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Agent/Company Issues

AmFam Underwriting Loss Worsens to $1.7B in 2023:  Although losses continue to climb, AmFam officials try to assure us that things are OK with the company. Based on what other insurance companies are reporting, escalating losses seem to be the trend. Are we to worry? You decide.  3/19/24

State Farm Underwriting Loss Climbs to $14B :  Well, they've done it again…. a $14 billion underwriting loss for 2023. They actually bested their 2022 numbers when they only had a $13 billion underwriting loss. Of course, this is just one side of the story, so please read the article to get a better look at how the huge insurance company is doing.   3/4/24

10 Largest Auto Insurers Each Raised Rates by Double Digits in 2023  Just take a look at this. The article even notes that American Family raised their rates 17.5% in 2023, more than most of the other 9 companies. The only one that beat the increase was Farmers with a 17.6% increase. Don't miss studying this chart. One has to ask how in the world can agents sell with rates like this, and how in the world can consumers afford it?  1/21/24

THE RISE OF SELF-IINSURANCE: Navigating Risk in a Changing Insurance Landscape  It seems possible that AmFam agents might be facing clients who are seriously thinking of self-insuring, mostly because insurance rates have skyrocketed nearly out of sight. This article does a good job of pointing out the pros (there are few!) and cons of self-insuring. Better read it and be ready, in case you're asked about it.  12/27/23

American Family Shuts Down Some Systems to Investigate 'Unusual Activity'  What an unusual situation! Agents and customers are baffled at American Family's lack of skill in getting their computers back online. Rumors are flying, of course. Agents are asking how they can continue to do business without a company, so to speak. Many are saying they have lost thousands of dollars during this 2+week black out period. For those who have been around a while, we all know AmFam has had a reputation for years of having, shall we say, a less than adequate computer system. Well, let's hope it is resolved soon and that our policies, commissions, and lost income are restored.  10/30/23

How does AmFam's 2022 combined ratio compare with other insurance company combined ratios?  Not too many years ago agents would lose their binding authority if their agency loss ratio was considered 'too high'. This usually happened when AmFam's combined ratio got over 100. Now take a look at AmFam's combined ratio and compare to other insurance companies. Should we all be alarmed??   6/14/23

J.D. Power: Rising Premiums Tighten Auto Insurance Market as Customers Shop Deals:  Consumers are shopping for auto insurance, this article states. And rates, according to this article rose 14.5% just in February of 2023! But look at the 'Overall Customer Satisfaction Index Ranking' put out by JD Power---State Farm, Liberty Mutual, Nationwide, Geico, Allstate, Progressive Travelers, Farmers (all in descending order of rank)…..where's American Family? One has to ask, "As rates go up, does my PIF (Policies in Force) go up?"  4/28/23

Florida Regulators Now Reviewing Rate Hikes of 14%, 62% and 103%:   It is no secret that rate/renewal hikes are happening all over the country and this news is really making it difficult for most facing such hikes. Of course, this Florida announcement refers to what most of us call the "state pool" but even non-pool insurance rates are going up horribly. Is it time to get quotes??   4/10/23

AM Best Revises AmFam Credit Rating Outlook to Negative:   First it was S&P and now AM Best. Should we be worried? Many agents are asking, especially since the success and sustainability of this company determines the stability of many agents' Termination Benefits.   11/1/22

AMFAM'S FIVE-YEAR HISTORICAL DATA:   Many of our members have expressed concern about the safety of their Termination Benefit monies being held by American Family. It might be a good idea to look at this 5-year history of the enterprises' s data as it pertains to premium income, investment income, balance sheet figures, cash flow, losses, etc. This document takes you through 2021. We have already heard that 2022 is looking grim for the company.   10/9/22

Auto-Owners, Erie, Cincinnati, Hartford, Hanover Tops in Agents' Satisfaction: J.D. Power (insurancejournal.com)  According to J.D.Power, independent agents are very satisfied with their relationships with carriers. One has to wonder how a survey of captive agents' satisfaction with carriers would turn out.  10/5/22

