THE FARMERS INSURANCE
®
RETAIL OPPORTUNITY
CONFIDENTIAL
ABOUT FARMERS
®
Leadership, Stability, and Brand Recognition
CONFIDENTIAL
3
2019-06 Farmers
1928
Established
More than
11,000
Exclusive agents
Serve more than
10 Million
Households
with more than
19 Million
individual policies
Industry-leading
training
University of Farmers
®
Over $20
Billion
in combined assets
36
States
24/7
Award-winning claims
department service
Over 20
Insurance and
Financial Products
4
BRAND RECOGNITION AND COMMUNITY INVOLVEMENT
• Nationally recognized We Are Farmers
®
advertising campaign
• Proud sponsor of golfer Rickie Fowler and the Farmers Insurance Open
®
• G.I. Jobs named Farmers a Top 150 Military Friendly Employer in the US
• Supports at-risk youth through grants and sponsorship for the The First Tee, ASYMCA
and Boys & Girls Clubs.
• Collaborates with SBP, American Red Cross
®
, and Team Rubicon
®
on long-term
disaster recovery, along with the Farmers Catastrophe Response Team
• Annual float participant in the Rose Parade
®
on New Year’s Day
One of America’s most recognizable brands
CONFIDENTIAL
5
INSURANCE AND FINANCIAL SERVICE PRODUCTS
Personal Lines, Commercial, Specialty, Life
1
, and Financial Services
2
Property & Casualty
• Auto
• Home & Renters
• Umbrella
• Small Business
• Habitational
• Boat
• Motorcycle
• Motor Home
• Mobile Home
• Commercial P&C
• Workers’ Compensation
Life Insurance
1
• Term Life
• Whole Life
• Universal Life
• Indexed Universal Life
• Critical Illness
• Accidental Death
• Disability
• Group Term
• Fixed Annuities
• Advanced Market
Life Solutions
Financial Products
2
• 529 Plans
• 401(k) Plans
• Variable Annuities
• Roth IRAs
• SEP
• Simple IRAs
• Variable Life
• Mutual Funds
• Nationally Recognized
Fund Families
Auto Home Life
1
Business Recreational Motorcycle Umbrella Renters Financial
2
1
Life insurance issued by Farmers New World Life Insurance Company, 3003 77th Ave. SE, Mercer Island, WA 98040. Products and features may not be available in all states and may
vary by state. Restrictions, exclusions, limits, and conditions apply.
2
Securities offered through Farmers Financial Solutions, LLC. Member FINRA & SIPC. Some products may not be available in all states.
CONFIDENTIAL
6
OUTPLACEMENT OPTIONS
Through wholly owned Kraft Lake Insurance Agency, Inc. and outside appointments
• National brokerage wholly owned by Farmers
• Provides Farmers agents with access to external company products that
complement Farmers products and help round out accounts
• Based in Grand Rapids, Michigan, Kraft Lake is staffed with representatives who have
a wide background of insurance experience
• Business that is not acceptable to Farmers and not eligible for placement through
Kraft Lake may be placed outside of Farmers
Contractor’s
General Liability
High Value
Homeowners
Farm
& Ranch
Professional
Liability (E&O)
E&S Vacant
Building/Land
CONFIDENTIAL
THE RETAIL PROGRAM
36-month new agent financial support program
that rewards high levels of performance
CONFIDENTIAL
8
THE RETAIL PROGRAM
Five retail
bonus opportunities
1. $10,000 Agency Start-Up Bonus for establishment of branded office location
2. $300 Monthly Marketing Bonus for up to 36 months
3. Bonus on net NB commissions earned while on Reserve agent program
1
