Thread regarding State Farm Insurance layoffs

@upcb.....most agents don’t travel. Most agents don’t worry about the prizes. And they’re slammed for being “disengaged”. Can’t have it both ways.

Gotta compete. Lots of areas to reduce. Especially now when many log in and likely not work fulltime. Too busy washing their cat and organizing the doll collection.

@Uqml You could turn down the prizes and travel......just saying.

And every time you “win an award” it costs you money. SF grosses up your income and you pay tax on it. They don’t seem to use some mass produced wholesale price, either.

I worked in claims and asked an agent about all those awards. He called them "bronzed t–ds". So true.

We are all prepared for whatever comes our way. Probably a better idea for State Farm to make sure there agents aren’t happy. Time to unload low level agency leadership VPA’s and sales leaders looks like they are trying to valididate there positions with doing absolutely doing nothing except a weekly call. Time to trim the fat.

Hope everyone putting cash away, my first two clients switching to Allstate pay per mile this weekend, similar to State Farm’s Hi-Road. I’m glad I don’t have Hi-Road in my State yet. Good luck to everyone.

https://www.allstate.com/auto-insurance/milewise.aspx

Good Ride....exactly what I mean. Congrats to you for getting to 6800. And I really mean that. But as you say, there’s a price. I had one divorce, and came close to another. Then I realized the difference between making a living and reason for living. I hope I realized it in time. I have lived conservatively, and while I’m not ready to retire quite yet, I’ll be OK if somebody else makes that decision for me tomorrow. We all have to decide what our real purpose is, and follow that. For some, it truly is to build the giant agency, and that’s great. But we shouldn’t let the Bloomington bean counters decide that for us.
Live long and prosper, friend.

I’m at 6800 autos and work as hard as anyone in my market. I qualified for most everything, trained team members invested in the community, church
and planning for retirement.
One thing I miss the boat on was I should have taken off more time period, spent more time with my family “big mistake”. Sometimes you get caught up in the ego game and forget what really is the most important thing in your life. When you get to end, Being a top traveler, CC and presidents club means absolutely nothing when you retire.
My recommendation to all you news guys, run the business don’t let it run you, spend as much time as you can with your family and get yourself in the financial position to walk away from SF at anytime. Things are going to change most good deals do.

This is the best explanation of agency I have read..

@Eegg...true, but it's always been that way. Today's tenured agents were yesterday's hungry entrepreneurs. Under the existing model, an agencies grew pretty well until (in almost all markets) they reach a middle size of 3000 autos. At that point lapse/can starts to equal production. A moderate sized office is overwhelmed with service of that many existing accounts. You can't maintain the relationship with customers because it would require 10-15 appointments per day. The spouse who put up with long hours for nearly a decade is not willing to do it anymore. Marriages fall apart. The only way to get out of the rut is to incur more debt to significantly staff up. Customers start to complain that they don't get to talk to the agent anymore. So do ignorant post writers on internet sites. At that point, an agent either has to become a fulltime HR and Training Director, or stay where they are. Continue to do the job you loved and be a midsized agent, or become something you never wanted to be.
That may change if State Farm ever gets the service part right. But it will be a new agent for a new kind of customer. Their new hero, the MOA agent maintaining 3 offices and 15,000 accounts, is obviously not going to be answering the phone in three places, and is not going to to be face to face with each customer every year.
More power to those who want to do it and can do it. But most tenured agents don't have that desire, or that customer base. We all do this to make a living, but the new State Farm thinks it's our reason for living. It's not.

Makes sense. Put some hungry entrepreneurs in the market. They may run circles around tenured agents

We also got notified today from our sales leader we have three new scratch agents postings for next year start. I’m not exactly sure how they are going to make it, we are writing some new business but Gieco, Progressive and USAA still a formidable threat rate wise. It’s going to be a tough run for the new guys and gals.

Heads up!! I think the other post is correct. Big changes coming! We just got word today 6 new TICA market postings went out in our market. Not exactly sure how our market can handle from a huge influx ie market capacity. Something is in the works.

Buyouts would be great this industry is in a major
shift. I knew it was a deal that couldn’t last forever for just showing up and taking orders. Hope it works out for everyone.

Insulating our book of business with bank, mutual funds, long term care coverage, Phoenix life products, pet insurance, Fortis health products, yea, your kidding right. You know how many f—ng times we have had to tell clients sorry we don’t offer that product any more, why the f would we sign up for that again, no thank you , I will just milk the renewals till the tit runs dry then I will go lay on the beach. And ccc service all the accounts.??? You must be kidding. The agents did not let the company Dow. The company let the agents down, this will be a graduate level class taught in b schools on how to go from first to, well not first.

Anybody hearing we are going independent?
I hope they have a buyout this deal crashing

We got word this afternoon our rate filing is negative -2% not sure what they were talking about increase pre-Covid, we were told rates will still be competive and lower than prior to Covid. At least we can write more business. Good luck everyone

This thread can probably end now that upcoming incremental rate increases (post COVID) have been announced.

Sf is one the only captive Agency models left. They should go independent.

