Farmers Insurance Group
| Company type | Reciprocal inter-insurance exchange (brand) |
|---|---|
| Industry | Insurance |
| Founded | 1928 in Los Angeles, California, United States |
| Founders | John C. Tyler, Thomas E. Leavey |
| Headquarters | Los Angeles , United States |
Area served | United States |
| Products | Automobile insurance, homeowners insurance, motorcycle insurance, life insurance, recreational vehicle insurance, commercial insurance, financial products |
Number of employees | 21000 |
| Parent | Zurich Insurance Group (via Farmers Group, Inc.) |
Farmers Insurance Group (commonly known as Farmers) is a U.S.-based insurance provider focusing on coverage for automobiles, residences, small enterprises, and a variety of financial products. The company operates through a network exceeding 48,000 exclusive and independent agents, supported by roughly 21,000 employees. Farmers functions as the brand name for a trio of reciprocal exchanges—Farmers, Fire, and Truck—each administered by Farmers Group, Inc., which acts as attorney-in-fact on behalf of policyholders. Farmers Group, Inc. is fully owned by Zurich Insurance Group, headquartered in Switzerland.
1922 to 2000
- 1922
John C. Tyler and Thomas E. Leavey, the company’s founders, connected after Tyler relocated to California. Both originating from agricultural backgrounds, they recognized that farmers and ranchers were an underserved demographic deserving of reduced insurance rates due to their superior driving records. Capitalizing on the growing trend of farmers establishing mutual insurance cooperatives, Tyler and Leavey set out to create an auto insurance company specifically catering to rural motorists.
- 1927
With financial backing from the founder of Bank of America, Tyler and Leavey officially launched their enterprise.
- 1928
The Farmers Automobile Inter-Insurance Exchange was founded in downtown Los Angeles with Tyler as president and Leavey as vice president. The initial team consisted of four individuals. On March 30, 1928, Charles Brisco became the first insured customer by protecting his 1925 Cadillac Phaeton.
- 1935
The establishment of Truck Insurance Exchange introduced a reciprocal insurer dedicated to truck coverage.
- 1936
Farmers Insurance Exchange earned recognition as the top reciprocal auto insurer based on premiums collected.
- 1937
A new headquarters building on Wilshire Boulevard was inaugurated to accommodate both Farmers Automobile Inter-Insurance Exchange and Truck Insurance Exchange operations.
- 1942
The launch of Fire Insurance Exchange marked the addition of a third reciprocal insurer concentrating on homeowners insurance.
- 1950
Mid-Century Insurance Company was acquired as a subsidiary under Farmers Insurance Exchange, broadening its portfolio to include inland marine, robbery and burglary protection, personal lines, plate glass coverage, bonds, and floaters.
- 1953
Farmers expanded further by acquiring Seattle’s New World Life Insurance Company.
- 1959
The company began participating annually in the Pasadena Rose Parade, signaling its commitment to community involvement nationwide.
- 1973
Following the death of John C. Tyler at age 86, Thomas E. Leavey took over as CEO until his retirement in 1978.
- 1988
After an eight-month acquisition contest, BATUS Inc., the American arm of British conglomerate B.A.T. Industries Plc, purchased Farmers Group, Inc. for $5.2 billion, becoming the sole owner of all 68 million shares.
- 1989–1994
Major natural catastrophes such as the 1989 San Francisco earthquake, the 1991 Oakland firestorm, and the 1994 Northridge earthquake inflicted substantial financial losses on Farmers Insurance. The Northridge event alone resulted in estimated claims totaling $1.3 billion.
- 1998
Zurich Financial Services Group was created through an $18.6 billion merger with B.A.T. Industries’ financial services division under a dual holding company arrangement, establishing Zurich as the parent corporation of Farmers.
2000 to present
- 2000
In March 2000, Foremost Corporation of America, a prominent insurer specializing in manufactured homes, recreational vehicles, boats, and niche insurance lines, was acquired by the Farmers Exchanges.
By August 2000, Farmers Financial Solutions had registered as a broker-dealer with the U.S. Securities and Exchange Commission, allowing Farmers to distribute mutual funds and variable insurance products.
Zurich Financial Services was formed in October 2000 as a consolidated Swiss holding company, with its primary listing on the SWX Swiss Exchange under the ticker ZURN and a secondary listing in London. Its American Depositary Receipts (ADRs) are traded on the American Stock Exchange.