4. Monthly Bonus Program based on net NB commissions for up to 36 months
5. Annual Bonus Program based on net NB commissions for up to 3 years
36-month new agent financial support program that rewards high levels of performance
Other key program benefits
1. Retail bonuses are all non-repayable and in addition to commissions
2. Bonuses are paid monthly per the established schedules and guidelines
3. Production requirements reset each quarter and year
4. Additional bonus opportunities following completion of the Retail Program
5. New agent training program from the University of Farmers
®
1
This one-time bonus also applies to the Associate agent program
CONFIDENTIAL
9
THE RETAIL PROGRAM
Quarterly bonus schedule for the monthly bonus opportunity
1
• Production determines bonus based on net NB commissions paid the next quarter
- For example, achieving $10,000 net NB commissions and 3 Life Issued & Paid in Q1 would receive a
300% bonus based on net NB commissions produced during Q2
1
Monthly Bonus on Net New Business Commissions Paid
Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12
Tier A 300% 300% 300% 300% 180% 180% 180% 180% 60% 60% 60% 60%
Tier B 300% 270% 270% 270% 162% 162% 162% 162% 54% 54% 54% 54%
Tier C 300% 240% 240% 240% 144% 144% 144% 144% 48% 48% 48% 48%
Net New Business Commissions Paid and Life Issued and Paid Quarterly Requirements
2
Area 1 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12
Tier A 10,000 / 3 10,000 / 3 10,000 / 3 10,000 / 3 12,000 / 4 12,000 / 4 12,000 / 4 12,000 / 4 15,000 / 5 15,000 / 5 15,000 / 5 15,000 / 5
Tier B 7,000 / 2 7,000 / 2 7,000 / 2 7,000 / 2 8,500 / 3 8,500 / 3 8,500 / 3 8,500 / 3 12,000 / 4 12,000 / 4 12,000 / 4 12,000 / 4
Tier C 3,000 / 1 3,000 / 1 3,000 / 1 3,000 / 1 5,000 / 2 5,000 / 2 5,000 / 2 5000 / 2 7,500 / 3 7,500 / 3 7,500 / 3 7,500 / 3
Area 2 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12
Tier A 9,500 / 3 9,500 / 3 9,500 / 3 9,500 / 3 11,400 / 4 11,400 / 4 11,400 / 4 11,400 / 4 14,250 / 5 14,250 / 5 14,250 / 5 14,250 / 5
Tier B
6,650 / 2 6,650 / 2 6,650 / 2 6,650 / 2 8,075 / 3 8,075 / 3 8,075 / 3 8,075 / 3 11,400 / 4 11,400 / 4 11,400 / 4 11,400 / 4
Tier C 2,850 / 1 2,850 / 1 2,850 / 1 2,850 / 1 4,750 / 2 4,750 / 2 4,750 / 2 4,750 / 2 7,125 / 3 7,125 / 3 7,125 / 3 7,125 / 3
Area 3 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12
Tier A 9,000 / 3 9,000 / 3 9,000 / 3 9,000 / 3 10,800 / 4 10,800 / 4 10,800 / 4 10,800 / 4 13,500 / 5 13,500 / 5 13,500 / 5 13,500 / 5
Tier B 6,300 / 2 6,300 / 2 6,300 / 2 6,300 / 2 7,650 / 3 7,650 / 3 7,650 / 3 7,650 / 3 10,800 / 4 10,800 / 4 10,800 / 4 10,800 / 4
Tier C 2,700 / 1 2,700 / 1 2,700 / 1 2,700 / 1 4,500 / 2 4,500 / 2 4,500 / 2 4,500 / 2 6,750 / 3 6,750 / 3 6,750 / 3 6,750 / 3
1
Monthly and annual bonuses paid based on Life and Commercial commissions are subject to specified maximum amounts
2
Each ZIP Code assigned to Area 1, 2, or 3 which determines monthly and annual bonus requirements
ALL STATES EXCEPT CT, NY, AND FLCONFIDENTIAL
10
THE RETAIL PROGRAM
Annual bonus schedule for the monthly bonus opportunity
1
Production determines bonus
based on net NB
commissions paid
- For example, achieving
$40,000 net NB commissions
and 12 Life Issued & Paid in
Y1 would receive a 60%
bonus based on net NB
commissions produced
