State Farm Vs. Farmers... Rehash Again

[zildjiank]

In both cases, the person that is responsible for your training is critical to your success. You want to interview this person to make sure they will support you and help guide/mentor you through your first couple of years.

Dan

Damnit. I wish i would've known that- would've done more research for who was doing my training. My Farmers district sucks for support. SINK OR SWIM baby!!!

 

[popeye35]

Todd02, you are wrong! Any new agent that signs up at Farmers as of 2009 has a new contract that ONLY allows them to sell for Farmers. I agree that one nice advantage of Farmers in the past, was the ability to broker unwanted commercial and health insurance biz. It was the icing on the cake for income. Also the failure rate is >90%, not <90%. I would guess the 5 year success rate for all candidates is around 2%.

nope, Todd is right about the health thing. I am still with State Farm as a team member but i have recently talked with a farmers DM and you can sell health from any company.
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okay, so, i still haven't decide between State Farm and Farmers. BUT, to all those who want to knock the State Farm opportunity, i have found out a bunch more about it and it is a great opportunity. Is there more risk? absolutely, but there is more potential for rewards more quickly!!! The key is (if you are a scratch agent) to hit premium builder every month. This is hard work, but very doable. then just hit good life numbers which is also doable and you will have a good scorecard bonus. I have talked with agents who were frugal and ended up out of debt by the end of year 1.

 

[xrac]

......okay, so, i still haven't decide between State Farm and Farmers. BUT, to all those who want to knock the State Farm opportunity, i have found out a bunch more about it and it is a great opportunity. Is there more risk? absolutely, but there is more potential for rewards more quickly!!! The key is (if you are a scratch agent) to hit premium builder every month. This is hard work, but very doable. then just hit good life numbers which is also doable and you will have a good scorecard bonus. I have talked with agents who were frugal and ended up out of debt by the end of year 1.

Have you visited this the National Association of State Farm Agents site and gotten their take on the current contract. Doesn't sound like a great opportunity to me:

NASFA Membership

Here is one agent's story.

Debt and Disappointment

I’ve been an agent for three and a half years now and like others I have heard and read about, I’m still waiting to make some money. I too, was told that hard work, strategic thinking and a willingness to be flexible and customer-focused would pay big dividends. While I know I’m not perfect, I feel I’ve done a good job in those areas. The frustration and disappointment I feel is based on a couple of things.

First – the illustration I signed prior to opening my doors showed that I’d have a book of business with about 800 autos and about 850 fire policies. When I started, I looked at the numbers and was horrified to realize that I was really only starting with about 660 autos and 685 fire policies. My income was negative for the first 6 months. In other words, I was using my own funds to make rent and payroll. I didn’t break even in terms of meeting the office expenses until the 7th month, and even then it was
only because I had to fire the part time my DAFC recommended and the full time, experienced person that I had.

The second thing that has been disappointing is that I realized that in order to make any money these first few years, you have to max out the scorecard. That takes either a super-human, a robot, a sales genie, or a very skilled and focused team. I soon realized that I’m not super human.

I can only do so much and work so many hours. I also realized that it is incredibly hard to train a team while you’re trying to sell and grow a business and it’s very expensive to hire the seasoned veterans that it would take to help you service and sell the way you need to do.

The third, most disappointing thing is the amount of money I have had to invest in this thing. They told us we would need about $50,000 to invest in our business to get it going. I’m several multiples higher than that. I now have so much debt that I wonder if I’ll ever be able to pay it off.

It’s depressing – literally. I’m so swamped with bills that I feel deflated, demotivated, and somewhat apathetic. It’s a challenge to go in to the office, facing another 12-14 hour day, with enthusiasm when you wonder if it’s going to do any good because your debts are growing faster than you can possibly grow the business. And all the while the only coaching I get is “sell more”. Other than that, when I tell my story to the Field Leadership, I see glazed eyes and a blank stare, followed by, “Well, if you hit your life numbers that will help with the bonus. You gotta be on that trip!”

I hear similar stories from other agents that started around the same time. I don’t know what we can do. State Farm has realized their mistake and fixed the contract for the newer agents, including adding an additional $12k bonus when they sign their permanent contract. I wish they’d do that for me. That would eliminate at least some of my credit card debt! But no, my generation of agents has been left for dead at the side of the State Farm highway.

Road Kill

 

[googleguy23]

I really would like to re open this up as I am a successful Marketing Consultant at Google and I am tired of helping other biz flourish while all I get is a nap pod.(I am young and hungry not old and tired I See the insurance industry stable as it is a commodity and full older professionals who are operating on very old school tactics to generate new biz.I cal it outbound marketing vs inbound marketing. Facebook is opening up it directory for financial service folks so what a better time after researching the benefits.

PLEASE DO NOT TURN THIS INTO CAPTIVE VS INDY. I will go indy in 6-8 years if it made. I am only 24 btw so I have some time and first started selling at age 18 for a crummy life insurance guy who had 0 ambition to grow further ( he made good money however in an illegal way however) lol

I need to learn Insurance however since al I have is biz dev background, coding and sales. Nowadays who is going to be good in CA to start with. I am approved by State Farm, went through some very "interesting" test however after reading the forum I am worried that it may just be a lot of fluff with the fact that 4/5 agents are successful (which I define as 100k after rent, and employee cost within 5 years). Some questions I ask myself:

1.) Is it scalable? - I notice a lot of state farm agents only have roughly one other agent under them in the mean time I am thinking wow? I am trying to build a biz, not a job is this right path for a guy like me?#farmersVSstatefarm

2.) Is leaving and selling a book of business even possible?

