Please post if you are a State Farm Agent

[0b1kanobee]

Hey, just remember they insure more people than Geico and Progressive combined.

They may be good to their policyholders, but it sounds like they aren't so good to the agents.

Maybe that is one of the secrets to their success. Other industry experts might look at this business model and figure they don't have to treat agents so great to be successful. Maybe the bar they give these agents is set extremely high where they manage to get some super producers out of it and that coupled with whatever else they do well attributes to their success? Another words, they run a really tight ship on all aspects.

 

[VolAgent]

Maybe that is one of the secrets to their success. Other industry experts might look at this business model and figure they don't have to treat agents so great to be successful. Maybe the bar they give these agents is set extremely high where they manage to get some super producers out of it and that coupled with whatever else they do well attributes to their success? Another words, they run a really tight ship on all aspects.

Any company that does not sell direct and doesn't realize that its agents is vital to its success will eventually fail. Size and brand reputation may delay the inevitable, but it will happen. A time will come when such a company becomes completely unable to recruit and retain successful agents.

 

[defender]

As long as SF has a life, bank, and offers financial services, there will be agents. Matrix direct, who is the largest direct writer of life insurance only accounts form .005% of all new life insurance contracts. Why? Because Life insurance and financial services are sold, not bought. SF knows this. SF pays the agent 1/2 of the average comission of any financial services company. Why?

Because they subsidized everything with the Largest Insurance company in North American: State Farm Mutual. The life company is the most profitable of all their offerings. They justify paying squat because they feel they are more than generous with their p&c commissions. And guess what, if you don't sell life, they don't pay you your full P&C commissions. Genius!!!!

SF is the General Motors of all insurance companies. Its legacy and retirement costs are massive. When they complain about their expense ratios to you, look them in the face and laugh. The majority of their selling, advertising, and marketing expense is done for less that 10% of revenue through the agent. Yes, they have national advertising, but they shift most of this cost to the agent in the form of Pave leads, internet leads, yellow page, billboard, radio advertising.

90% of the marketing and Advertising cost is done by the agent. Geico, spends nearly 48% of their revenue on marketing and advertising. So do the math here. SF has a great deal and they know it. And if they're not getting the results they need in a market area, guess what? They will have no problem putting another SF agent 1 mile down the road from you. They make sure this next agent has very good credit and access to about 100k. So SF can pass the cost of marketing and sales expense to the new sucker. They have no problem sucking out that $100k in the form of threats to market more, because the make more money without a dime out of pocket.

The fact is the more you generate on the AA05 contract, the less you net and the more the company makes. They don't care that you're spending 80% of you commission for advertising, marketing, and overhead costs. It's still less than 10% for them.

This is not your business and it will never be. The AA05 is more tight than a standard contract employee agreement. So if you're going to do this deal and survive:

Do what they say to do in the first year.


Then, cut cut cut until your expense ration is 60% to you and 40% to the business. You'll psychologically have the nerve to go in knowing you're actually making some money.

 

[AZAA05]

As long as SF has a life, bank, and offers financial services, there will be agents. Matrix direct, who is the largest direct writer of life insurance only accounts form .005% of all new life insurance contracts. Why? Because Life insurance and financial services are sold, not bought. SF knows this. SF pays the agent 1/2 of the average comission of any financial services company. Why?

Because they subsidized everything with the Largest Insurance company in North American: State Farm Mutual. The life company is the most profitable of all their offerings. They justify paying squat because they feel they are more than generous with their p&c commissions. And guess what, if you don't sell life, they don't pay you your full P&C commissions. Genius!!!!

SF is the General Motors of all insurance companies. Its legacy and retirement costs are massive. When they complain about their expense ratios to you, look them in the face and laugh. The majority of their selling, advertising, and marketing expense is done for less that 10% of revenue through the agent. Yes, they have national advertising, but they shift most of this cost to the agent in the form of Pave leads, internet leads, yellow page, billboard, radio advertising.

90% of the marketing and Advertising cost is done by the agent. Geico, spends nearly 48% of their revenue on marketing and advertising. So do the math here. SF has a great deal and they know it. And if they're not getting the results they need in a market area, guess what? They will have no problem putting another SF agent 1 mile down the road from you. They make sure this next agent has very good credit and access to about 100k. So SF can pass the cost of marketing and sales expense to the new sucker. They have no problem sucking out that $100k in the form of threats to market more, because the make more money without a dime out of pocket.

The fact is the more you generate on the AA05 contract, the less you net and the more the company makes. They don't care that you're spending 80% of you commission for advertising, marketing, and overhead costs. It's still less than 10% for them.

This is not your business and it will never be. The AA05 is more tight than a standard contract employee agreement. So if you're going to do this deal and survive:

Do what they say to do in the first year.


Then, cut cut cut until your expense ration is 60% to you and 40% to the business. You'll psychologically have the nerve to go in knowing you're actually making some money.

Funny this post is right on. It is exactly what I am doing now. My production has gone down but is keeping up with my lapse/can. I am finally making money on this contract and enjoying myself. Of course, I am not doing much by way of increasing market share for the company. Over the last two years I have taken a $54,000 cut in my profits. I am not taking that home to the wife, so I cut marketing, staff, rent, etc. I finally got the $54,000 back from the cuts...but it ain't pretty.

 

[Legnt1]

Super G, I'm currently finishing my 5th year commitment in a top producing agency. The agent is going to help me step through the process and says that CT is a prime state to get an agency because SF has no market share there. What r ur thoughts about that? My agent says that I will go into debt for three or four years, but will pay off big time down the road.

Follow up, In 1995 State Farm started an employee agency force in CT and a call center to support these newly appointed agents from all across the country. The program failed horribly and the company pulled out like a "thief in the night". Told the agents they could become regular agents, knowing it would be too expensive. There IS a reason the market share is wide open. Too expensive to do business there under the tradition agency model. Think 8 times first...

 

[togatown]

I have several close friends that are agents in CT. The AA05's and TICA's abound there (more so than any other state) in the country. They are now starving due to severe rate hikes and underwriting activity. Lapse/Cancel is through the roof and can't be replaced fast enough. They had some good years in the mid-2000's and are now left overstaffed and struggling to hit compensation benchmarks.

Looks like a bright shiny apple on the outside but take a bite and it's rotten inside.

 

[Muscle Hill]

Go Indy! And enjoy the benefits of your hard work

 

[masi25]

I know this is an old thread, but does anyone know of any longer tenured agents going the indy route?

 

[The Colonel]

I've never seen/heard of one...

 

[masi25]

I wonder why? Comfortable/complacency? Not wanting to start over?