during Y1
1
Bonus paid in 12 equal
installments the following year
1
Monthly and annual bonuses paid based on Life and Commercial commissions are subject to specified maximum amounts
2
Each ZIP Code assigned to Area 1, 2, or 3 which determines monthly and annual bonus requirements
Annual Bonus on Net New Business Commissions Paid
Year 1 Year 2 Year 3
Tier A 60% 60% 60%
Tier B 50% 50% 50%
Tier C 40% 40% 40%
Net New Business Commissions Paid and Life Issued and Paid Quarterly Requirements
2
Area 1 Year 1 Year 2 Year 3
Tier A 40,000 / 12 48,000 / 16 60,000 / 20
Tier B 28,000 / 8 34,000 / 12 48,000 / 16
Tier C 12,000 / 4 20,000 / 8 30,000 / 12
Area 2 Year 1 Year 2 Year 3
Tier A 38,000 / 12 45,600 / 16 57,000 / 20
Tier B 26,600 / 8 32,300 / 12 45,600 / 16
Tier C 11,400 / 4 19,000 / 8 28,500 / 12
Area 3 Year 1 Year 2 Year 3
Tier A 36,000 / 12 43,200 / 16 54,000 / 20
Tier B 25,200 / 8 30,600 / 12 43,200 / 16
Tier C 10,800 / 4 18,000 / 8 27,000 / 12
ALL STATES EXCEPT CT, NY, AND FLCONFIDENTIAL
11
THE RETAIL PROGRAM
Bonus illustration
The above agent would receive $219,600 in non-repayable Retail bonuses for achieving
a total of $60,000 in applicable net NB commissions during the first year
3
1
Monthly and annual bonuses paid based on Life and Commercial commissions are subject to specified maximum amounts; this example assumes Tier A applies
2
Bonus paid in 12 equal installments the following year
3
Assumes all bonus eligibility requirements were achieved
Illustration of Potential Retail Bonuses for 1st Year Based on 12 Life I&P and $60K in Applicable Net NB Commissions
Net NB
Commissions
Paid
Monthly Bonus
on Net NB
Commissions Paid
1
Monthly
Marketing
Bonus
Annual Bonus
on Net NB
Commissions Paid
2
Total Bonus
and Net NB
Commissions Paid
Q1 $15,000 + 300% or $45,000 + $900 = $60,900
Q2 $15,000 + 300% or $45,000 + $900 = $60,900
Q3 $15,000 + 300% or $45,000 + $900 = $60,900
Q4 $15,000 + 300% or $45,000 + $900 = $60,900
Y1 $60,000 + $180,000 + $3,600 + 60% or $36,000 = $279,600
ALL STATES EXCEPT CT, NY, AND FLCONFIDENTIAL
WHAT IT MEANS
TO BE AN
EXCLUSIVE AGENT
CONFIDENTIAL
13
WHAT IT MEANS TO BE AN EXCLUSIVE AGENT
• Agent appointment agreement
- Business that is not acceptable to Farmers or eligible for placement through Kraft Lake can be
placed outside
• Numerous incentives and bonus opportunities including
1
- Growth bonuses for Personal Lines, Commercial, and Life
- Achievement Clubs, including Topper Club and Presidents Council
- Trips to the Farmers Insurance Open
- Other bonuses and incentives for performance as a Farmers agent
• Opportunity to participate in our Protégé Agency Producer program
1
- Agents may receive up to $25,000 for any Protégé Agency Producer who produces $100,000 in
applicable NB premium within 12 months and becomes a Farmers agent
• Service and commission rights
2
- Opportunity to sell service and commission rights on the open market
- Ability to purchase service and commission rights of another Farmers agent
• Contract Value opportunity
2
Farmers support and products, acquisition opportunities,
bonuses and incentives, and more
1
Incentives and bonus opportunities subject to change at any time and may not be available to all agents
2
Refer to agent appointment agreement for more information
CONFIDENTIAL
