Has anyone heard about the secret projects prepare for an end to captive agency
40 replies (most recent on top)
@1ks clueless, there has not been a compliance meeting in 10 years, is all online. Getting turned down for agency still stings don’t it?
@1ks perfect! The leeches must stop the bleeding!
Everything you listed is just a complete waste of money and duplicate expense. For every 1 agent advertising in their community there are 10 that do not put a single dime back into the business or community. Why State Farm took the multi-agent route. Most agents just pass away.....bleeding policies relentlessly until the end. The vast majority of agents haven't been engaged in their business in decades. They come to the compliance meeting once a year and that is about it. There is nothing and I mean nothing an agent does that will not either be automated or can done for 25% of the cost currently. No one and I mean no one wants to deal directly with an agent these days except Boomers and the mindless minions too lazy to spend about 5 minutes on-line to research insurance basics. They are purging agency leadership first to clamp down the resistance and agents are next...Operations has endured it for the last 12-13 years.....with the completion of modernization/billing next year. They finally address the elephant in the room! I got about a year so enjoy it!
@1k0 With that money, agents employ more customer facing employees that State Farm does. They also do 100% of all local advertising and marketing. And they maintain offices where customers actually talk to people.
What’s left is their take home pay. Which, being self employed, has a higher tax burden than yours.
Agents have no “guaranteed take home pay” especially in the early years.
Best money State Farm spends. It’s not even close.
Yes you are correct 8-10% on commissions/renewal....digital/is different. A lot of the compensation on the AA05 and not the old AA97 is on the scorecard bonuses. When you factor that in, you can make almost 15%. A lot of agents do not get a very big bonus if any, and some get huge scorecard bonuses especially the multi-office agents and big producers. Slice it anyway you want to agents are around 32% of the company's overall expense burden......complete and total waste of money.
Not sure where you get a 10-15% commission rate, across the board it more like 7-10 and falling unless you are in you 80s and on a very old contract. The only product short of life insurance that pays 15% is a federal flood policy.
As a policyholder and past employee, great news because agents are just premium boys/leeches who provide no added value.
Agree, but what you are going to find out is State Farm will start selling other companies products directly and just bypass the agent altogether. That's what agent's always forget..... State Farm can sell whatever it wants to and it does not have to be done with an agent. Why skim 8%-15% percent/renewal off every transaction that they can keep for themselves. Pay a one time sells fee and very little on the backend.....if anything. Agents will just wither away on the vine....same approach they have taken with operations, wear you down with attrition.
@1dd I know what it means. They're not going to let agents sell competing products either.
Captive agency isn't going anywhere.
Agreed. However I am unsure people understand what the op is saying. Captive agency doesn't say agents are going away.
Agents. Aren't. Going. Anywhere.
Agents. Aren't. Becoming. Employees.
They gutted operations....Agency on deck!
Only heard something will be mentioned at convention. Rumors are spreading like wildfire. No concrete details
UW here, yes i see this daily. Agency is extremely dishonest, and when caught, zero repercussions. Ive seen staff members forging signed documents, from select/reject forms to exclusions, like glaringly obvious, like i see your crop lines around the signature that fits 100% to the old form...and corporate doesnt care. Were told to trust agency but "oh man i was wrong a second ago before i knew what eligibility is, now my answer changes to meet that guideline" and they laugh about it on phone. Its just, gross interacting with them. Some of the thinnest skinned people ive ever met too, you need to walk on eggshells with them or they are looking your manager up and trying to get you fired, which is also gross.
I think it would actually benefit the customer and company to just cut out the middle man. Once you realize that 75% of the interactions with the customer are done with some staff member who watched 45min of modules while not paying attention and that is it...and im not kidding that is all the training they get, agents will slack on training their employees and just say to call underwriting, and some times, they are just too stupid to understand simple direction and mess everything up.
For an insurance company that was #1, we sure do insurance poorly imo, and it all starts with the agency. All this ignores the MASSIVE cost these sleazy salesmen incur for us.
@18k he/she speaks truth. To speak truth you are labeled as a rebel? I'll take the truth and be a rebel too! These captions show agents do little work, produce little, and are overpaid.
@rd you are a rebel.
The average agent may not have shown significant policy count growth over the last 5 years but they have managed to retain the clients and almost double their average premium volume, you do realize that is the metrics that matters right? If I add 100 renters policies at $100 each or 5 homeowners policies at $2500 each I make the same income with a fraction of the work. Agency may go away someday, but most likely not in my lifetime.
