Thread regarding State Farm Insurance layoffs

In some ways the intent is to lose policies. No one will say that, as it's not good corporate speak. They will tell you "we are turning on levers to control losses". They understand what they are doing with PIF, but they may not advertise it. Keeping low cost, low claim PH. How they grow beyond what they do today is beyond me. State Farm is inept at creating new businesses. Their response is to make the ship as operationally efficient as possible. Transactional, is how they now treat employees and in turn the employees treat the customer.

A top Fortune 500 company knows what it is doing.

HAHAHAHAHAHAHA...

Good joke.

Numbers are getting even worse than last year's. And we are only 2 months in.

I've never spoken to my agent. Have no idea what he does.

It's a big marketplace. People that want to deal with an 800# have been doing so and those who want a local agent that they know and trust will continue to want one if the price is reasonable...as an agent I make $5 for every $100 (if unprofitable) and $7.50 per $100 (if profitable) in auto and fire premiums...that is way below what a lot of independent agents make and LESS than what the state program (for folks that can't get insurance thru regular channels) pay as well as less that most independent agents make (10% on both the state programs and most independent agents commission scale) We have lost quite a few customers in the last 5 years because the rating model for auto and fire is screwed all to hell and no one want to hear about it from the agents. When a customer who has been with you for 30+ years and has no claims is charged more than a brand new customer with a ticket or accident something is horribly wrong. It wasn't that long ago that we were told at National Convention that we wanted "relationships with our customers"...that's gone out the door. I could write a book and maybe one day if I get to retire I will...

A top Fortune 500 company knows what it is doing. They have been in business for close 100 years. They have grown so large that changing does take time but they are doing it. I’m sorry people are losing their jobs, maybe one day the Agent will gone too. But to sit here and actually blame the Agents is just ridiculous. If you’re going to point the blame at leadership. They make those decisions, not Agents.

SF agents get commissions without even having interactions with their customers.

Get off the high horse about agents. If the model worked other companies would be doing it. Goodbye 1950’s model.

I've talked to a number of folks recently who either just switched to SF or were about to. They all bragged about the savings vs Allstate, Nationwide, even Progressive. On the other hand, I have to deal with an increasingly irate group of insureds/body shops who are having to deal with inept customer service reps. Almost on a daily basis I get to hear people threatening to call their lawyer/the insurance commissioner over stupid stuff-things that could be cleared up in 60 seconds if they could just get somebody on the phone who knew what they were talking about. Often I can calm the situation right then & there, but I'm a Proximity Auto Appraiser who just found out my area is going "rural" in a few months. Who will then diffuse these situations? Sadly, the agents just aren't stepping up & doing it (or they can't).

I really feel sad for you, @RSFAAQ3. In conversation with an executive of one of our major competitors I was told that State Farm is now being studied as a company epitomizing self-destruction and only being kept afloat by its reserves built up by previous iterations of its former self. Once studied universally for its insurance accumen. it is now studied as a failed company limping toward dissolution.

The three legs of the company have been effectively destroyed. The systemic memory of the company accumulated over many decades as to the how and why insurance companies work has been destroyed. Without obfuscating the issues, please tell me examples of how the new managerial directions have improved any aspect of the company. Please be specific.

They have reduced the commissions. Agents are not as rich as you think, they work 7 days a week to grow their little business and employee hard working people to take care of most of the service work. You have no idea how much service work is done in the an Agents office. It’s actually more cost efficient to put that on the Agents than for SF to hire, train, get benefits etc etc to fill that position. If what I’m reading is right and you want SF to be a Gieco, then you can kiss your job goodbye as well. Agents bring in the business and use their money finding it, something SF is putting more advertising expense on the Agents. You’re bitting the hand that feeds you when talking about getting rid of the one thing that brings in business. You want Zander, Geico...go work for them.

@itmq. Where do you think those commission monies come from? Agent commissions are an expense that goes into calculation of premiums. Commissions are considered an expense just like employee wages and marketing. Commissions are considered as an expense in the calculation of the expense ratio...which all employees should be carefully watching....SF's expense ratio s---s. Sure reducing staffing will help that ratio if SF can manage to actually generate premium dollars(and that isn't going so well right now)...but reducing commissions would also help.

@1KYY. Agents don’t get paid anything...they earn commissions. This is the blame game. And people eying Agents as the problem are blaming the wrong people.

