I encourage every single person to ask your leader why are we not slashing agency compensation or agents? They make up almost 35% of our the current 30% expense ratio. It is obvious they are about to start cutting our bonuses, health insurance and time off even more than they already have. What has agency given up? We have raised rates over 30% and they have gotten huge pay raises that reoccur every time the policy renews. Our agents never talk to most of their customers after the policy is written. They mess up claims and policies all the time. That makes no sense to just keep paying and paying them for doing nothing except existing. Insane business model, and only one group.... the employees keeps suffering and suffering. The agent is not necessary, a nice to have, but we know we can write the business on-line or through independents.
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Do you think those 40,000 independent agents work for free scooter? Of course not, they aractually are paid a higher commission rate that State Farm agents, not much savings to the company there.
Sure. Because your TM is included in all corporate meetings and plans.
You complain that they know nothing…..but encourage everyone to ask them questions about top level corporate strategy.
@g6 State Farm has offered direct online auto and renters insurance for quite a while. It’s an utter failure. Low production. Ridiculously high loss ratios…..often because people go online and lie in order to cover pre existing damage. And over 50% require agent follow-up to fix incomplete or incorrect information. When the agent reaches out to do that, it often results in a hangup and a lapse for incomplete handling.
But you wouldn’t know that from your WFH, no contact with customers job.
I don’t think we are having the same conversation here.
@gb Progressive works with over 40,000 independent insurance agents and brokers. These agents can offer policies from various insurance companies, including Progressive. You can’t deny that model works… they been selling more than 600% more auto policies per year the last few years compared to SF and their operating combined ratio is significantly lower than SF. Your math is not mathing
@fg, my wife owns an independent agency🫢, I can tell you that their average commission rates exceed SF. Now just imagine 20000 State Farm agents opening Indy agencies if State Farm did away with agency. The customers loyalty is by and large to the agent not the company. Fact.
Easy fix, let the customer decide. Purchase on-line for 10-15% cheaper or get to have an Agent and pay 10-15% more....easiest solution possible! Again.....Rocket science....let the customer decide what they want! Imagine that.....
Agents would be done in 2-3 years.
@fg Outstanding ..... the premium boys get competition.
Here an idea for the Chairman’s council to consider. While maintaining the current SF agents sales model, also open out auto/fire products to independent agents with a reduced commission %, this would allow the customers to decide what sales model they prefer SF (exclusive agent or independent agent). Many of our competitors use the independent model or another hybrid mix… and as we can see some of those companies are WINNING the game and SF is playing catchup with their >100 yr old Merna sales model
Love all the retirements. Keep em coming. Some employees refuse to retire and will work until they are no longer able.
@ep I was a Claim Rep for 7 years before agency. As an agent, I was in front of customers far more than I ever was as a Claim Rep. And it was at their time, for their reasons. These days, most claims are handled remotely and customers constantly ask their agent to reach out to Claims, because Claims doesn't answer the phone or return their call.
@ep Customer facing? LMAO!
Agent's are not customer facing, you sell them a product which can be done on-line. The only customer facing role that is necessary are claims employees. They are required by law to investigation claims, take recorded statements, have to physically inspect to write an estimate , climb up on the roof, crawl under a house or car. I do not need an agent for anything, I mean absolutely nothing. I purchased my insurance, home, auto, plup, and life on-line strictly for the fact that I do not want to pay an agent a commission check to do absolutely nothing. I know if I need any service I will either have to talk to a claim rep or make the change on-line. I can read and have connection to the internet. That is all anyone needs. I bet you bought the $3000 paint and fabric protection, $500 wheel locks, $400 nitrogen filled tires when you bought your last car. Scooter!
@ec Interesting take. You blast the company for not providing customer facing employees…then blast agents for actually providing customer facing employees. Dum--ss.
@dx I can guarantee there are no agents hanging around with you and your defeatist, everybody else su-ks attitude. You don’t know sh-t about what agents do or what their finances look like.
Unfortunately that is basically what they have already done. In most departments 70% of the employees have been with SF less than two years..... It's why everything has gone to total sh-t. Dum--ss agent's are too stupid to realize that is the only way SF can even come close to offering a competitive rate is to create a puppy mill of employees. Ditch the agent and you could actually staff the actual necessary employees that actually have to keep the promise when they have a claim. Our Execs act like it is an unnecessary burden for them that we actually have to provide the service that the customer pays for when they have a claim. Max compensations for the Agent and Execs that do absolutely nothing once the risk is on the book! Bare minimum compensation for the people actually doing the hard work, climbing the roof, inspecting the car, writing the estimate, making the phone calls and taking recorded statements. State Farm openly stated they staffed to a budget number and not the need of the customer....let that sink in to know what kind of useless pieces of sh-t you are dealing with.
To save money lay off every employee with 20 or more years with the company. Excluding managers and execs.
Hey boss hog agent! You better learn to quit living high on the hog and thinking everyone is beneath you. If they consider the people who keep your freaking promises an expense, what makes you think you are so almighty that you are not considered an expense. Nothing you have said on this site makes me think otherwise. Cut the sh*t out of the high on the hog agents because they consider the minions less than them! It is long long long overdue. I live around them and I know their schedules. Their all collecting a premium and doing zero! Premium boys....Fine examples of social welfare recipients!
