Insurance Journal Forums

Hey all,

I'm an Ex-Farmers Agent. Not sure if i even have to get into why

I've been working as a producer for the last 6 months with an IA out here where I live. I guess I just wanted a break from being the big guy in charge and also found it a little tough getting appointed. Every company I tired completely ignored me (and that is when they didnt burst into laughter when i informed them I was a Farmers Agent). Plus my bank accounts need quite a bit of recovery from my previous endeavor.

I just wanted to get on here with my first post and say hello to everyone. I read a little bit before signing up and found most of the postings on this board incredibly coherent so I couldnt resist but to subscribe.

Thanks,

Rick

Welcome Rick! You made a wise choice getting off Farmers. Now the next step is getting involved in group therapy. Just take it day to day.

It was a good idea to get in with an IA as a producer. I went through a lot of pain and suffering my first year trying to start an IA. If I would have worked as a producer first and got experience before starting my IA it would have gone a lot smoother.

Good luck to you!

Porter

Hello Rick and welcome! Great resource here and you can always get opinions on all different things.

Hello Rick!

Another ex-FIG agent here. Left Farmers aka started to get paid back in 1998. Hard to believe it's been nearly a decade.

Yes, lots of info in the forums here, most of it fairly accurate.

Go Cubs!

Kevin

Hey Rick,

Welcome to the free world after being with Farmers.You made the right decision and you will see that in the time to come.Get as much experience as you can at the IA.Well I myself wished to have been a producer first before opening my first office,things would of been alot better off.My advice is learn as much and always think about making it on your own.

spool32 wrote:Hey all,

I'm an Ex-Farmers Agent. Not sure if i even have to get into why

Rick

Rick, Your deffinitely not alone!!! I have been an agent for 25 years, the first 7 with FIG. It was in 1989 that we 'agreed to disagree'. It was rough for the first few years.

When I left Farmers we were not as discouraged from having 'outside auto' appointments as their agents are now. My oldest appointment is with an auto carrier "the company that you can't live with and can't live without." ( they also compete directly with you, lost a class action lawsuit regarding their 'tiering' method that compelled them to cut our commissions. I don't want to name names but I think I gave you enough information to identify them.)

The result was that I was able to start with a small book of business and able to spread my contract value out over a year and a half.

In Oregon my guess is that about 20% of the independent agencies started out life as encumbered agents with Farmers. (Farmers agents are not truly captive.) That is if the Oregon PIA members I have met are a good indication because about 20% of us are ex-FIG.

One thing you might consider is persuing the CIC (Certified Insurance Counselors Designation). I did and it was well worth while.

Best of Luck

Hey thanks all for the warm welcome!

I'll have to look into getting the CIC. I might have crippled my brain for 2 years from that Series 6 and 63 that they made me take. Which BTW, has anyone ever found it useful? Really, i can spend all my time on P&C and never worry one bit about Financial products or Variable life. I'm considering just letting it expire but we'll see.

Some things are two steps forward and one back i guess. Course Farmers seemed like 2 back then you leap 4 forward when you quit. I talked to a few people I know that are still agents today and I just wanted to tell them.. to save them all the pain and get the healling process started now! But I guess when I hear someone excited that they have broken 1000 policies I dont want to deflate their enthusiasm. Its funny how its policies and not "written premium" too. I hardly ever refer to policy count anymore.

Another first timer here. What are the pitfalls that some of you guys are talking about when opening an IA when coming from a captive? I have been with a captive for 5 years and I am thinking about making the leap into a start-up IA. I feel like a have a pretty good idea of what to expect from friends and associates on the independent side, but appointments will be the biggest hurdle. Any help is appreciated.

Hi Slim,

Well some of the things that you will notice is some of the larger insurance groups wont even look at doing business with you unless your book is already about 1mil. Then the ones that will,they want atleast 250k a year in written premium.It was hard for me since the other IA didnt let me keep any of my business I wrote for them so I really started from the ground up.Another thing you must think about is it takes about 1-2 years to get fully stablished and see some real income

slim wrote:Another first timer here. What are the pitfalls that some of you guys are talking about when opening an IA when coming from a captive? I have been with a captive for 5 years and I am thinking about making the leap into a start-up IA. I feel like a have a pretty good idea of what to expect from friends and associates on the independent side, but appointments will be the biggest hurdle. Any help is appreciated.