Is this going to be mentioned at the convention? Timeline?
While this seems like the most logical thing to do, I can tell you right now sf has proven they rarely base their decisions off logic. I have been saying this for years and it seems like they are doubling down on their failing model and giving agency more autonomy in the new auto/fire systems. Such a strange way to “evolve” as a company.
Agents have needed to go for years. I don't have one, need one, or want one. I don't even carry SF on anything and never will. When asked, I share i work for them but don't carry them, so what does that tell you.
80% of State Farm's agents haven't had a net policy gain in over a decade! 20% of the Agents produce around 90% of all new business and multi-lining. They make up over 30% of the companies expenses to the tune of $12 billion a year. They have been lying, cheating, and stealing countless additional billions decade after decade. They field discount, manipulate CRIs/discounts, coaching insured's on claims, for years hide youthful drivers, clog up operations with countless meddling, emails and useless questions! Most do not invest a dime back into their businesses and haven't in many years. There are some fantastic agent's but the vast majority are a lead weight sinking us to the bottom of the pool. The sooner SF moves away from agents, the better off it will be. Place is still doomed though, it went woke and that cancer is slowing ki-ling the patient.
Agents need competition and metrics! Especially the older agents who sit on free money. Premium boys!
@js I trained my HCL offshore. IT replacements for two years ( it was supposed to be 1 year but they couldn't figure it out). When they finally got rid of me, I'm proud to say they understood how to do the basics, but they never learned the higher level concepts.
@ft and customers not understanding due to the language barrier, and not getting what they need, will flee the company faster. I had system issues yesterday and had to speak to three different people that State Farm outsourced tech issues to. All they knew how to do was escalate a ticket, not solve a single thing for me. Five hours later I was finally back into my system and working. Shameful.
@g4 yeah right. Everytime I walk into an aagents office there is not a soul in that office and 99% of the time the agent is not in the office. That is true today as well as in the day the adjuster was assigned to the agent. Another blow hard sales job!
Agents actually employ more customer facing employees than State Farm does. It’s far and away the most effective use of money anywhere in the company.
We spend roughly $12 billion dollars a year on 21,000 agents. Of our 28% expense ratio they are over 30% of the companies expenses. We spend nothing on employees and it's getting worse. Biggest lie SF ever told is employee expense and buildings. It's pennies per policy! SF is a scam!
@fp we could save even more by outsourcing overpaid call center workers in the USA to offshore.
Just think of how much money the policyholder would save if we eliminated the agent! Wow! If we could do that; then, we would be a sure bet focusing our services to the customer. Way too much overhead and with AI WOW! Too much wasted money.
Ok, change your smoke detector batteries.
Well our stock of boomers who need in office service is dwindling down. With them goes the old way of having households with tons of insured product, and replaced with millenials with a renters policy and a used altima with cheapest coverage possible and nothing else. There wont be the money to support thousands of agencies making hundreds of thousands of dollars. Agency is going the way of the dodo.
People now want to interact less with other people.
@eg if they give the customer the choice with a discount for not having an agent.....C ya agents!
I wonder if it will be similar to the way southwest airlines allowed products to be sold on orbitz or if we will allow independent sales products. Maybe not everything? Anybody else get a random reflector in the mail?
Doubt it will ever happen just because of the long time agency cabal in power. But in reality agents are worthless and provide no value anymore. They used to and decades ago I argued we still needed them. Not anymore. Massive money drain and impact on premiums. However I would hate to see them remove agents only to take the cost savings and give it back to the execs
Yes agency is next, they are going to drive everything to digital and turn agents into financial services agents, if they want to stay. Basically going down that completely failed ramp again and think we can compete with the Charles Schwabs of the world and Edward Jones. Delusional, just purely delusional! We are the best at doubling down on stupid!
Agency needs to go through the same garbage as operations. Agents are no longer needed. They have financially drained this company making too much money for zero work ethic. Too much overhead and burden to the company.
Agency is a huge money sink with poor results (mostly there are a few good ones still out there)
Most agencies are over run with new staff members that have zero training, and they cause tons of issues and set poor expectations. I see agency as causing more issues than they are worth, we can get salesmen internally and just have a service staff inside company to make sure they are actually trained and know what they are selling.
Ugh and the ego on the agents, they think SF is 100% them, but most are just sleazy salesmen and bullies.
Not happening
Agency has been too fat too long!
Apparently there's some big meeting going on right now, probably hear something soon. Could be anything, typical talk of "Change" coming.