Organize the information of Farmers Insurance Group
1）
The reason I selected Farmers Insurance Group as my financial intermediary was due to its strong influence and excellent service. First, Farmers Insurance was found in 1928 and it is a subsidiary of the Swiss company Zurich Insurance Group. For nearly a century, Zurich's Farmers Insurance Group becomes the third largest insurance group in the United States. It is not hard to see the logo and branches everywhere in California. Second, it offers steep discounts for people with different requirement. Due to Covid-19, to lighten the burden on the car insured, Farmers Insurance Group decided to offer 25% off discount in April, 2020 for each customer who purchased its car insurance. And I contacted with my broker, he told me that Farmers Inc also offers great student discounts for both international and local students who owns high GPA. For me, I chose this insurance company for my car and its outstanding service really inspired me to know more about the structure of the company.
Reference
Ruedi, B. (2020). Zurich Insurance Group. In Wikipedia. Retrieved from
https://en.wikipedia.org/wiki/Zurich_Insurance_Group
2）
The business types of Farmers Group, Inc go beyond the car insurance and it also provides other insurance like automobiles, homes, small businesses and some financial services products. In the business of financial service insurance, Farmers Group are most afraid of encountering large natural disasters or epidemics. Scratch Restaurants LLC on the April 15 th sued its insurer Farmers Group Inc. for coronavirus-related business interruption coverage. Due to the Covid-19, this restaurant was losing revenue and furloughing 55 workers. (Souter, 2020). Though Farmer Group did not immediately respond to a request for comment so far, based upon past experience, Farmers is likely to lose the case. In 1994, Farmers Insurance was estimated that the losses from the Northridge earthquake alone were $1.3 billion. (Asuda,2020). Multiple, large-scale disasters and epidemics pose high financial challenges to the insurance company.
Asuda, M. (2020). Farmers Insurance Group. In Wikipedia. Retrieved from
https://en.wikipedia.org/wiki/Farmers_Insurance_Group
Souter,G.(2020). Scratch Bar joins list of restaurants suing for coronavirus cover. In Business Insurance. Retrieved from
3）
Due to the Covid-19, some people are in urgent need of money, and they withdrew 401 (k) retirement funds to solve the current problems. I do not judge the action of taking out the retirement pension now. But we need to carefully consider preparing savings in normal times in case of unemployment or some emergencies. 401k Savings Plan of Farmers Group, Inc. is a defined contribution plan with a profit-sharing component and 401k feature. The Savings Plan currently has over 24,600 active participants and over $3.1B in plan assets. Moreover, the 401k account of Farmers Insurance match up to 6%. (Potter,2019) For 2020, under the CARES Act, withdrawal rules and amounts were relaxed for those affected by COVID-19. However, the rules just benefit those who have the habits to manage their funds and maintaining saving.
References
Potter, L (2019). Farmers Group. Inc. In Brightscope. Retrieved from
https://www.brightscope.com/401k-rating/662490/Farmers-Group-Inc/696237/Farmers-Group-Inc-401K-Savings-Plan/
4）
Farmers Insurance announced they are extending additional relief to customers via a 15% reduction in May auto premiums for drivers with Farmers personal auto policies. （Hills, 2020）. The action in May represented the continuation of the April policy, and it also reflected that Coronavirus is a long-time struggle. Moreover, more than 115,000 Farmers business insurance customers in the restaurant, office, retail and service sectors across the country are receiving a 20% credit on two months of their Business Owners Policy (BOP) premium.The two months of credits to business insurance customers, combined with the announced April and May premium reductions for the aforementioned personal auto customers, will provide approximately $300 million in total customer savings.
References
Hills, W (2020). Farmers® and 21st Century® Announce Additional Relief for Customers Until June 1. In Farmers Newsroom. Retrieved from
5）
During the Covid-19, the demand for delivery drivers is increasing because more restaurants deliver meals to the growing number of quarantined people. Farmers group, Inc is loosening restrictions on these delivery drivers to provide personal coverage and more health care. Since the drivers may be infected when delivery but they have to earn their life to get through hard financial situation . And the company is temporarily modifying its personal automobile and motorcycle insurance policies to provide applicable coverage for claims arising from the use of these vehicles for delivery of food, groceries, pharmacy and medical supplies. This is Farmers Insurance’s positive responses to the epidemic since standard personal policies typically exclude such health coverage.
Reference
Retrieved from
6）
Since Farmers Insurance is the subsidiary of Zurich Insurance (North America). so the financial information of Farmers group is integrated in Zurich Insurance’s financial report. In terms of the financial report in Q1 2020, COVID-19 related claims in this year are expected to remain within the Group’s earnings risk tolerance. Experience to date and the Group’s scenario analysis suggest that Property and Casualty claims could total approximately USD 750 million for the full year, of which USD 280 million has been recognized in the first quarter. Gross written premiums in Property & Casualty for the first three months rose 7% on a like-for-like basis, adjusting for currency movements, acquisitions and disposals.
Reference
Zurich Q1 update resilient performance while serving customers and protecting colleagues. In Zurich Media News
https://www.zurich.com/en/media/news-releases/2020/2020-0514-01
7）
Since Farmers Insurance is the subsidiary of Zurich Insurance (North America). so the financial information of Farmers group is integrated in Zurich Insurance’s financial report. During the Covid-19 period. Farmers Group, which are owned by their policyholders, reported a reduction in gross written premiums in the first quarter of 1%. Since Farmers Group offered great discount for their customers to go through the hard time. Underlying growth of 0.4% was offset by an adjustment to previously booked gross premiums relating to lower expected volumes of commercial rideshare business following the issuance of shelter-in-place orders by U.S. state governments in response to the COVID-19 outbreak. However, Farmers group did not pay much attention on the loss of the Q1 2020. It believes that customer satisfaction is much more important.
Reference
Zurich Q1 update resilient performance while serving customers and protecting colleagues. In Zurich Media News
https://www.zurich.com/en/media/news-releases/2020/2020-0514-01
8）
Since Farmers Insurance is the subsidiary of Zurich Insurance (North America). so the financial information of Farmers group is integrated in Zurich Insurance’s financial report.Zurich Insurance.In early 2020, the market coverage rate is increasing. Through the newly opened agent, this is why we can see Farmers Insurance agent stores and signs everywhere.Farmers Life new business sales on an APE basis increased 8% year-on-year driven by increased agent engagement. New business value increased 20% driven by higher sales volumes, positive shifts in the business mix and modeling changes.
However, more agents sometimes means more cost especially in special period. In response to covid-19, Farmers chose to increased the management fees and other related revenues, which increased 13% from the prior year period. Adjusted for the IFRS 15 gross-up of expenses that are fully offset within the expense line and have no impact on FMS’s business operating profit, management fees and other related revenues increased by 2%.
Reference；
https://www.zurich.com/en/media/news-releases/2020/2020-0514-01