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Insurer Drops Agents

By Ben Boulden
Times Record •

Until the termination of his contract with Farmers Insurance Group this fall, insurance agent Mark Corbin of Russellville felt honored by the company for the business he had brought it.

Now, he feels like just another brick in the Walk of Fame at their home office in Los Angeles.

As do former Farmers’ agents Junior Day of Logan County and Carol Gunn of Greenwood.

Day said he was honored three times with membership in the company’s Toppers Club in the 27 years he wrote and sold insurance policies for Farmers.

Like Corbin, Gunn said her name is on a brick in the walk, too.

Corbin’s was added as recently as 2003.

“The walk is paved with bricks engraved with the names of those men and women who in 2002 and 2003 challenged themselves to rise above their peers,” Corbin said, reading the certificate during a recent telephone interview. “I’m proud to say you are one of the select few to be so honored.”

Corbin said he received a contract bonus the last two years of his business with Farmers and would have qualified in 2004 if not for his termination.

“My contract was terminated without cause,” Corbin said. “I wasn’t actually given a reason.”

Farmers gave him 90 days notice prior to the termination of his contract on Oct. 29, Corbin said. Corbin had a contract with the company for 16 years.

Because of steep insurance rate increases before his contract ended, Corbin said he had lost 750 policies but was being pressed even harder to produce more sales of new policies.

Rate increases lose business and keep you from producing new ones, he said.

Tiffany O’Shea, spokesperson for the American Insurance Association in the southwest regional office in Austin, Texas, said she isn’t aware of any general economic factors in the industry that are putting price pressure on insurance rates in rural areas in particular. The source of the pressure on rates might be specific to Farmers, she said.

“When I was first put on the program, I was above the average production for an agent in the district,” Corbin said. “Most people think, ‘This guy got fired. He’s a deadbeat.’ I never was the gung-ho type salesman. Never was from the day I signed up. I did build and retain business well with competitive rates. I moved myself to a position where I was the probably the second largest in sales in the district.”

Similarly, Day said he worked hard to build his insurance business in Booneville and for most of his career enjoyed a good living from it.

“We were doing exactly what we were told,” Day said. “Of course, we don’t have anything in writing. It’s my word against theirs. We were told, ‘Work your butt off for 10 years, get it where you want it and sit back and let it take care of itself. Be there for clients and walk-ins. Take care of what you’ve got and

you’ll have referrals and all. You’ll have good benefits.’ I did. I wasn’t going to start over again at 64 years old with those 12-hour days.”

Day also blamed higher insurance rates for losses in the final years of his career.

“They got the rates so high that we couldn’t write anything,” he said. “Then they were hollering because we weren’t selling financial services and writing life (insurance policies) and we were losing business. I was losing it hand over fist and it hurt.”

What Day was used to and had been successful selling in the past was property and casualty coverage, but he felt Farmers wasn’t as interested in those policies anymore as it was life insurance and financial services.

Mike Wolfe, Farmers Insurance’s district manager for western Arkansas, said the company still is committed to selling property and casualty as well as life and financial services. He and Don Sturm in Farmers Insurance’s Little Rock office declined to comment on the specifics of the terminations of the contracts of the three agents. Sturm said Friday the company’s legal department in Los Angeles was reviewing files of those agents.

Inquiries made with company officials at Farmers’ Los Angeles-based national offices were not answered by 5 p.m. on Friday.

While competing with other companies and agencies, Day learned that Zurich Financial Services Group, the company that owns Farmers, was competing against him. He said a woman brought in a homeowners policy from Zurich that was half of the cost of the Farmers policy he was selling.

In January 2004, Day’s contract was terminated by Farmers.

Although Corbin’s business was moved to another new Farmers agent in Russellville, Day’s customers had their policies moved to an office in Danville.

To him, that didn’t make business sense.

“People in Booneville, Arkansas, don’t go to Danville,” he said. “They go to Fort Smith. They go through Greenwood.”

Day has lived in a travel trailer since May 2004 while waiting for construction on a new house to be completed.

The house is insured with a “builder’s risk” policy Day said he purchased from another insurer for less than half what it would have cost him to obtain from Farmers.

Working under the restriction of a “no compete” clause that prohibits him from doing business with former clients, Corbin is building a business as an independent agent.

Carole Gunn, an agent for Farmers for 24 years until Dec. 27, also hopes to rebuild her business.

Her recent experience was very similar to Day’s and Corbin’s.

“They just take our book of business and give it to another agent,” she said. “They don’t tell the customer, ‘Here’s a list of agents. Let us know who you want.’ They just give it to a new agent and send out a letter that says you’ve got a new agent.”

Both Day and Gunn feel Farmers treated them coldly.

“It’s like it didn’t bother them to lose all that business,” she said. “Then, they terminated all of us. Most of the customers will not stay with Farmers.”

Gunn has been independent less than a month now. She doesn’t enjoy taking questions she can’t answer and still bother her.

“That’s what I dreaded,” she said. “Having to explain it over and over. They’ll ask, ‘Well, why?’ And, of course, I don’t know why. I think in a year or so we’ll know why. They have to have a plan. Why get rid of us for nothing, just because they can? I’m 56 and I have to start all over again.”

© Stephens Media Group, 2005.

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