Farmers Insurance Retail Program

[todd02]

I own a Farmers Agency and recently broke 1,000,000 in Net commissions after 10 years. Let's put it this way... if I was interested in massive scalability and building a 20-25 million annual business then no way you can do that as a captive. You really are Capped as a captive. You'd have to go Indy. However, have no real ambition to grow past a handful of employees and make more than a doctor? It's much easier path than Indy model. I should add there is risk going captive as the industry is rapidly changing. I really believe in 10-15 years captives are going to start consolidating as the auto industry goes to more automation. Home insurance and commercial is the future. Farmers has an amazing open mentality on commercial. You can write anyone as long as Farmers isn't eligible.

 

[insurance1822]

Of course, $1,000,000. Very convenient number there..

 

[todd02]

That doesn't even make sense ... I said broke a million... convenient number? Or a big ass number that took ten years to crack. Join my Think Tank group I have plenty of evidence I post. I don't hide behind a forum.

 

[rollinghills]

I have read everything that I can get my hands on. I still have a real estate brokers license from years ago. Would have figured the Insurance industry would have been similar, but different if that makes sense. Wow was I mistaken - it is massively different and much more complicated - more nuances and more specialization by a factor of 10. Not necessarily a bad thing, but just taking me a while to digest everything (trying to walk-in eyes wide open). If I was younger, I might lean more Indy or New York Life type route.

I own a Farmers Agency and recently broke 1,000,000 in Net commissions after 10 years.

Congrats on this.

You really are Capped as a captive. You'd have to go Indy. However, have no real ambition to grow past a handful of employees and make more than a doctor?

No doubt that Farmers hasn't helped their cause with too many agents, unnecessary chaos, not vetting new agents, etc., etc. Honestly if it wasn't for some the crap that I have read, this would have been a much shorter putt. The Farmers Retail program is strong - potentially very strong IF you can perform. I am in a unique situation as I have resources many other newbies probably don't have which is factoring into my decision. I don't need this to last 30+ years, but 10-15 would be great. Assuming I jump in, everything that I've read says that I will go Indy at some point if I stay in the industry. I've come up in an environment where career pivots were the norm every 5-8 years so the thought of changing / pivoting is virtually a given anyways. Between consolidations, new business models, and the "Amazon" factor - the insurance industry will likely look more different than similar in the next 15 years, but that is not unique to the insurance industry.

Farmers has an amazing open mentality on commercial. You can write anyone as long as Farmers isn't eligible.

I've heard this as well - can you elaborate further on the details? I would love to understand how to maximize the commercial piece based on Farmers stance. I have owned a number of businesses with as many as 150 employees so I have some knowledge from the client side.

 

[todd02]

You can write any commercial sic code that isn't Farmers appetite with any carrier or brokerage. I know a few large Farmers commercial agents who have massive niche books in outside commercial. Not my thing but at least you can.

 

[Markthebroker]

Farmers has an amazing open mentality on commercial. You can write anyone as long as Farmers isn't eligible.

You may want to double check on that: "You can write anyone as long as Farmers isn't eligible" I don't think the new Farmers contract allows that. I am pretty sure it doesn't.

Furthermore, whenever I come across a Farmers commercial policy I get so excited I literally giggle and shake. I'm not exaggerating. I actually giggle and shake. Since most Farmers agents don't know what they are doing, the policies (about 95% of the time) are improperly written, and after I correct the mistakes, I am going to be about 30% to 50% less premium. Basically, any time I see someone has a Farmers policy, I know it's almost always a slam dunk win.

If you plan to go commercial, don't go Farmers.

 

[Markthebroker]

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.

Being a captive agent, is kind of like trying to be a mechanic with ONLY a screwdriver and a hammer. Being an indy agent is like having a complete workshop.

Comparing going Farmers to State Farm to Allstate is like comparing a crack addiction to a heroin addiction to a meth addiction. They are all bad.

If you go to your doctor and say you are thinking about trying meth, he will (hopefully) tell you to do something healthy like go for a walk, eat a salad. Do something healthy instead. That's basically what happened here.

If you go to any group of professionals with a bad idea, they are going to discourage it.

 

[Allen Trent]

Being a captive agent, is kind of like trying to be a mechanic with ONLY a screwdriver and a hammer. Being an indy agent is like having a complete workshop.

