October 2, 1998
Paul N. Hopkins, Chief Marketing Officer
4680 Wilshire Boulevard
Los Angeles, Calif. 90010
Thank you for your "personal" form letter I got in my mail today..
You gave two reasons why I should be truly EXCITED about auto
insurance. Let me share a little reality so you don't actually get caught up believing
Farmers' "spin" and "double speak."
Yesterday I worked from 7:00 a.m. until about 10:00 p.m. and had lunch in the back of
my office. Today I decided to work a half-day; I'm only working from 8:45 a.m. until 5:00
p.m. I did take the same 30-minute lunch break in the back of my office. I have so far
- One hour this morning trying to solve a FPPS problem on a message that I got when
entering new business.
- One hour on hold and talking to fire PL/PS trying to resolve the same problem. Their
solution was to tell me that the "system" dumped the whole transaction, so I was
to call Home Office to resolve the problem.
- Fifteen minutes waiting on hold for Prematic with no success. I had to get off hold to
talk to a client I have had since 1988. He just wanted to let me know he is changing his
car insurance to Geico. Their six-month premium for his two cars is about $400
semi-annually; ours is about $600. Yes, I do have his house and life insurance . . . for
- I then spent long conversations with two clients about two Easy Pay problems. In this
case I was spared the frustration of waiting on hold as we can not even call Easy Pay. I
called my District Manager instead.
While I was talking to him I got another request from a long-time "good family
account" for an experience letter to be sent to them for their car insurance. For the
benefit of "management" who have never been agents, that generally means the
people are shopping around or have already bought insurance elsewhere.
During the time I was doing this, my office partner was spending about an hour
explaining coverage to a foreign exchange student who was buying insurance from him. I
guess we were competitive! Unfortunately, the person will be going back home in a year. I
checked with my partner; he was definitely "excited," though, that he got double
I'm glad I left early today because I spent the last 15 minutes on hold again for
Prematic. I was lucky this time; I got through. It would have made my day if they had
actually been able to help me.
My day was also higlighted by my "opportunity" to explain the Customer
Loyalty Certificate. I explained that it was Farmers' guarantee that if the client's
circumstances didn't change and his driving record didn't deteriorate, we would not cancel
him. He was "excited," but then asked how that was different from before. I
confirmed it wasn't, but now he had a nice certificate to prove it.
Paul, as you may be able to tell from the tone of this letter, I am currently feeling
frustration and a certain amount of hostility towards the management at Farmers. You amaze
me in your continued absolute lack of respect for the agency force.
Here are my reasons why I'm not excited:
- A management decision was made to shift a large portion of the Regional Office workload
to the agency force by implementing data entry of auto, home and monthly-pay functions
that would be done in the agents' offices.
- Since that implementation my staff cost has gone up by 50%. My "interaction
share" compensation for that shift amounts to about $100 per month. If that's what
it's worth, then you can have it back anytime. In fact, I will not only sacrifice the
$100, I'll pay you $100 to take it back.
- You continue to introduce computer programs, in particular APPS, FPPS and Easy Pay that
- Improperly tested for use
- Complicated to the point of frustration
- Delivered with very inadequate customer service
- Currently incompatible with existing programs within the computer system.
APPS still continues to have significant problems as witnessed by the steady stream of
communication from Home Office detailing problems and the continued inability to get
immediate help from either the Regional Office or Home Office.
FPPS was a step in the right direction and appeared to have been designed with a little
more consideration for the user. However functions that should be a help still don't work
properly (for example, the Evidence of Insurance).
Easy Pay is again an example of Farmers determination to introduce an idea well before
it has been tested properly, hence the recent delay in conversion.
At the risk of writing "a book" about the particular problems, they all fall
into the category of poor planning. Had these programs been released for sale as retail
computer programs, they would have been withdrawn virtually immediately because the
problems associated with them, the lack of technical support and difficulty in using them
would have been totally unacceptable to a public that has "a choice." In fact,
the developer and marketing executive responsible for the failure would, and should,
probably have been fired.
- Our current market position in auto insurance is having a very unsatisfactory impact on
my business. It would appear that I am not alone. The management company's strong focus on
retention and the bonus Auto Production count would not be necessary if we were already in
a strong position and not losing market share. We are losing good insureds, the ones we
have spent years developing--the members of our PTAs, our Rotary Clubs and our churches.
The transient student and single car minimum liability policies seem to be the business we
are attracting. To be "Premier" the management company has to act like it. Your
agents are certainly worth paying extra for . . . but 50%? I doubt it. In order to be
Premier and more expensive, we have to offer more; you've said it many times. Service,
however, must come from both you and us. When Farmers can't get the billing correct or
sends incorrect face sheets and we have to wait on hold for an hour to get an answer,
that's not service -- to anyone.
This is a soft competitive market. Double production count is meaningless. We need
agressive rate changes and, more importantly, "PREMIER SERVICE." If you do your
part and treat us with some respect, we may surprise you.
- Horizontal marketing and financial services are obviously the focus of the future.
Hopefully a lot of thought goes into their introduction; being Premier means "being
the customer's first choice," not coming out with the first thing that you think the
agents can make you a few dollars on. It's interesting to compare the service we get from
the carriers of some of the horizontal products we now use compared, say, to Farmers' New
- Toll-free telephone numbers
- Available, responsive sales support
- Aggressive service on new business, not "look it up on the computer if you have
- Products designed to compete in a very competitive, more sophisticated marketplace. We
can no longer rely on the strength of our relationship insulating our clients from
agressive sales techniques. Our products must be able to stand up to competitive scrutiny.
Paul, as a 20-year Farmers agent with 5-6 Toppers, Life Masters and Commercial Masters
under my belt, I understand change is necessary and I welcome it. I will embrace the new
technology. I will welcome the new products. I know that we will go through good times and
bad. In return, I ask for only three things and I will stand by your side on the road to
- Don't treat me like a third-grader. Tell me the truth. When you screw up, don't call it
"my challenge." Take responsibility for your mistakes.
- Provide me with the same service that you expect me to give my clients. If they call me
they don't expect to be on hold for half an hour and neither do I; that shows a complete
lack of respect for my time.
- Show me some respect. Without me and my fellow agents, Farmers would not have grown to
the position it currently holds in the market and the management company would not be
making large amounts of money. Respect my time. Respect my decision as a field underwriter
and respect my opinions occasionally.
Am I excited right now? NO! Hopefully you'll do the "right
thing" and together we will be Premier and EXCITED
David Groom, LUTCF