As Hurricane Ian creates havoc, what does home insurance cover after a disaster?  After reading this, can you decide how much the AmFam homeowners' policies cover? Insurance is a bet between the insurance company and the insured, one betting disaster won't happen and one betting it will. Our opinion: the agent must see that the insured is properly covered, first and foremost. Do you??  10/2/22

Homeowners Insurance Overcharge Class Action Lawsuit Investigation:  American Family is just one of several insurance companies being investigated for allegedly overcharging policyholders. And it's not just homeowner's insurance. It's evidently auto and life insurance. Read about it …. You need to know!   8/10/22

Robert Park v American Family Life and American Family Mutual Insurance:  When checking out the Plaintiff in this case, it looks like perhaps AmFam has met their match! Check out the law firm in Minneapolis of Lockridge Grindal Nauen. Lockridge Grindal Nauen P.L.L.P. (locklaw.com). The case cites instances of driving license info stolen from AmFam and then being used to open unauthorized bank accounts and to apply for unauthorized credit cards. The lawsuit claims that AmFam was aware of the weakness in their data system. It will be interesting to see where this case goes. For more information, NAAFA members should check out Directly to Members…Directly from NAAFA at www.NAAFA.com. Password required.   6/25/22

"Creepy Neighbor Campaign is Successful:"  After State Farm provided support to GenderCool Project, a conservative research group quickly made it to Fox News and other news outlets causing State Farm to 'no longer support the program of distributing gender identity books in schools. The research group hired a billboard truck which circled the Florida Capitol city of Tallahassee warning that "Like a Creepy Neighbor, State Farm is There."   6/2/22

Insureds May be Cooling to Digital Claims Experience  This article claims that insureds wants face-to-face relationships. They're tired of doing things digitally as they've had to do during the past two years. Could this be the turn around we need to show the importance of agents in the field?   11/23/21

Large Insurers Embrace Digital Exchanges, Selling Their Own and Other Policies. Quote from the article:  "The industry has been moving away from "captive" agents who sell only one firm's policies, but digital exchanges are accelerating the trend, said Matt Leonard, an Oliver Wyman partner who works on insurance." NAAFA members have seen this writing on the wall for several years. Now it's all out in the open. Captive companies will keep a few "chosen" agencies in each state, and somehow, terminate the rest. Get ready because another wave of 6-month letters has gone out!".   9/7/21

CEOs May Be Personally Liable for Independent Contractor Misclassification  This is a recent article in Lock Lord's Independent Contractor Misclassification & Compliance Blog. In it, the writer notes that recently "a court denied a motion to dismiss claims against the CEO of a company alleged to have misclassified workers as independent contractors, thereby exposing him to the potential for individual liability." Quite an interesting topic you might want to read about.  8/16/21

Insurer Begins Accepting Cryptocurrency For Premium Payments:  It appears many financial firms still see cryptocurrency as risky.  6/29/21

Allstate Facing Lawsuit from Agents' Group Allstate's agent association, NAPAA, has apparently "had it" with their company's denigrating of their Exclusive Agent members. The charges in this case seem totally familiar to NAAFA members, for the most part. To us it seems redundant to 'hit the hand that feeds you.' Look no further than at the percentage of revenue brought into a captive company by its captive or exclusive agency force. What has happened to loyalty?  5/20/21

2020 AMFAM CORPORATE SALARIES Here they are! And Jack has done it again….taken a salary increase of $1,107,984. In fact, the top 10 corporate officers have all seen generous increases in their annual incomes. It's been a great year for the insurance company, evidently. Has it been a great year for all who work for this company? It appears the agents wouldn't agree. See more in the next issue of The NAAFA Report.  5/5/21