“yfnc” you are correct surviving in the next 1-2 years will require agents to offer more than just the minimum. The strategy of working for 20 years and then relaxing isn’t in the cards and the fall off in those agencies is already transparent. Substantiating the value of the agent will be on center stage once service oriented tasks are transfer to CCC. Some agents are going to have difficult time transitioning to the future. They better check out the McKenzie study online Future captive agent to understand the ultimate direction of State Farm going forward.
Hopefully most are ready or capable of retiring. Running a SF agency going forward isn’t like running a 7-11

State Farm itself created the system for seasoned agents to "ride the renewals" as you say. First, State Farm wrote the contracts, not the agents. And for a long time, the sales pitch to agents included the ability to work your tail off for 20 years and then relax a bit. Second, State Farm has now dis-incentivized seasoned agents with the changes they have already implemented. The system is now set up to keep young agents very hungry–by requiring the agent to spend a lot of money to acquire new business. That business has to be retained for 5-7 years before it becomes profitable to the agent. If an experienced agent expects to retire in less than 5-7 years, it makes no sense for them to "engage" by spending money they will never recover, simply to obtain new policies for State Farm.
It's straight forward business economics, and the rules were written by State Farm.

I wonder how many agents aren’t engaged, just riding the renewals. That’s a recipe for disaster for State Farm, if they are planning on just having family run the office like we were doing 20-25 year ago that’s not going to work going in the future. Once State Farm transitions service related tasks over to CCC, what will some do all day long hang out and text. My Sales leader said insulating our book of business with Bank, Financial Mutual Funds products, Life and Mortgage loans is the direction State Farm plan is going forward. Agents that decide to opt out will be the most vulnerable to seeing there business disappear quickly.

I am curious as to how many agents are on each contract. AA3/4, AA97, AA05, etc.
I would think the number of agents under the AA3/4 is pretty low.

I wouldn’t worry about the Farm I would be worried about Amazon or Hi Road going forward

@1xuie...We've been speculating about a new contract for 15 years. Now we're speculating about whether there will be a buyout offer in case the speculative new contract is ever presented. At some point it just gets silly. We'll all hear about it if and when there's an actual announcement.

The AA05 is a worse deal than the AA97, which was a worse deal than the AA03/4. But every agent on every contract voluntarily signed. So our choices are to make do with it, or find other employment. Can't fault our predecessors for working the contract they were on.

Meanwhile aa05 get the shaft. Get screwed because the company screws up causing customers to leave. Or they set growth metrics to earn variable comp when the company plans for a net loss in auto like a few years ago. Or they set high fin service goals when they got rid of a lot of the fin svcs like bank, mf, ltc et al. Then for profitability we have no say in the underwriting of bad business because the all seeing eye in the form of modeling determines who we can or can’t write and at what price.

They gave like 10k for every year of service back with 3/4 AA97 a lot took it, I would imagine there will a lot of takers this round if offered. Especially what everyone is hearing on renewal comp. most agents have shack away the AIPP which basically ran out in 2018. They aren’t sending the AIPP investment email every year to be your buddy, covering there butts.

Anybody hearing if there is going to be a buyout before new contract is introduced like they did in the AA 3/4 to AA97 contract?

AA97’s just got written notice that QRP compensation will be automatically credited for 2021. So it looks like the score is Agents 1, people who “heard something” 0 for another year.

We just got word another rate decrease coming,

Agent compensation changes are in motion as we speak nobody knows the final deal. These large car losses and market condition is going to accelerate the process. I remember when Ed said as long as market conditions

Big changes Coming our VPA just told us hopefully we can still eat with my overhead costs I could be making zero. This deal is filled with holes.

Customer: Send local adjuster out
Agent: I can't because they do not exist anymore.

You are having your own conversation because a good adjuster (if you were in our army) would know that is a directed verdict. Case over...bailiff secure the defendant.

@btld...You’re off having your own conversation, because your comment has nothing to do with what I said. I talk to dozens of customers everyday. They just want a lower price. They say they want amazing service...but don’t realize or care that it takes money and people to do that. And they absolutely are no longer willing to pay for it. I was part of the army of local adjusters for many years. Every day, some customer tells me to send the local adjuster out. I have to tell them I can’t because they don’t exist anymore. That’s not me being at war with them.

@9ppn+16MV5Afs it is about time for rate cuts, we have had a hard time getting business as we have not been competitive in the quotes we have been giving.

Really? Cheerleaders of a group that has no more morale nor do they have faith in mgmt. They have literally taken away their faith in the business. Ever hear their are liars, darn liars and statistics. Your "claim army of adjusters" are overworked, underpaid, disrespected, and referred to as kids and minions. You want to go to war with that army? Geez! Delusional corporate BS mind mess.

@axza.....wrong. Rate cuts are the only thing that will save the business. Been an agent for a long time. Customers just want a lower price. Even when prices are dropping, all they do is complain about the constant rate increases. They literally do not see any correlation between their premium and the level of service they receive. They still expect that we have the army of local claims adjusters that we once had. They still think the agent owes them unlimited amounts of time and service for the $9/yr he or she might make on their minimum limits auto policy. But no matter how good we are, they will and do defect over $10/yr. It’s been that way for quite some time now.

Sorry, but you must not have access to customer insight data or focus group feedback. Price is number one with customer by a very wide margin. This is why all the Jake commercials talk about “great rates”. Discounts are the next highest customer priority (everyone wants a deal.) Next is some portions of service, online access, 24 hr availability, and agent/call center support. Claim service is down the list because most customers don’t have claims and almost a 100% are not planning on having a claim. That said, poor claim service does shape/influence customer shopping behavior. Conversely, excellent claim service can increase retention. But price is the largest influence on retention by a very wide margin.