You don't say which Captive Company. I was, like New to IJ Forums, Captive to FIG. With them I was able to have appointments with companies other than Farmers I was able to write business that Farmers didn't want.

The result was that I had two appointments for major medical, three non-standard auto companies. one standard home, two bonding companies, two general commercial companies as well as several General Agencies. When I left Farmers. This plus my contract value from Farmers gave me seed money and income to get started.

I initially got three regional companies because they are more amenable to a scratch agencies than the national companies and one life company.
I now have two of the original regional companies (one withdrew from the state), seven standard national companies. If you do not have any book that you take with you and have strong Non-Compete agreement or a Non-Piracy agreement this could still work for you. It would also help if you had a Professional Designation like CIC or CPCU.

One of the pit falls is that I have also lost several appointments with one of the companies being purchased by a company I did not want to do business with. Another of the companies had me in a loss ratio rehabilitation program and dropped me even though I had improved the L/R to meet their expectations (another indepndent agency im my small communitywas purchased by another agency, from out of the area, that already had a large book of business with them so that was a political termination) Another national company withdrew from the entire west coast.

On the plus side, losing a company appointment will not put you out of business.

Good luck

Gurus,

How much capital is necessary to start an independent? Can someone give me more detail into exactly what they found undesireable about FIG?I have experience working in the IA and captive world and really like the idea of opening an IA office. However, I'm conserned that I won't have the capital necessary to survive for the first couple years.

Rick, what state are you in, I may have some market ideas
best of luck, just take it one day at a time

Badrisk,

The capital you will need will vary. It will depend on what area you are in, what markets you have access to, how much experience you have, your marketing plan etc. Very simply you first need to determine what your expenses will be, what your commission levels will be, and then forecast how many policies you be selling.

My agency cost $20k to get started. I was a captive for about 5 years previously. I started with a small office, my wife as a CSR, and limited markets. After the first year the agency really started to come together. We got every appointment we needed and we were writing more business than we could handle.

What is undesirable about FIG? Well one could go on for days. If you become a FIG agent you will work extremely hard to billed an agency and spend a lot of your own money. After about two years you will realize that having only one company sucks and what really sucks is that one company is FIG. At this point you will have two choices. Cut your losses and move on or stick with it. Cutting your losses means starting over from scratch and losing all the clients that you worked your ass of for and spent lots of your own money. If you stick with FIG means a long miserable career writing and losing customers do to rates and u/w, lower commissions than what is standard in the industry, fear of getting fired for not producing enough life, and running a business that is not really yours. When all is said and done FIG owns your renewals and FIG is the only one you can sell your business to at a fraction of what it would be worth in real world.

Go to http://www.farmers-online.com for more info on becoming a Farmers agent.

Good Luck!

Porter

In the beginning of this thread, someone mentions they may let their Life and Variable annuity licenses expire. While I understand you may not be focused on writing Life right now, you may as well renew the licenses. It's a bigger problem to need them and not have them, don't you think?

Hey, Spool32...

The 6 & 63 are important to you if you intend to own a true multi-line agency that offers variable products. Even if you "farm-out" the variable production to an associate, you could still share in the income if set up properly.

However, if you don't intend to have your agency producing variable business, you will NOT want to keep the licenses. Why? Well, most broker/dealers have a minimum production requirement to keep your appointment with them, and a fairly high level needed (for a P/C guy) to avoid paying a substantial fee for the privledge of keeping the appointment. The reason is solid. If you don't use it, you'll loose it! This is particularly true in the investment arena. You'll know just enough to be dangerous, and a B/D won't keep that type of rep around long. Also, the additional cost for E & O, including a more limited market...

So, team up with a regestered rep that will produce a lot of business and share the production, do it yourself if you're inclined, or toss those licenses in the trash and don't spend the money.

Just my two cents.

Swymmer