of operating a PC agency operation. This is not just Farmers, it tends to be true with all carriers in that space.

 

[insurance1822]

Just lie about your experience & join an IA group.

 

[Mike007]

I don't know if Farmers is competitive in your area or not but where I am located, it is not competitive at all. Pretty much everyone and anyone can beat Farmers' rate.

People always say don't sell based on price, sell on value. Value will only go so far, considering that other companies also have value of their own. Hard to convince someone to come over when your prices is $500 a year more with the same coverage.

Now, it is not impossible to make it in Farmers. There are successful Farmers agents out there. With that said, an acquaintance of mine who once recruited for Farmers said if you can make it at Farmers, you can make it anywhere in the insurance industry. And I believe him because making it in Farmers is no cake walk.

 

[rollinghills]

...watch out for the 'loans' that trap you in.

Appreciate the advice

How much is Farmers now asking in liquid capital?

Looks like the amount they are quoting is approx. $50k (some sites say $25k-$50k while the material that I received says $50k) As far as the building overhead goes, I already own some office buildings in good locations that would most likely more than qualify so my overhead here should be low starting out, but I appreciate the heads up. One question though - I would have thought that once you were on a contract that it was good until the term ran out. Are you saying that they make you change contracts mid-stream? Any idea what the average contract length is? I guess that will be a good question for my next round with them.

Ask Farmers for 2 things in writing.

1. Total # of agents contracted in last 5 yrs

2. What % of those agents netted 130k after expenses

It will likely be not 50% to be average type producers, but it will likely be 1-5%, meaning the unicorns.

Appreciate this advice - I am just now getting deep enough with both Farmers and Allstate to see what the expected nets are and how they are getting to those numbers. I'm sure I will have more questions for the board once I know what they are painting as the targets that need to be hit.

Just lie about your experience & join an IA group.

Appears you are close to TN - want to branch out?

I don't know if Farmers is competitive in your area or not but where I am located, it is not competitive at all.

Good advice - I have independently reached out to several agents in various markets in my state for advice and input in this area. I should have a better feel over the next 7-10 days on where this stands. Obviously don't expect to be the cheapest, but definitely don't want to be the most expensive either.

Appreciate all the input and advice. As I previously mentioned, I am looking a multitude of opportunities (going back the corporate route, looking hard at the insurance biz, franchises, existing businesses, etc., etc.). The problem with having owned a biz or two is that when you start evaluating new opportunities everything is fair game. Fortunately or unfortunately, the internet and Amazon have changed just about every industry so what was a good biz or gig 10-years ago, may not be so much anymore. Can make it tough when trying to evaluate the future runway for a given opportunity.

 

[Mike007]

Rollinghills,

Have you look into ANPAC? American National and their captive agency. I did a quick search and found some agents in your state.

American National have great life insurance and very competitive Auto and Home Insurance (in my area). If I was given the choice between Allstate, Farmers, State Farm, and American National, I would pick American National.

 

[indienoise]

Don't take the farmers rep at his word. Indy's don't make money? You can't own your book if you work for an IA, but Farmers will miraculously let you own your book when all the other prisoners don't? How's that Kool aid taste? You're literally ignoring the advice of the one guy in this thread you wanna be. He's laughing at your paltry 130k.
Sure the bonuses sound great but verrrry few will get those. In fact, most agents will fail. In reality, working with an IA who takes a split and otherwise leaves you alone will let you as much or higher commission rate than a captive, without the rules and regulations and old-school marketing costs they MAKE you spend (that don't work) and high rent retail locations captives make you have...but he probably didn't mention all that when he dangled that bonus carrot in front of you.
I'm not saying captive is the wrong choice for you, it might be just what you need...just think for yourself, don't let a sleazy rep think for you.

 

[rollinghills]

The original question was on the Farmers Retail program - not indy vs. captive. To be honest, I'm a bit amazed about how much hostility there is toward the captives on this board not only in this post but in others I have read across the board as well. Your indy - great. Didn't ask that question. As far as succeeding in a captive environment, I image its about the same as trying to succeed on the indy side as well - they both have their pros and cons. Indy has multiple carriers from which to quote from and the captives have billion dollar advertising budgets. Either way you have to work. The one thing I know about good sales people is that it doesn't matter, they find a way to succeed.

As far as the captive agents littered by the side of the road, I'm sure there is more than a few on the indy side as well. I agree that I've had to dig to get to the warts on the captive side and they are selling a rose colored picture. However, you are kidding yourself if you don't think the packages and opportunities they are offering aren't sound - they are. The fundamental questions that they don't immediately address are how many customer are you going to have to contact, how many appointments are you going to have to set, and how are you going to get those leads? Without this piece, I don't care if you are indy or captive - you won't succeed. I'm sure telling candidates that they need to contact 100+ people a week in order to set 15 or so appointments to sell 10 policies is not sexy. A solid business plan appears to be critical to answer these questions. Sales is tougher than it looks no matter what industry you are in. Especially if you are making $200k+ a year. In my experience they don't just hand that out to everyone. The $130k was to get an idea of ramp time, not eventual total comp.

If your indy and happy - great. If your captive and happy - great. As new people come on here for advice - how about toning down the rhetoric. I understand that everyone has their 'camps', but not everyone asking advice or trying to find out information wants to here your stump speech on why the other side is so horrible. How about selling the world on why your side is so great instead. I can't tell you how many posts I have read across this board where the other side is made out to be the devil without once extolling the virtues of their own side. I'm sure there are some valid points, but honestly comes across as sour grapes.

For everyone that has given sound advice - thank you. I would still like to hear more input and personal experiences for those that know about the Farmers retail program.

 

[fed up]

Farmers has a good program, depending on the state you wish to conduct business. In California there is an agent on many street corners, in Virginia Farmers has pulled out or almost pulled out numerous times because they came in and tried to buy business until their loss ratio was through the roof. they used to allow agents to switch customers from Farmers to Bristol West but now Bristol West is their sub-standard carrier and if you go there you are stuck for 3 years. They have had great agents and great managers, they have had terrible agents and terrible managers. They have tried call centers and competed against the agents in the field. They used to require 40 PIF (policies in force) before you became a full agent, now they want 50K. when you hit 40 PIF you could opt for a 90 day stipend in order to get an agency up and running of 3K per month. If you did not hit certain numbers the money became a debt, repaid before you received commissions. they have taken massive rate hikes since 2010, sometimes as much as 30% per renewal. there have been at least 3 different agent contracts since 2010. If their rates in your area are steady you can do well. if your area is underrated and rates are fluctuating you could write a lot of business and loss it all at renewal. The 250K retail program is probably better suited for an established book of business to upgrade an office. You will be given a chance to get a line of credit when you go to agent school. You will need 50-100K the first year for expenses and salaries unless you combine your office with another new agent. Renting a desk at a real estate firm is now frowned upon. You will need to get any staff licensed. If they can't bind business they are not as useful to you. Learn the business from an established agent or agency before you tie up 50K of your money, get a loan for 100K more, and go broke in less than a year