Farmers Appointment in SoCal..need Advice

[Insurance951]

Hello all....Newbie here; I've been lurking a bit and have already learned a bunch from you guys...thanks for that. I'm recently licensed and considering an appointment with Farmers. My questions: Why or why not Farmers? And why or why not captive?

Thanks in advance....much appreciated!

 

[SoCalBroker]

Might ask that same question to a State Farm agent in Florida

Where in so cal ... buddy of mine is the manager of the District Managers from Long Beach to Mexico.

Farmers is very uncompetitive and CA right now on Personal Insurance home and Auto, but some of their commercial programs are competitive.

 

[Insurance951]

Might ask that same question to a State Farm agent in Florida

Where in so cal ... buddy of mine is the manager of the District Managers from Long Beach to Mexico.

Farmers is very uncompetitive and CA right now on Personal Insurance home and Auto, but some of their commercial programs are competitive.

Haha
I'm in Corona..about halfway between Palm Springs and L.A.
What's strange, and probably the biggest reason I'm interested in Farmers; I actually just switched my personal HO ins. / autos and RV from Allstate to Farmers. I spent a good amount of time shopping rates and found Farmers to be much cheaper than the others coverage for coverage.

 

[SoCalBroker]

They beat Mercury or Travelers?

Allstate's typically a laydown.

AAA is doing their cash flow underwriting thing again ...

Any kids on the policy?

 

[Insurance951]

They beat Mercury or Travelers?

Allstate's typically a laydown.

AAA is doing their cash flow underwriting thing again ...

Any kids on the policy?

They beat Mercury...didn't price Travelers though.
No kids. I'm in sort of a 'specialty' location; some consider my home to be within a 'fire hazard' zone.

Any thoughts on captive vs. independent?

 

[SoCalBroker]

There's little to no advantage to going captive other than they will provide you a safety net of sorts when your making the initial 5 year uphill climb to sustainability. The point where your skill and book of revenue throws off enough cash to cover costs and your income needs.

 

[Insurance951]

There's little to no advantage to going captive other than they will provide you a safety net of sorts when your making the initial 5 year uphill climb to sustainability. The point where your skill and book of revenue throws off enough cash to cover costs and your income needs.

Okay, thanks for that.
But when it comes to prospecting for clients isn't it beneficial to be able to say; "Hi Bob this is Joe Blow with Farmers Insurance" vs. "Hi Bob this is Joe Blow with XYZ Insurance."? It seems like representing a well known / well branded company could be extremely helpful in that regard. Wouldn't more people / companies 'hear you out' for that reason alone?

 

[djs]

Okay, thanks for that.
But when it comes to prospecting for clients isn't it beneficial to be able to say; "Hi Bob this is Joe Blow with Farmers Insurance" vs. "Hi Bob this is Joe Blow with XYZ Insurance."? It seems like representing a well known / well branded company could be extremely helpful in that regard. Wouldn't more people / companies 'hear you out' for that reason alone?

A lot of independents do similar things, just the names of the companies change. A lot of captives market themselves more as independents, especially if they can write other business (as many Farmers agents can).

I've probably known about as many independent P&C agents to go captive (you rarely hear about this, but it happens more than you realize) as captive agents to go independent. There are benefits both ways.

The advantage independent brokers used to have is gone in California for the most part, the infamous broker fee. Brokers could basically double their commissions, and it was paid up front, even if the policy lapsed. The competitive nature has done away with this.

There is no right and no wrong answer on captive vs independent in the P&C market. It takes a little soul searching. Captive is more like owning a franchise restaurant, with the menu somewhat dictated and business systems provided. Independent is like opening your own restaurant, you have more control on the menu, you have to develop your own systems, but you have the choice of being 'Joes Burger Shop' or 'Le France Nose in the Air' restaurant style.

Almost all independents will say go independent. Many captives will say go independent, but then they don't do it themselves, and there is a reason.

My recommendation? Visit a few successful agents in your area. You'll be surprised, many will talk to you about being an agent, what it takes, why they like what they do. Don't be offended by those who won't. Take a moment and look at their office, this speaks volumes about how they do business.

This really isn't a question any else can answer for you. In the end, you need a broad product lineup, competitive rates in a few areas, though you don't have to be the cheapest. Solid underwriting skills, people skills, and a good business system. You'll make it either way.

Dan

 

[Insurance951]

Hey Dan..
Thanks a bunch for taking the time and posting all the great advice.

Much appreciated!

 

[SoCalBroker]

Well, I personally dont think that helps much - especially if your ONE company gets name for being crappy at paying claims, or non renewing people in a zone, or becoming uncompetitive .... why dont captives switch more often? Lack of will ... or the carrier has an agent retire and guess who gets the book?

Im in CA too and I dont know of 1 independent agent that has gone captive in 20+ years of networking and doing business in southern california. I probably come across a lot more friendly competitors and other agents being in so cal than a guy say in remote Idaho ...

However; I'll add this ... we have over 90 captive agents who REFER us Business from norcal to the mexican border ... month in and month out. I've only needed to refer them back 1 piece of business in like 10 yrs ... a motorcycle.

... Hi, Im Steve Aylor with XYZ Insurance Brokerage in mission viejo .. how are you ...

- their reply " Ohhh insurance ehhh - which company do you work for?"

Me: "My own ... but we represent nearly ALL of them licensed to do business in California ...and Florida Nevada, Texas Colorado and Arizona ... which companies handle your insurance?" or "which carrier do you like?"

Okay, thanks for that.
But when it comes to prospecting for clients isn't it beneficial to be able to say; "Hi Bob this is Joe Blow with Farmers Insurance" vs. "Hi Bob this is Joe Blow with XYZ Insurance."? It seems like representing a well known / well branded company could be extremely helpful in that regard. Wouldn't more people / companies 'hear you out' for that reason alone?