Farmers Insurance Group

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A Dodge Magnum in Farmers Insurance livery
A Dodge Magnum in Farmers Insurance livery

Farmers Insurance Group is a provider of insurance management services and a holding company. It was founded in Los Angeles, California in 1928 by Thomas E. Leavey and John C. Tyler. It is now a wholly owned subsidiary of Zurich Financial Services, Zurich, Switzerland.

Farmers Group, acting under the "dba" Farmers Underwriters Association, and its wholly owned subsidiaries, Truck Underwriters Association and Fire Underwriters Association, they act as the attorneys-in-fact for three reciprocals or inter-insurance exchanges - Farmers Insurance Exchange, Truck Insurance Exchange and Fire Insurance Exchange. A reciprocal or inter-insurance exchange consist of policyholders (subscribers) who exchange contracts with one another so that they can provide themselves with insurance against certain losses. In addition, Farmers Group, Inc., is a life insurance holding company of the Farmers New World Life Insurance Company. Farmers Group, Inc. is the country's third-largest writer of both private passenger automobile and homeowners insurance.

Farmers Insurance Group of Companies is based in Los Angeles, California, and operates in 41 states across the country through the efforts of approximately 18,000 employees and services more than 15 million customers. In March 2000, the Farmers Insurance Group of Companies acquired/merged with Foremost Corporation (Foremost Insurance Company) located in Grand Rapids, Michigan. Foremost is the leading writer of manufactured homes and a prominent insurer of recreational vehicles, boats and other specialty lines.

Contents

[edit] History

In 1928, Thomas E. Leavey and John C. Tyler founded the first Farmers Company in California. Today, the Farmers Companies (also known as Farmers Insurance Group®) are the country's third-largest writer of private passenger Auto and Homeowners insurance.

Farmers Group is also referred to as the Farmers Insurance Group of Companies, FIG and Farmers Insurance. It was incorporated in the State of Nevada having filed articles of incorporation with the Nevada Secretary of State on October 17, 1927[1]. The first Board of Governors meeting was held on March 28, 1928. The Home Office, built in 1937, is located at 4680 Wilshire Boulevard, Los Angeles, CA 90010.

The Farmers Companies operate in 41 states across the country, servicing more than 15 million customers through the efforts of approximately 18,000 employees and 17,500 agents who are independent-contractor and independent agents.

Farmers New World Life Insurance Company, Mercer Island, Washington, offers a wide range of products from a fully flexible Universal Life product to traditional Term and Whole Life plans and annuities, all marketed by Farmers agents.

Farmers Financial Solutions, LLC, Simi Valley, California, offers a variety of financial products such as mutual funds, Variable Annuities, and Variable Universal Life products, which help build savings for customers’ future needs, such as retirement and college savings.

Farmers acquired the Foremost Insurance Company, Caledonia Michigan, in March 2000. It leads the industry in insuring specialty products such as mobile homes, motor homes, travel trailers and specialty dwellings.

Farmers Group, was previously a publicly traded company most recently traded on the NASDAQ until 1989. B.A.T. Industries, plc, London, England through its US subsidiary, BATUS, Inc. (a Delaware Corporation), submitted an unsolicited tender offer of $4.2 billion in October 1987 which amounted to an attempt at a hostile takeover of Farmers Group, although BATUS characterized it as “friendly”. Farmers Group rejected the initial tender offer[2] but the Farmers Board and stockholders did finally agree to be acquired by BATUS for $5.2 billion and the acquisition was concluded in 1989. Farmers Group became part of the B.A.T. financial services group.

- In September 1998, the Zurich Financial Services Group was created from the merger with the financial services business of B.A.T. Industries p.l.c. Through a dual holding structure, Zurich Financial Services was owned 57% by Swiss-quoted Zurich Allied AG, representing the former shareholders of Zurich Insurance Company, and 43% by London Stock Exchange Allied Zurich p.l.c., the de-merged financial services interests of B.A.T. Industries p.l.c.