1tsi. Really. The model is out dated ever hear of Zander ins. They sell an awful lot of life ins on line. Why they crush the prices. They don't pay agents 500 k a year.

Without Agents...who’s selling this stuff? You do realize that SF makes a lot of money off Life insurance, that is a face to face conversation. Also, it’s Agents taking care of the customers along with corporate employees. Layoffs happen, restructuring will always be ongoing, and in the end State Farm will be right there leading the way.

I've never spoken to my agent, don't know his name off the top of my head, and really have no idea what he does.

All these people who think of themselves as being insured "by the agent" must be like 80 years old.

Sorry, but as a proximity claim rep I can tell you that most insureds talk about being insured with the local agent, not State Farm. If the local agent switched companies, a lot of the insureds would follow. There has been a lot of value created by our agency structure. What is driving customers away is two basic things: 1. We are not price competitive in a lot of areas. 2. Service has taken a huge nose-dive and customers have a lot of options for insurance. Multi-generations of policyholders are leaving us - by this I mean whole families from grandpa on down.

I can tell a lot of the disgruntled, soon to be former employees on here are hoping this company will fail.

Hell yeah, son! I gots me a voodoo doll and everything!

Totally agree with ToFuckingFunny73. SF was slow to move to internet sale of its products and has stuck with the agent model far too long. The most logical place to cut costs is to cease using the archaic agent sales model...continuing to do so SF has effectively priced itself right out of the market. Agents are middlemen..it is claims, underwriting and ET supporting product applications that are really providing customer service, NOT agents. SF is killing what set it apart from the competition..and it is apparent that SF customers have taken note...in droves. While SF struggles to contain costs by reducing its workforce..especially in the areas most directly related to providing customer service..our customers are shopping around because the SF value proposition of world class customer service no longer holds water. With price now being the determining factor when purchasing insurance/finance products SF will never be competitive carrying the dead weight of the sales agents.

I can tell a lot of the disgruntled, soon to be former employees on here are hoping this company will fail. Truth is - it's not going to. Numerous Fortune 500 companies have gone through this and made it out the other end. The problem is - it's very difficult for a company the size of SF to make changes on the fly. What this means is - there is going to be about 2 years of pain. This includes losing policies, customers services issues, and very likely, more layoffs. But, if you can weather the storm and remain flexible, there is very likely a light at the end of the tunnel. The company will lose some market share, but in doing so, it will become more lean and efficient. There's a saying in the business world that 'being the biggest, doesn't mean you're the best.' SF will learn this, hopefully.

Amen to the agents comment!

I respectfully disagree. They will cut employees to get expenses down on the payroll. But it won't stabilize then because so many tenure employees will be cut and the newbies don't know enough to provide customer service. They are now transferring calls to other departments and the call is theirs and their job. But they are too stupid and inexperienced to even know it's "their job" it's quit hilarious. I see SF eventually out if the insurance business. So to get the price down to compete they will cut people but have no one to provide service. Another thing SF doesn't seem to get is that these companies that are beating our a-- don't have agents on their tit. It's not the employees that need to be cut, it's agents. I think SF is the Titanic. We r going down. You can't provide customer sevice with new kids that know nothing. What's funny to me is that none of this was necessary for the farm to servive. To be competitive we just needed to get rid of agents.

i don't think they will recover in time. i think we will continue to see decline until they have trimmed enough employees that they can bring down the price. sad but true.

Hopefully between now and the recovery they will put better leadership in place.

I'm an employee getting ready to leave.

I'm sure as hell taking my business with me.

Does a bear sh-- in the woods?

They are going to lose my business of 35 years. This company used to be a leader in the industry and had a lot of respect, now we play follow the loser and try to make funny commercials like the rest of the junk insurance companies. When someone asked me about an insurance recommendation , I reply find the cheapest because they are all junk now.

I figure they'll continue to leak about 100,000 policies a month until all they have left is their investments and a couple of old dudes who can't figure out how to turn off the auto-pay.

Naw, things will be fine. Even after the axe gets taken to the worker bees they’ll still keep their SF policies because they are such a great value.

And that down home, friendly service! That’s what keeps em.

I think numbers will continue to drop - also, they will trim payroll. At some point savings from less labor cost will be bigger than the losses - we'll stabilize at that point.

In the meantime, the org will become leaner and less expensive to run.

At that point we have a chance to start growing, that will be the inflection point.

All time between today and the inflection point will be characterized by pain and tears, we have a few rough years ahead of us.