Farmers Group is laying off more employees one year after it cut ties with 11% of its workforce or 2,400 people.
This time the insurer said it is not disclosing how many people may lose their jobs. However on August 7, the insurer filed a WARN (Workers Adjustment and Retraining Notification) in California reporting that 84 employees were being permanently laid off as of October 7.
The Los Angeles-based insurer is streamlining its current exclusive agency (EA) system in its East region by transitioning it to a district manager model like it already uses in its West and Central territories. Under the model, district managers have the opportunity to build their own businesses while coaching EAs, according to a video o the company’s website.
While Farmers will maintain its EA distribution channel and West, Central and East structure, support positions for East EAs will be affected by the streamlining. According to Luis Sahagun, corporate communications director, there will be an “internal realignment of some state responsibilities.”
Farmers distributes its products through exclusive agencies, independent agents, direct sales online and company call centers.
Online comments suggest that area sales managers and human resources, recruiting and temporary staffing personnel may be affected by the latest round of cuts.
Sahagun said all affected employees may apply for other positions with the company. Online job site Indeed.com shows Farmers has more than 370 available jobs.
“Our goal is larger, stronger and more diversified agencies and we expect significant growth with this change. Our model is focused on building an environment where entrepreneurs can thrive,” said Sahagun.
Farmers, a unit of Zurich Insurance Group, has been attempting to reduce its exposure to natural catastrophes, most notably in Florida and California. It has faced complaints from some of its in-house adjusters in the Southeast claiming they are understaffed and overworked.
The action by Farmers is in line with moves by other large insurers.
Last month, Nationwide announced it would be reducing its headcount by about 5% over the next year. In February, Liberty Mutual confirmed it is eliminating another 250 positions. USAA announced another round of layoffs in April.
The layoff trend at the carrier level is likely to continue. According to a recent labor market study, 14% of insurance companies plan to reduce employee headcounts in the next year. The study from Aon and The Jacobson Group also found that while 79% of insurance companies expect to grow their revenues, just 52% of companies plan to increase staff, and 34% plan to maintain current staffing levels.
However, 64% percent of small insurance companies plan to add staff during the next year.
The total number of employees working for insurance companies in the U.S. stands at a little more than 1.6 million and is flattening, Jacobson and Aon said. However, the numbers for the overall insurance industry including distribution reveal a different story. In the past year, the industry has added nearly 42,000 jobs to reach a total employment headcount of 3.025 million.
Aon and The Jacobson Group had predicted that carrier job growth would flatten in their early 2024 report.
The study found that automation is the most common reason that companies plan to reduce personnel during the next 12 months, followed by areas being overstaffed. Some companies are rebalancing portfolios, with some multi-line property/casualty companies pulling back on personal lines operations.
Topics Agribusiness
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