Farmers Group is reducing its staff again, just a year after it let go of 11% of its employees, which amounted to 2,400 individuals.
This time, the insurance company has stated that it will not reveal the number of employees at risk of job loss. Nevertheless, on August 7, the company submitted a WARN (Worker Adjustment and Retraining Notification) in California, indicating that 84 workers would be permanently terminated effective October 7.
The insurance company located in Los Angeles is optimizing its existing exclusive agency (EA) framework in the Eastern region by shifting to a district manager approach, similar to what is already implemented in its Western and Central areas. This model allows district managers to develop their own enterprises while mentoring EAs, as mentioned in a video on the company’s website.
Farmers will continue to operate its EA distribution channel along with its West, Central, and East organizational structure; however, the support roles for East EAs will be impacted by the ongoing streamlining efforts. Luis Sahagun, the corporate communications director, mentioned that there will be an “internal restructuring of certain state duties.”
Farmers sells its products via exclusive agencies, independent representatives, direct online sales, and company-operated call centers.
Comments on the internet indicate that the recent layoffs could impact area sales managers as well as those working in human resources, recruitment, and temporary staffing.
Sahagun mentioned that all employees impacted by the situation are eligible to apply for different roles within the organization. According to the job platform Indeed.com, Farmers currently has over 370 job openings.
“Our aim is to create agencies that are bigger, more robust, and more varied, and we anticipate substantial growth as a result of this shift. Our approach is centered on fostering a setting that enables entrepreneurs to flourish,” stated Sahagun.
Farmers, a subsidiary of Zurich Insurance Group, has been working to lessen its risk associated with natural disasters, particularly in Florida and California. The company has received feedback from several of its internal adjusters in the Southeast who allege they are short-staffed and overloaded with work.
Farmers’ decision aligns with the actions taken by other major insurance companies.
In the previous month, Nationwide revealed plans to decrease its workforce by approximately 5% within the coming year. In February, Liberty Mutual disclosed that it would be cutting an additional 250 jobs. Furthermore, USAA shared news of another set of layoffs in April.
The trend of layoffs within the industry is expected to persist. A recent analysis of the labor market indicates that 14% of insurance firms intend to cut their workforce over the next year. The research conducted by Aon and The Jacobson Group revealed that although 79% of insurance companies anticipate revenue growth, only 52% are looking to hire more staff, while 34% aim to keep their current employee numbers unchanged.
Nonetheless, 64% of smaller insurance firms intend to increase their workforce in the coming year.
According to Jacobson and Aon, the total workforce employed by insurance firms in the United States is slightly over 1.6 million and has stabilized. In contrast, when considering the entire insurance sector, which encompasses distribution, a different trend emerges. Over the last year, the industry has created close to 42,000 new positions, bringing the overall employment figure to 3.025 million.
In their report from early 2024, Aon and The Jacobson Group anticipated that the growth of jobs in the insurance sector would level off.
The research revealed that the primary factor driving companies to consider workforce reductions in the upcoming year is automation, with overstaffing being the second leading reason. Additionally, certain companies are adjusting their portfolios, as some multi-line property and casualty insurers are scaling back their personal lines divisions.