You want to know why agents make so much scooter? It’s because they are worth it to the company or we would have been gone long ago. Lavish trips you say? You mean a 12 hour cattle car charter plane ride to London and average accommodation s and food? Scorecard bonus you say? That was a carrot to entice agents on a more lucrative contract to transition to the AA 97 contract, in reality the company did nothing but adjust the metrics to the point it’s not even worth chasing the bonus. But hey, what the heck, there are plenty of openings go apply for one. Oh, that’s right they already turned you down twice. Your ignorance is on broad display.
Yes nature has a way of sorting things out and the same goes in business. They are trying anything and everything to keep the agency model around but at the end of the day it will come down to pure economics.....employees have lost and agency will loose next. I recently talked to a good agent buddy and most of them fully expect it and made plans a long time ago to generate other income streams for when the day comes. He said and I quote... "we will keep stealing it as long as we can" LOL! I can at least respect that because he is not two faced like our useless Execs. Save those pennies!
Agents are as useful as buggy whips these days. All is available online and easier now like banks and investment houses. Usually oldeř people just need to talk to some anyone. AI will fix this, too. Getting better every day and rates go dowŋ!
Retiree here, my daughter graduated college 2 years ago and I reached out to a HR Manager I knew and asked for a referral for my daughter. It was for a Fire Claim Specialist job. When I left, I knew Fire was struggling but it was always the place to be when you worked at SF. My daughter interviewed and got hired. She said out of the 20 people in her class there were only 2 white employees and the rest were black. How is that even possible? She said training was horrible with some virtual SF lab stuff, modules and basically zero hands on before then slammed her to a desk. The things she told me was hard to believe but after checking around on here it appears she was telling the truth. The survey sounds like that are about to hand it to everyone even more. She just quit and went to work at a medical device sales company and couldn't be happier. I'm embarrassed and had to apologize to my daughter but I guess it was a good experience for her to find out what she values. Sad what they have turned that place into. MT must be enjoying those $24 million dollar bonuses in retirement.
I worked on that with SF and tried my best to ditch the agent but they would't go there. Progressive even has worse loss ratios with policies written on-line but that is offset without the extra added agency expense and ultimately more profitable. They write about 65% of their business on-line and about 35% through IA. They pay more upfront to write the new business but no where near 8%+ for servicing/renewals. 95% of policy service with Progressive goes through operations which ultimately helps them able to manage risks and get better data then SF. Most is on-line and automated, unlike SF. They have better control of technology and the process. Agents elect to do some things and most elect to not do most things. Agency adoption of new technology is a complete joke and waste of money. At the end of the day, any business and I mean any business that relies on a person for point of sale and most servicing is doomed for failure. Think Amazon vs all the empty malls! SF is too unless it can make a radical shift in mindset and Executive leadership who is totally incompetent and morally corrupt. They should be working at the local donut shop not running SF. They are just trying to steal as much as they can while they can.
@a7 Very few agents get, or care to get, all these perks you’re so envious of. And it’s funny how you bemoan AI replacing functions like underwriting…which no customer ever interacts with, but you feel customers can make educated decisions alone.
State Farm has tried alternate sales methods. Utter failures along with vastly worse loss ratios.
Yes, agents need to be the first thing to go and it should have been done 20 years ago and SF might have had a chance. I'm afraid that window has passed and since they let 2 agents start running SF, they are going to ride SF into the ground trying to defend a worthless business model stuck in the 70 and 80s. MT...now JF plus KC and CS, what could go wrong, just seeing them inspires greatness! LOL! This place is a sh-t hole!
You just made my whole point....Yes that 8% turns in 12-14%+ when agents sell more policies with a scorecard bonus. No consequences for losses either. Plus all the millions of useless calls to operations, the systems supports, Sales Leaders, VPAs, agency marketing, training, agency conventions, travel/trips, all the scams/field discounting, over-paid ADA. The agent team members are redundant and can easily be replaced with AI or outsourced. What to change coverage, update address, take a payment? He-l most of the team members and agents can't even explain what the policy covers. That's all very easy to replace and the reason why we are now the number #2 auto insurer. Progressive and Geico do it all day long and have been doing it for decades without the redundancy. We have a product people can't afford and the biggest expense of the policy are agents. Nothing you say or any point you make changes that stark reality. We know 7/10 customer will never file a claim and the want to do their business on-line without human contact. Question would you rather go to Walmart or the mall to buy something or have Amazon set it on your front porch and have zero human interaction! It's not 1985 anyone their scooter!
@a5 You are so f’ing clueless. Most agents have ZERO contact with Exec. They want little to no contact with management, and the company pits them against each other. It’s an isolated position, and not nearly as lucrative as you’d like to tell us it is.
Conventions are every 4 or 5 years. While folks here like to claim it’s “ all expenses paid”…..you get a room for yourself and a spouse. You arrange and pay your own travel. IF you meet their criteria, you get reimbursed for mileage and pay taxes on that.
They are in on it, the same scam as the Execs. Hang out at the same country clubs, attend conventions together, cheat on their wives/husbands, and take the lavish President's Club and Ambassador travel trips. You are just useless sc-m that are beneath them. Remember that and you will be able to understand SF that much better and their future plans for you.
@OP You want humans servicing customers? Out of the 8% commission, agents employ more customer facing employees than State Farm does. Most agents take home about 1/3 of their gross commissions.