President Biden's Insurance Comments: In a recent CNN Town Hall, President Biden linked insurance pricing to racial inequities. Does that sound familiar what happened several years ago in the Milwaukee area? Sounds like 'red-lining' is alive and well. Click on the link to see the article as published in the National Underwriter.  4/29/21

Insurance Agency Staffs Remain Positive Even Though Pay is Down: One thing we learned in basic insurance training is that people will always need insurance. Now we know that's true as we have seen it through out he COVID pandemic. Lucky to be working in the insurance field, aren't we? 4/22/2021

Auto Ins Shopping Surged during 2020 Pandemic but Little Brand Differentiation Apparent J.D.Power posted their rankings, showing Liberty Mutual and State Farm as ranking highest in a tie among large insurers. American Family ranked highest among midsize insurers. In judging, J.D.Power found these companies provided the most satisfying purchase experience. It's good to know that agents are still very valuable to an insurance company's success although sometimes we wonder whether they realize it or not. 4/29/2021

Insurance Agency Staffs Remain Positive Even Though Pay is Down: One thing we learned in basic insurance training is that people will always need insurance. Now we know that's true as we have seen it through out he COVID pandemic. Lucky to be working in the insurance field, aren't we? 4/22/2021

Allstate Announces $2.8B Sale of Life Insurance Company CEOs can make almost any move seem justified! CEO Tom Wilson referred to a "strategy to grow market share in personal lines property/casualty and the need to unlock deployable capital to support P/C business." Think that one over!!  1/27/2021

Auto Insurers Accused of Failing to Respond Adequately & Profiting during Pandemic Greed sure seems to be the #1 illness of most large corporations, and evidently very true of some insurance companies. NAAFA has received many calls from agents who are complaining about the 10% premium discounts American Family is giving. Why are the agents complaining? Because the premium discount is coming right out of their pockets in the form of less commission, and this ultimately affects their Termination Benefits. So the company shows huge profits because people aren't driving as much during the pandemic, but they turn around and steal from the agents to fund their so-called "generous" premium discount.  12/22/2020

Top 10 US Auto Insurance Companies Based on Customer Experience  Where's American Family? One would wonder whether customers' opinions are important to the company or not. Agents will tell you customers' opinions are vital to the success of both their agencies and the company! 11/3/2020

State Farm Acquires Texas Nonstandard Auto Insurer GAINSCO: Does this sound familiar? State Farm has bought an insurance company that has independent agents who will most likely have rates that undersell State Farm's faithful captive agents' rates. AmFam's Connect, (formerly Ameriprise sold at Costco) we're told, undersells AmFam's captive agents' rates by several hundred a year. It does appear the captives realize independent is the way to go. 9/19/2020

ForeverCar—Agents are hopping mad!  The latest cruel thing AmFam is doing to agents now is asking them to support a product that is being marketed by the company directly to the agents' customers, a product the agents themselves cannot sell. It's like asking agents to pay for the noose that is going to be used to hang them! 7/24/2020

Nationwide Transition to Indep Agency Ins Complete When you read that Nationwide's new written premium (driven by independent agents) has increased 35% since their announcement in 2018 that it would make this transition, one has to wonder whether or not AmFam might be planning a similar strategy. The article states that more than 99% of their former captive agents decided to join Nationwide's independent agency channel and continue their relationship with the company. 6/30/2020

CONCLUSION OF JAMMAL vs. AMERICAN FAMILY 
As most of you know, the US Supreme Court decided not to hear the Jammal v American Family case. And as you also must know, thousands of agents are very disappointed, especially knowing that the misclassification (yes, we still believe we are) will continue and there appears there is nothing we can do about it. We all gave it our best shot. The evidence was there, but the appellate court decided to ignore the evidence. We wish to thank the plaintiff attorneys for their long, hard work on this case. We also wish to thank all the hundreds of agents and others who contributed time, information and documents proving the misclassification. Please remember that these agents are strong, ethical people. They will not give up in their pursuit of fairness and uprightness. NAAFA supports our members. We stand bold! 12/26/2019