- 2005
Following Hurricane Rita's impact on Beaumont, Texas in 2005, Farmers Insurance mobilized nearly 300 adjusters to speed up property damage evaluations and donated $100,000 along with generators to aid emergency response efforts.
- 2007
In July 2007, the Farmers Exchanges expanded by acquiring Bristol West Holdings, a company focused on providing non-standard auto insurance for drivers considered high-risk.
During the October 2007 California wildfires, Farmers distinguished itself as one of the few insurers to rapidly set up customer assistance centers. The company funded evacuation and lodging expenses and deployed two Mobile Command Center vehicles to Qualcomm Stadium within two days to streamline claims processing.
- 2009
April 2009 marked Farmers’ acquisition of 21st Century Insurance from AIG for $1.9 billion, elevating it to the position of third-largest personal lines insurer in the United States. This deal also included AIG’s Hawaii operations.
- 2014
In response to heightened storm activity between 2010 and 2013, Farmers collaborated with the disaster relief nonprofit SBP to create the Disaster Recovery Playbook—an evolving digital toolkit designed to help communities accelerate home recovery efforts. AmeriCorps later became a partner in this project.
- 2020
In December 2020, a joint acquisition by Farmers Exchanges and Farmers Group, Inc. of MetLife’s property and casualty division (MetLife Auto & Home) was announced, broadening their market reach and product offerings.
Operations
- The Farmers Exchanges, headquartered in Los Angeles, California, comprise three reciprocal inter-insurance exchanges: Farmers Insurance Exchange, Fire Insurance Exchange, and Truck Insurance Exchange. Policyholders exchange coverage through Farmers Group, Inc. (FGI), which serves as attorney-in-fact and manages operational functions for fees based on premium volume. These exchanges provide homeowners, automobile, commercial insurance, and financial services nationwide. Claims handling and payments are conducted by FGI under subscription agreements. As unincorporated associations lacking legal personality, the Farmers Exchanges have no owners; neither FGI nor parent company Zurich Financial Services Ltd. possess ownership of these exchanges.
- The Foremost Insurance Group, headquartered in Grand Rapids, Michigan, offers specialized coverage for mobile homes, motor homes, travel trailers, specialty residences, motorcycles, off-road vehicles, boats, and personal watercraft. Founded in 1952 and acquired by the Farmers Exchanges in 2000, it operates as their subsidiary.
- The Bristol West Insurance Group became part of Farmers in July 2007. Founded in 1973 to provide private passenger auto insurance within Florida, it now delivers liability and physical damage coverage exclusively for private passenger vehicles across the United States. Bristol West functions as a subsidiary of the Farmers Exchanges.
- 21st Century Insurance, based in Wilmington, Delaware, joined Farmers in July 2009. It offers personal auto insurance nationally through internet platforms and direct response marketing channels. This company operates as a subsidiary under the Farmers Exchanges.
- Farmers New World Life Insurance Company, initially established as Catholic Life Insurance Company in Spokane, Washington in 1910 and renamed New World Life Insurance Company that same year, was acquired by Farmers Group, Inc. in 1953 and received its current name in 1954. Located in Bellevue, Washington, it provides universal life insurance, term life insurance, whole life insurance products, and annuities as a subsidiary of Farmers Group.
- Farmers Financial Solutions, LLC was launched by the Farmers Exchanges in 2000 to deliver financial products to their clientele.
Products and services
Farmers provides a diverse range of insurance and financial products, including:
- automobile insurance;
- homeowners insurance, which extends coverage to owners of single-family homes, condominiums, renters, mobile and manufactured residences, as well as specialized properties such as landlord and seasonal homes; flood insurance is also offered through the National Flood Insurance Program;
- motorcycle coverage;
- life insurance policies, encompassing term, whole, and universal options;
- recreational vehicle insurance for boats, all-terrain vehicles (ATVs), recreational vehicles (RVs), and travel trailers;
- commercial insurance tailored to small and mid-sized businesses, with offerings like liability, property, commercial auto, and workers’ compensation insurance. This service supports various industries including apartment complexes, commercial real estate owners, artisan contractors, retail establishments, service providers, office environments, religious institutions, educational organizations, non-profits, hospitality businesses such as hotels and bed & breakfasts, light manufacturing operations, restaurants, wholesale distributors, and automotive service and repair shops;
- financial products such as mutual funds and variable annuities.
