State Farm|With 100% Complete Solutions|Already Graded A

Commissions: 1. Can earn variable comp between 8% - 11% but 10% is avg commission 2. $18,000 signing bonus and up to $10,000 if you have to relocate 3. Scorecard bonus allows them to earn 3x their commissions if they hit quotas on Fire, Auto, Life, Health, Bank, and Financial Products Book ownership/Contract 1. Agents are recruited from corporate careers or from the State Farm employee pool 2. Aspirant Intern ("New Market" OR "Assignment" TICA Permanent Contract (AA05). 3. Permanent Contracts include the AA94 (1994), AA97 (1997) and the AA05 (2005) 4. Agent Aspirant program is for those who aspire to be a State Farm agency owner. 5. Intern program: a. This is the training program to launch an agency b. Typically 9 months but can go longer if an agent is waiting for an assignment. c. Agents can launch an agency in two ways. A: New Market (scratch agency) B: Assignment (given a book of business) d. Some agents are fast-tracked and get their TICA contract prior to 9 months (this is happening more often now that they are having a high turnover rate with their agents and more markets are regularly available) 6. TICA (Term Independent Contract Agent) a. This is the beginning contract for a new agents (to "prove" themselves) b. They have quotas for Fire, Auto, Life, Health, and Financial Products (Bank, Annuities/Mutual Funds, Mortgage loans, Auto loans) c. They offer enhanced compensation through "premium builder" if they hit quotas up to $11,000/mo (1st yr), $10,000/mo (2nd yr), $8500/mo (3rd yr), $7k/mo (4th), $5k/mo (5th) d. This contract goes up to 5 years. e. "Scorecard" bonus for hitting quotas is paid out in March for the prior calendar year's production. To "max out" their scorecard, they have hit high production numbers across all of the lines of business, and it will pay a higher multiple of their overall commissions. Scorecard bonuses can be as high as $100,000+ f. There are many achievement awards for top producing agents including: "Top 100", "Chairmans Circle", "Travel" awards, "Million Dollar Round Table (MDRT) g. TICA is up to 5 years, but agent may be offered permanent contract sooner. h. They may be terminated anytime on this contract. 7. Permanent contract is the next step from TICA. The current contract is called the AA05, older contracts: AA97, AA94. a. No quotas, however, agents still work towards maxing out their compensation through their scorecard bonus and earn other rewards such as travel b. Top performing agents may be "rewarded" a "TASP" book (an assignment) after another agent retires or is terminated. The agent takes a lower commission and if they can successfully service the book of business they will eventually be full compensated for it. c. State Farm agents to NOT own their book nor do they have the ability to sell the agency or transfer their agency to a family member, however, they may approve up to 500 households to be transfers to a family member. d. The AA05 contract offers an "AAIP" program which is essentially their retirement program, where State Farm will e. State Farm has approved a few "MOAs" Multiple Office Agents, but this is not very common 8. No book ownership, though they do offer an AAIP (retirement) program for AA05 agents, that is paid after 6 years. AA97 and older have a lucrative pension which is hard for them to walk away from. 9. State Farm only allows agents to transfer 500 households to a family member who must be a State Farm agent 10. They are required to have their 6/63 license for financial products. Some have their mortgage license 11. Agency Management System: Prospector Plus and they've rolled out a small portion of Salesforce. They are still using a DOS system for endorsements 12. Agent is responsible for all servicing and all back-office administration 13. Many agents are leading with renters and auto policies as their marketing plan as that is where they are competitive 14. Agents are required to do home inspections on home policies they write 15. Agents are responsible for their "premium fund account" and reconciling it at the end of every month overview 1. Largest captive of home & auto, serving more than 74 million customers with 17,000 agents 2. Headquartered in Bloomington, IL 3. Privately held, founded in 1922 4. CEO: Ed Rust Jr. 5. Products are typically highest price in the market, especially homeowners 6. They sell the "HOW" home product (proprietary name, all-peril policy) 7. They have closed several markets for homeowners. Agents are forced to focus on auto and renters. 8. Political environment frustrates many of the agents. Field Sales Leaders operate as managers over the agents and tend to "breathe down the agents neck" to increase production 9. Political environment has agents "Buying their way to the Top 100" 10. Many agents are in debt as high as $75k+ to open their agency, spending thousands of dollars on office build-out, high overhead including several employees to start and high marketing expenditure. 11. Product is typically more competitive with auto than home