Allstate Plans to Retire Struggling Esurance They say it will "free up substantial money for marketing and compensation for agents." Let's see if they really will give the agents more compensation. Does it ever happen in the captive world?? 12/20/2019

Keith Ellison asks FTC to ban employers' noncompete clauses Take a look at the states that have signed on to this, including Wisconsin. Is Keith going to get some static from AmFam on this one?? 11/19/2019

How Small Businesses Are Training for Active Shooters It's sad that we have to even think this way, but do you and your staff know what to do if an irate customer or former employee turns 'assailant' and decides to "get even" by entering your office workplace and begin shooting? Several companies are mentioned in this article that provide staff training in emergency situations. Please Read Carefully! 8/27/2019

State Legalizes Assisted Suicide - but Questions Over Whether Insurance Will "Do the Right Thing":  Maine became the 8th state to legalize medically assisted suicide (following CA, CO, HI, OR, VT, WA, NJ) Many feel assisted suicide is a dangerous public policy that puts vulnerable people at risk for abuse, coercion and mistakes. It also, some say, provides profit-driven insurance companies perverse incentives to offer a quick death, rather than costly continuing quality care. Wow! Something to think about, right? 6/13/2019

ALERT: Three Captive Insurance Companies Are Being Sued For Misclassifying Agents As Independent Contractors: Don't miss this article. We think it's time everyone hears about what is going on. Read about the three class actions, all for the same cause, filed against American Family, Farmers, and State Farm. Does this send a message? 4/23/2019

American Family Insurance to Acquire Ameriprise Auto & Home for $1 Billion: The changing face of AmFam continues to undermine the independent contractor status of the agents. One wonders what they have in mind for their captive agents' futures. 4/2/2019

What's the Future of Agent Distribution? By Andrea Wells It might surprise you to find that some experts are predicting a very bright future for insurance agents. Yes, captive companies are reducing their captive agent pool, but they may be forgetting the importance in the consumer's eyes of a local brand. Agents can and do adapt to the needs of their customers, including those who want to interact via mobile devices and online. Beware, insurance companies, because agents still control the market and you may find your future is still in their hands! 2/4/2019

The Wealth Gap and Miller Park's Deal: Well, they've done it again. Of course there's no limit to how deep AmFam's pockets are because they're robbing their agents to get it. Believe us when we say that daily we hear from agents who are screwed out of not only thousands of dollars, but are having their whole agencies taken away from them. It's absolutely outrageous, and Bruce Murphy points it out very well in this article. It is simply hypocritical that the company can brag about it's agents and yet treat them so horribly. As we have said many times ... the dream they say they are protecting is the agents' nightmare! 1/25/2019

Insurance Agents Assured of Trump Pass-Through Tax Break under Final Treasury Rule: Wow, at last a break for insurance agents! A 20% deduction, referred to as the Section 199A deduction, is available for the first time on 2018 federal income tax returns. This 20% deduction was designed to target small businesses that don't benefit from the Trump tax law's reduction in the top corporate rate from 35 percent to 21 percent. GOOD NEWS. 1/25/2019

Wisconsin's Next Governor Picks Insurance Commissioner: And guess who it is?? American Family's own Mark Afable. We'll let you imagine the implications of this one. 12/29/2018

Will State Farm's "no Al" words come back to haunt the company? Of course, we agents here are AmFam would have to agree with State Farm, but one must ask whether or not we are really seeing the writing on the wall. How important is a compassionate, human agent whose rates are so high the customer won't buy anyway? Could the captive agent be backed into the corner when he only has one company to sell for? 10/31/2018

Prudential Joins Direct-To-Consumer Movement: Attention "captive agents:" If you think this isn't a trend, you're sadly mistaken. Does the wise agent make the shift to independent now, or wait till his captive company shuts him down? 9/4/2018