3.) Can I start more agencies once I have proof of concept with the first with either?

4.) Who is better for the Customer (The most important for a guy like me)

Thanks in advance guys?

 

[djs]

Since you asked.....

A lot of people come into insurance hoping to go full online sales, trying to bring 'new age' marketing to an old profession. It works, but not very well. For lots of reasons, people tend not to buy insurance online and if they do, they go with the direct writers (Geico, Progressive, etc) who have LOTS and LOTS of money to spend to make it happen.

Many have come and tried to change this, thought they could do a lot of online marketing, especially facebook stuff, thinking its 'new' and hip. They try it for a while, spend a lot of money, and end up getting almost nothing for it.

Internet marketing needs to be one of your 5 marketing approaches, not all 5.

Mind you, I'm only talking about personal lines (home and auto). Others, such as life and health, may have different results.

To answer your questions:

1. Absolutely scalable. Not always profitable to scale though. Most agents who have been around for a while don't want to work hard enough to scale larger then they are.

2. Selling your book will depend on where you go. Leaving is easy. On the independent side, selling is simple. On the captive side, Farmers and Allstate allow you to sell your book, but most sales are to other Farmers / Allstate agents. The home office has to approve the sale and the person buying the book in these cases. State Farm does not allow sales of your book, as far as I know.

3. You can open more offices. It would still be your agency.

4. Who knows? This will vary a lot depending on where you are and what matters to your customer. On top of that, no one company stays on the top very long. If they do, then they end up with to much risk exposure in areas and jump their rates to manage it.

The hardest part about insurance is a lot of agents try to automate the marketing piece where the best marketing is done with smiles and handshakes, belly to belly. Automation helps a lot. The key to success though is having a broad network of people you know.

Dan

 

[AgencyClassifieds]

In regards to your questions a lot of the answer is going to be dependent upon what you do.

1) Either of them are scalable depending on your ability to manage others, support the required overhead and ultimately grow profitably.

2) SF not able to sell from my knowledge. Farmers you can sell on the open market like indy or sell back to Farmers

3) Farmers will allow multiple offices, but requires adequate staffing at both. I don't believe SF will allow multiple offices, but this could have changed.

4) Both are good companies and good to their customers. You don't get to be their size by being terrible for the customer. A lot of your customers experience is going to be based on your actions and those of your staff.

 

[indienoise]

If you plan to eventually go indy, then why invest in a captive agency?

Selling your book, if it is allowed, will be harder than you think, and for less than your sales rep will probably tell you it's worth.

You'll have a whole new learning curve if you go indy. Underwriting a risk is a whole different ball game as an indy agent and you have to re-write that book in your mind.

General sales tactics are kinda similar no matter what you're selling, but marketing as a captive and indy are still different. You're selling a whole different proposition, and may attract somewhat different customers.

My point here is rather than tying up a bunch of your own money into a business that you might not get back out of it, why not explore opportunities at local IA's? You'll learn what you need to, won't be tying up your own money, be more well equipped to own an IA in the future if you have a good mentor, and you may be able to negotiate terms to keep your book or buy it out when you go on your own. You won't be afforded that opportunity going from captive to indy.

 

[ARus]

I really would like to re open this up as I am a successful Marketing Consultant at Google and I am tired of helping other biz flourish while all I get is a nap pod.(I am young and hungry not old and tired I See the insurance industry stable as it is a commodity and full older professionals who are operating on very old school tactics to generate new biz.I cal it outbound marketing vs inbound marketing. Facebook is opening up it directory for financial service folks so what a better time after researching the benefits.

PLEASE DO NOT TURN THIS INTO CAPTIVE VS INDY. I will go indy in 6-8 years if it made. I am only 24 btw so I have some time and first started selling at age 18 for a crummy life insurance guy who had 0 ambition to grow further ( he made good money however in an illegal way however) lol

I need to learn Insurance however since al I have is biz dev background, coding and sales. Nowadays who is going to be good in CA to start with. I am approved by State Farm, went through some very "interesting" test however after reading the forum I am worried that it may just be a lot of fluff with the fact that 4/5 agents are successful (which I define as 100k after rent, and employee cost within 5 years). Some questions I ask myself:

1.) Is it scalable? - I notice a lot of state farm agents only have roughly one other agent under them in the mean time I am thinking wow? I am trying to build a biz, not a job is this right path for a guy like me?#farmersVSstatefarm

2.) Is leaving and selling a book of business even possible?

3.) Can I start more agencies once I have proof of concept with the first with either?

4.) Who is better for the Customer (The most important for a guy like me)

Thanks in advance guys?

1. My point is that insurance still pretty much a relationship: short or long.
   
2. Another point is: you should manage people to make big money, or you are self-employee. Very quick you'll reach the 24 hours limit of time to do yourself.
   
3. This business is too complex to be automated. May be if you do a single product.

I see books from people making millions when building a system. I am more willing to trust this approach, but it is also limited.
Hope I helped a little bit.