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-INSURANCE: 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
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
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
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
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
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
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
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
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
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
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
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? Job Vent 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