State Farm Agrees to Pay $250 Million, Avoids Racketeering Trial: Moral of the story is "don't ever assume the judge hasn't been bought off." This whole saga seems once again to show how often insurance companies get by with just a slap to the hand. Meanwhile, policyholders continue to be hurt. 9/4/2018

Class Action Settlement Insurance: Hmmm! Don't you wonder if American Family has this? Here's hoping they have a need for it soon!! 8/31/2018

U.S. Appeals Court Takes Up American Family Agent/Employee Clasification Case: No answers just yet on this decision that will certainly impact many agents and their families. Employee-type control at AmFam has been extremely evident for years and years, according to the complaints the NAAFA office receives. Recently, we learned that agents were mistreated as far back as the late 1970s, information that is new even to us. We pray that the appellate judges will open their eyes to this abuse. NAAFA members can read more in our members-only column, Directly to Members, Directly from NAAFA. 8/3/2018

Nationwide Hit With Agent Lawsuit Over Business Model: It appears captive agents at Nationwide aren't at all happy about their choices for getting their book of business back after being shoved out.  7/18/2018

ALERT! Do Advance Commissions apply to your Termination Benefit Package? NAAFA has suspected for quite some time that the Advance Commissions/renewals are not being applied to the formula for determining your Termination Package amount. ALERT! Click on the link to see the announcement about this important issue.  6/21/2018

American Family, Main Street America Reveal Plans to Merge: The combining of captive and independent agents ... what a concept, but is it going out of style? Think "Nationwide!!"  5/4/2018

Why Independent Agents Remain Alive and Well: NAAFA certainly agrees with the author here who says insurance agents are NOT going away. Gotta love it!!  4/30/2018

Independent Contractor Bombshell for CA Businesses: CA Supreme Court Curtails the Lawful Use of ICs It seems the environment is still ripe for ruling against the misclassification of independent contractors. CA now joins MA by adopting a 3-point factor test to determine how workers are to be classified. This new ABC test presumes all workers to be employees unless they perfectly fit this 3-point factor test. A fascinating read!!   4/30/2018

Insurance Industry Jobs Among the Most Stressful: Study  Interesting article, but it's not telling us anything we don't already know. You may want to go to the link in the article "ranking No. 2 in a recent study" where it says stress "all depends on the prevailing workplace culture, leadership, workload demands and a host of other factors." Some report to us that we have them all!!  4/17/2017

How Layoffs Hurt Companies  We have seen hundreds of "layoffs" (well, terminations and forced retirements, if you want to get technical!!) at AmFam. This article points out some of the harmful effects of laying off people. One of the quotes the article uses is "Firms that are laying off are almost by definition in trouble." By Peter Cappelli. Interesting observation? You decide!!   12/12/2016

State Farm accused of bankrolling judge to throw out $1B case against company.  Some State Farm customers claim the company conspired to help elect an Illinois Supreme Court candidate so he could vote to throw out a $1B award against the company. [Read more on this on the MEMBER-SIDE under Directly to Members ll Directly from NAAFA]  10/3/2016

Companies must Report CEO-to-Worker Pay Ratio under new SEC Rule: Oh, oh!! This should prove interesting since one of the hottest topics of discussion lately has been CEO compensation. One would disparage 'cooking-the-books' to justify one's salary, wouldn't one?  8/6/2015

Labor Dept's 6-Part Test for Classifying Employees, Indep. Contractors: New guidelines for classifying workers under the Fair Labor Standards Act (FSLA) has been issued by the US Dept of Labor. As our readers know, the question of whether AmFam agents are independent contractors or employees is a hot issue right now. The Insurance Journal has summarized this for you, but the original memo can be found at http://www.scribd.com/doc/271748996/Labor-Department-Memo-on-Classification-of-Employees-v-Independent-Contractors.   7/20/2015