Farmers Field
In 2011, Farmers entered into a 30-year agreement to acquire naming rights for a planned $700 million football stadium in downtown Los Angeles near the Staples Center. The deal included an initial annual payment of $20 million. The stadium was intended to be called "Farmers Field"; however, the initiative was ultimately abandoned after Kroenke Sports & Entertainment announced SoFi Stadium as the new venue for the Los Angeles Rams and Chargers.
The Farmers Insurance Open
Since 2010, Farmers has served as the title sponsor for the Farmers Insurance Open PGA tournament held at Torrey Pines in California. This event annually raises millions of dollars benefiting charitable organizations in the San Diego area.
NASCAR
Between 2012 and 2017, Farmers sponsored the No. 5 Chevrolet SS driven by Kasey Kahne for Hendrick Motorsports in the Monster Energy NASCAR Cup Series. Prior sponsorships included drivers Mark Martin and Travis Kvapil. Notably, Farmers was the first to display a #hashtag on a race car. Kahne’s inaugural victory with Farmers came at the 2012 Coca-Cola 600 at Charlotte Motor Speedway. The collaboration produced six wins over six seasons, including a prestigious Brickyard 400 triumph. Following the 2017 season, Farmers concluded its partnership with Hendrick Motorsports and exited NASCAR sponsorship.
Advertising
The television advertising campaigns of Farmers Insurance Group prominently feature "Farmers University," where professor Nathaniel Burke—portrayed by J. K. Simmons—instructs employees about unusual insurance claims handled by the company. These ads emphasize the extensive scope of Farmers’ product and service offerings.
Complaints to state insurance departments
In 2006, Farmers Insurance recorded the highest volume of complaints submitted to state insurance regulators in both Washington and Oregon states, indicating customer service challenges within these significant markets.
Lawsuits
- In 1999, a dispute involving Melinda Ballard’s mold damage claim resulted in a multi-million dollar settlement after initial awards were reduced upon appeal.
- In 2005, Farmers initially refused payment on a car accident claim alleging intentional harm by another driver; however, Washington state authorities later required the insurer to fulfill the claim.
- In 2007, Farmers faced a $3 million fine for neglecting to provide legal defense to limited-income homeowners involved in a negligence lawsuit.
- In 2008, the company was ordered to pay $2.5 million due to bad faith practices in claim handling and delays in settlement resolution.
- A class-action lawsuit filed in 2013 accused Farmers of failing to compensate for diminished vehicle value; this was settled for up to $48.5 million while Farmers denied any wrongdoing.
- In 2015, current and former employees launched a class action alleging unpaid overtime linked to improper exemption classifications.
- Also in 2015, female in-house attorneys brought forth a discrimination class action concerning disparities in pay and promotion opportunities; this case concluded with a $4 million settlement in 2016 along with commitments from Farmers to implement policies advancing gender equity.
These legal proceedings have influenced Farmers Insurance’s public image and highlight the critical need for rigorous compliance measures and effective leadership strategies to manage risk while sustaining competitive positioning in the marketplace.
Financial ratings
- In 2008, A.M. Best Company assigned Farmers an A rating, denoting an Excellent financial standing.
- Moody's Investor Service awarded a 2008 rating of A2, reflecting a Good credit quality.
- According to Standard and Poor's in 2008, the company held an A rating with a Stable outlook.
Customer service record
- The 2006 American Customer Satisfaction Index revealed that Farmers' customer satisfaction was on par with the average for the Property and Casualty sector, demonstrating the greatest improvement among surveyed firms from 2005 to 2006.
- Consumer Reports placed Farmers Insurance among the "lowest performers" in March 2006 for processing auto claims within a 30-day timeframe.
- In the 2007 JD Power Collision Repair Satisfaction Study, Farmers ranked at the bottom across all four evaluated categories, tying for 20th place out of 26 insurers.
- Farmers Insurance Group earned the J.D. Power award for Call Center Customer Service Excellence consecutively in 2005, 2006, and 2007.
- Bristol West reported a complaint ratio of 3.42 in 2008, compared to the national median of 1.0, based on NAIC data.
- During 2006 and 2007, state insurance departments in Washington and Oregon recorded Farmers Insurance as having the highest volume of complaints, particularly concerning auto and homeowners insurance policies.