Comparing going Farmers to State Farm to Allstate is like comparing a crack addiction to a heroin addiction to a meth addiction. They are all bad.

If you go to your doctor and say you are thinking about trying meth, he will (hopefully) tell you to do something healthy like go for a walk, eat a salad. Do something healthy instead. That's basically what happened here.

If you go to any group of professionals with a bad idea, they are going to discourage it.

have some humility & respect for those that paved the way for you to be so successful and arrogant.

if it wasn't for all those horrendous captives that you look down your nose at, that have most of the national marketshare, most indy agents wouldn't even be in the industry. The captives are the ones that put up their money to hire most of the brand new green hires in the industry.

Both have their place. I don't look down my nose because most indy are too pompous to take time from their elephant hunting of huge commercial to assist clients and prospects with personal lines PC, life or annuity. funny that the indy with all the ability to contract with hundreds of carriers tend to have only a few carriers they place PC business with to max out contract & bonus levels.

I rarely see a PC client of an Indy that has any life insurance.To use one of your derogatory type analogies, being a indy that does commercial only is like a Heart surgeon who performs surgery not telling you he saw a tumor on your lungs cause he was too busy & worried about making max income on heart surgeries and he was shaking and giddy about the next heart surgery pay he would make.

I have friends who are awesome indy & own huge agencies. I personally respect them, but they also respect the role that multi line captives play. we refer business and employees between us when it is a better fit.

 

[Markthebroker]

The captives are the ones that put up their money to hire most of the brand new green hires in the industry.

You are 100% correct. People with 0 experience in the industry are usually the only ones willing to work for a captive. This increases the risk, cost, and employee turnover for captives making their job harder vs. indy. Advantage: indy.

funny that the indy with all the ability to contract with hundreds of carriers tend to have only a few carriers they place PC business with to max out contract & bonus levels.

Once again you are correct. Indy agents know exactly what markets to go to and place with the most appropriate and competitive markets (there are usually only a few), instead of being forced to place all with one market like captive. Right again: advantage indy.

I rarely see a PC client of an Indy that has any life insurance.

Right again! I have my personal insurance with State Farm. I am single with 0 dependents, well invested and diversified, and mostly retired. My State Farm keeps pushing life insurance, not for my benefit, but because she is forced to by SF. When I helped build a scratch SF office in the beginning, we blew the doors of home and auto, but the life insurance were not enough, so they cancelled our contract. Advantage: Indy.

captives that you look down your nose at, that have most of the national marketshare,

Right again! Captives have most of the personal lines marketshare, while indy has most of the commercial. The higher turnover, less profitable, lower premium personal lines policies go to captive, while the indy agents have the majority of commercial. That's why the captive companies are FORCING the agents to shove life down their clients throats, in the hopes that it will increase retention and slow the bleeding to the online and tv commercial cartoon character personal lines insurance companies. Advantage: indy.

Wow, we agree on every point!

 

[Allen Trent]

You are 100% correct. People with 0 experience in the industry are usually the only ones willing to work for a captive. This increases the risk, cost, and employee turnover for captives making their job harder vs. indy. Advantage: indy.



Once again you are correct. Indy agents know exactly what markets to go to and place with the most appropriate and competitive markets (there are usually only a few), instead of being forced to place all with one market like captive. Right again: advantage indy.



Right again! I have my personal insurance with State Farm. I am single with 0 dependents, well invested and diversified, and mostly retired. My State Farm keeps pushing life insurance, not for my benefit, but because she is forced to by SF. When I helped build a scratch SF office in the beginning, we blew the doors of home and auto, but the life insurance were not enough, so they cancelled our contract. Advantage: Indy.



Right again! Captives have most of the personal lines marketshare, while indy has most of the commercial. The higher turnover, less profitable, lower premium personal lines policies go to captive, while the indy agents have the majority of commercial. That's why the captive companies are FORCING the agents to shove life down their clients throats, in the hopes that it will increase retention and slow the bleeding to the online and tv commercial cartoon character personal lines insurance companies. Advantage: indy.

Wow, we agree on every point!

I wish you great success and hope you find some humility. You went out of your way to discourage a person getting started in our industry with zero helpful ideas & only disparaging the carrier he was looking into, others & made it about yourself.