Why McKinsey's Prediction of Demise of Independent Agents is 'Dead Wrong'!  If you haven't been watching these comments by the independents regarding the controversial McKinsey Report, McKinsey Report you are not keeping up with what's going on in the insurance world. (AmFam uses McKinsey as a consultant.) Here is quite an interesting response to the McKinsey Report just hot off the press. You need to read it carefully. It may open your eyes to the security of your own future. 10/29/2013

Top-Ranked Carriers Build Agent Satisfaction into Culture!  Which consultant should AmFam have hired? Mckinsey or Deep Customer Connections? (Remember, they hired McKinsey!!) Deep Customer Connections, we're told in this article, has a niche focus on building a better relationship between carriers and independent agents. This idea seems to be in direct contrast to the philosophy of the McKinsey group. Read it for yourselves….you decide. 10/17/2013

McKinsey to Agents: Adapt or Find Another Line of Work!  Well, this article has caused a lot of uproar with insurance agents across America, and it's not hard to see why. McKinsey compares today's insurance agents' futures to those of yesterday's travel agents…..almost gone! What's your opinion? Is AmFam drinking McKinsey's Kool-Aid? 10/16/2013

FreeAdvice.com is a site where customers can post their thoughts regarding their insurance companies. See what customers are saying about American Family. Scroll down to get the most recent comments.  11/15/2010

Want to “vent” about your job or company? www.jobvent.com is the place to do it. Read what others are saying, also.  7/23/2010

Did you know copiers have hard drives?  
Information that you copy could fall into the hands of the wrong people, particularly the company you lease your copier from. Agents BEWARE!  5/16/2010


What Every Agent and Customer Should Know About Clue Reports!  1/23/2010

IRS Private Letter Rulings!
        American Family agents, and other captive agents, are considered independent contractors by the IRS. Since the IRS issued Private Letter Rulings for most of the captive companies, captive agents who filed SS-8’s found their appeal rejected immediately because of these Private Letter Rulings. Very few agents have actually read the 111-page Correspondence between AmFam and the IRS, nor have they read the summary American Family Private Letter Ruling so we are posting both of them for you. You will be interested to read about how little ‘control’ the company is supposed to have over the operation of your agency.
        Information in an Allstate Private Letter Ruling states that an independent contractor agent has an “economic interest” in the customer list, and agents will realize this ‘interest’ when they are either paid by a 3rd party for their business OR the agent receives termination benefits based on a formula designed to equal a fair market value of their accounts. [Paragraph 6 under Independent Contractor Phase, (Allstate Ruling)]
        This presumes a fiscal value which should allow an agent to claim capital gain when paid termination benefits. Even more interesting is the fact that AmFam issued a document that says “Formerly called Extended Earnings, the name was changed to “Termination Benefits.” These are payments made to the former agents not to compete.” (See SECA Kit)
        The non-compete clause applies for one year.The AmFam contract does not state that a customer list cannot be used after the one year because logic would dictate that you’d have to have in your possession a customer list in order to begin competing after the one year.



The 20 Common Law Factors of a Perfect Independent Contractor Relationship


Captive Agents, the Forgotten People!"
NAAFA is again honoring agents’ requests to remain anonymous out of fear of retribution regarding this article, but we think this is perhaps one of the best letters we have received which summarizes the position and fate of all captive agents in America. You won’t want to miss this!  2/28/2008


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Articles, opinions, and viewpoints found on www.NAAFA.com are not necessarily the opinions and viewpoints of NAAFA. The opinions expressed are not those of American Family Insurance Company or any of its subsidiaries. The NAAFA.com website’s express purpose is to provide a medium whereby articles pertinent to the industry may be posted and reviewed and also to provide a medium whereby people can express their opinions in written form for any interested parties to view. The NAAFA.com website also provides information specifically for its paying members to view and this disclaimer applies to those articles as well. Therefore, NAAFA disclaims any liability for any harm that may be done as a result of these opinions being expressed herein. The NAAFA.com website does not guarantee accuracy and correctness of articles posted.
 
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