- In October 2000, the Zurich structure was simplified and unified under a single Swiss holding company. Allied Zurich and Zurich Allied shares were replaced by shares of the newly incorporated Zurich Financial Services with a primary listing on SWX Swiss Exchange (ticker symbol: ZURN) and a secondary listing in London (LSE: ZURN.L). Zurich Financial Services American Depositary Receipts (ADRs) are traded on the American Stock Exchange (AMEX: ZFSVY).

[edit] Criticism

Because Farmers Insurance has a major presence on the West Coast, it also receives a large number of complaints to state insurance commissioners in Western states, sometimes being the most-complained-about insurance company during any given year.[1][2][3] Farmers Insurance' ratio of complaints to premiums written is average for major insurance companies.[citation needed]

In 2003, Consumer Reports rated Farmers Insurance Homeowners "Worse" for both "Problems with Claim" and "Delayed Payments". [4] In March 2006, Consumer Reports considered Farmers Insurance one of the “poorest performers” amongst 27 insurance companies in terms of paying off (auto) claims in 30 days or less [5].

However, the 2007 American Customer Satisfaction Index conducted by the University of Michigan, found that customer satisfaction with Farmers was at exactly the same level as the overall Property and Casualty Industry. In addition, Farmers satisfaction level was the most improved from 2005 to 2006 among the companies surveyed [3]

A variety of client, agent and loss adjuster complaints regarding Farmers have been reported in the media. Examples include Bell v. Farmers Insurance Exchange (2004) which was at the time the largest overtime pay class action in the USA for unpaid overtime; Ballard v. Farmers Insurance, one of the most prominent mold claim cases against an insurer in which a house was overrun with a toxic mold due to failure to adequately and swiftly cover repairs for a water leak; the case of Barbara Martin in which compensation was refused for "pain and suffering", including lost career, inability to have another child, and continuing emotional and physical pain (Martin accused Farmers of fraudulently using the Colossus claim evaluation program to rip off customers); Robert Dietz and Christy Klein who as former Farmers claims adjusters, stated "There's so much pressure on you to settle for the least amount possible" using prizes such as $25 gift certificates or a pizza party for adjusters achieving lowest settlements; and Ethel Adams who stated, "This is everybody's worst nightmare. You know you have insurance -- you've paid for it -- and you've got these massive injuries. Then to be told, 'No, you don't have coverage,' it was like someone punched me in the stomach." In the latter case, Washington State Insurance Commissioner Mike Kreidler intervened to tell Farmers Insurance to pay.


[edit] Accolades

Hurricane Rita struck an area of the Texas Gulf coast where Farmers had many policyholders. The mayor of Beaumont, Texas, who had a number of personal connections with Farmers,[6] thanked Farmers in a Leaders Magazine editorial on hurricane recovery, not only for their excellent service to his constituents, but for donating generators needed to get the city government back up and running.[7] A Farmers' client in San Bernardino, California is quoted on a Farmer's and Zurich Financial Services joint web page testimonial as contrasting the service she received following forest fires in California, with the experiences of her neighbors: "Most of our neighbors have had pretty negative experiences with their carriers, and many may not be able to rebuild their homes ... Thank you." [4]

[edit] References

  1. ^ Washington State Auto Insurance Complaints : Farmers Insurance had the most number of complaints in 2005
  2. ^ Texas Department of Insurance Homeowners Complaints : Farmers Insurance had the most number of complaints in 2004 when combining Farmers Insurance Exchange and Fire Insurance Exchange
  3. ^ Oregon State Auto Complaint Report : Farmers Insurance had the most number of auto complaints in 2006
  4. ^ ConsumerReports.org, Ratings Homeowner Insurance, September 2004
  5. ^ Post-Gazette.com: Consumer Reports considered Farmers Insurance one of the “poorest performers”.
  6. ^ Leaders Magazine, vol.29 no.3, article on Social Responsibility (PDF): "As an example, I have been insured by Farmers for a number of years and have a good friend who’s an agent. I also have a good working relationship with the management of both the local and regional offices. In a small to mediumsized community, you can create those relationships with people."
  7. ^ Leaders Magazine, vol.29 no.3, article on Social Responsibility (PDF)

[edit] See also

[edit] External links

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