Agents Commission Cut Petition

Sponsored by: The United Farmers Agents Association                                            For: Farmers Group Inc.

As Thomas Leavey, Co-Founder of Farmers said “Every business venture is begun with the intention of making a profit, and in a free society he profits most who serves best. But no commercial enterprise survives for long and continues to grow if profit is its only purpose. A company must have fundamental principles to live by.

The men and women who are the company must believe in, and adhere to, these principles to earn and hold public respect and acceptance of the company and the products it sells. People are the most important asset of any business – men and women living and working in a modified free enterprise system of their own, where individual effort is rewarded and the highest posts can be achieved.

It is only when such people work together toward a common clearly defined goal that a company moves ahead of competition, prospers and grows strong.”

In the 70 Years of Farmers History it states, “The men and women that make up Farmers’ agency force have always been the lifeblood of Farmers Insurance.”

It is with these statements in mind that we, the undersigned Farmers Agents, voice our concerns regarding the proposed 2018 commission cut;

  • Why has FGI continuously stated over the years, that the Agency Force is the single largest and most important revenue generating stream in the Farmers Family, but then they are cutting the agents new business and renewal commissions?
  • FGI’s has admitted that basing the bonus structure on the AGM score, Smart Office Compliance and UQI score, less than 9% of the entire Agency Force will qualify for a bonus (in some states it will be less than 1%). Wouldn’t anyone reasonably conclude after seeing this admission, made at the October DM conference, that the commission cut across the entire Agency Force is essentially paying for Bonuses to a small fraction of the Agency Force? And even if an Agent does qualify for a Bonus that does not guarantee that they will make up the entire 10% of commissions being cut.  So, FGI, where is the excess commission money going?
  • How will a commission cut help Farmers Agents and Farmers achieve growth without FGI trimming excessive management fees or realigning rates to increase PIF growth?
  • How is the commission cut going to reward all agents for better performance when less than 9% of the Agency Force will qualify for a bonus? And who’s to say that those requirements won’t change each year, making it harder and harder to obtain the desired results?
  • A New Business/Renewal commission of 9%/9% (translates to a 10% reduction) is inadequate to fund the operation of a profitable Farmers Agency. How can an agency even begin to meet the expenses of rent, staff, marketing, technology, etc. when the agent’s commissions are being reduced?
  • Has FGI made it clear to the agency force that lowering the commission rate to 9%/9% (translates to a 10% reduction)not only affects the commission received by an agent, but it reduces the current Contract Value and Underwriting Contract Value Bonus immediately? Moreover, don’t they see that this reduction means that anyone buying an agency is buying a “book of business” that has an automatic built-in negative decline in value?
  • Would it be more beneficial for The Companies, FGI, Zurich and the Agency Force to leave the existing base commissions at 10%/10% and create a competitive bonus structure for achieving a certain level of policies, writing X # of policies, retention, true profitability, cross-selling, etc?
  • FGI knows that when an agent leaves 50% or more of their book leaves within 2 years. Wouldn’t a 10% cut in commissions across all Auto create a large agent runoff directly affecting PIF and profitability?
  • Why do the executives accept salary increases and/or increases in compensation annually, but repeatedly cite “the need to remain profitable” by taking rate increases and imposing commission cuts? Why is FGI (Management Company) and Zurich continuing to make billions of dollars in annual profit via management fees, but claiming the Exchanges are constantly unprofitable or trending to be unprofitable? A reasonable person might ask why are the Board of Governors of the Exchanges isn’t insisting that FGI/Zurich take an immediate significantly lower management fee?

When voices are joined together they are harder to ignore.  If we, as an Agency Force, come together and stand as one against the proposed 2018 Auto Commission Cut our Voice can be heard.   The Agency Force has banded together in the past to let our concerns be known and FGI listened.  In the early 2000s, FGI was planning a Fire commission cut and the Agents spoke up and there was no commission cut. Once again, we ask for your voice!

To sign the petition online please click here or you may click here, print out the page and send to the UFAA National Office (fax) 314-631-7963 or Email: