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Farmers vs. Auto-Owners

Farmers vs. Auto-Owners

Welcome back to another insurance mega-company showdown! This time, we’re taking a closer look at Farmers and Auto-Owners, two of the largest insurance providers in the country.

Both corporations had humble beginnings, Vern Moulton and four associates founded Auto-Owners in Lansing, Michigan (with one policyholder and under $200 in premiums) just 14 years before John C. Tyler and Thomas E. Leavey put up their own money and literally traveled farm to farm, offering their first policies. Through the Great Depression, the insurance industry served as a beacon to commerce and personal security, leading both companies to a strength in personal lines and business insurance offerings. 

Aligned closely through history, here are some additional metrics to explore the differences in what each corporation brings to the table for their customers:

 

Farmers vs. Auto-Owners

                                            Farmers                                          Auto-Owners

Founded                              1928                                                    1916

Headquarters                    California                                          Michigan

2019 Revenue                    $11.65 billion                                    $7.99 billion

2019 Net Income               – $70.5 million                                 $750 million profit

Total Assets                        $17.02 billion                                   $24.5 billion

Fortune 500 Tenure         5 years                                                17 years

 

Two companies from very different parts of the country, engaged in the same industry, offering similar products and service to the masses. So what is the difference?

The difference in profit line, total assets, and length of success in the marketplace is obvious. Despite having less revenue in 2019, Auto-Owners saw a profit of $750 million. Farmer’s lost $70 million. 

So what does this mean for you?

umbrella with blue splash

Each person’s individual experience will be different, but these numbers do a lot to speak to the overall health of both companies. The more money an insurance company has, the more claims they are able to finalize.

An insurance company with a strong presence in the marketplace and a commanding lead in profits is important, but many consumers find themselves gravitating toward the more “affordable” option. Because insurance contracts are so specific to each individual insurer/insured relationship, we cannot answer the question of whether Farmers or Auto-Owners offers cheaper rates.

But rather than taking to the internet to gather quotes for yourself, we have an easier option: a local independent insurance agent.

 

What is an independent agent and why do I want to work with one?

Before we continue, some clarification. An insurance company, or insurance carrier, is the company that you pay premiums to and that writes your reimbursement checks after you file a claim.

An insurance agent, on the other hand, is the individual or company who connects people with insurance policies. These agents may be “captive,” meaning they can only sell policies from one particular company, or “independent,” meaning they can sell policies from any number of insurance carriers.

An independent agent has something that a one-brand agent can’t offer: diversity. An independent agent can source from the wider insurance marketplace, providing you with the options you need to make the best decision possible. 

lightbulb with various empty thought bubbles

Many of the insurance companies you’ve heard of (and seen an overwhelming amount of commercials for) are primarily singular in their offerings, keeping you within a very specific box. An independent agent is able to break those boundaries, finding you the very best in coverage available. If they’ve had negative experiences with a particular carrier or type of policy, they can choose not to sell those policies anymore.

Beyond diversity in the insurance products, an independent agent is typically a local, engaged business person (or business owner), ready to assist within your actual community.

 

What does local have to do with insurance?

“Local? Why do I care about local, when I’m in confident hands or lulled by a very catchy jingle?”

In our experience, local is everything.

With the world engaged in a health crisis the likes of which has never been seen economically, the focus has shifted to local, where, perhaps, it always should be. 

Independent insurance agents (and the agencies that grow from that entrepreneurial spirit) epitomize the advantage of being present. That is what local means: being there when needed the most to offer business owners, homeowners, car owners, and life owners a real chance to ask questions, get answers, and handle all of their insurance needs in one place.

 

But what about the discounts?

Insurance major marketing ideal numero uno has got to be the discounts. You hear about it non-stop, from quarterbacks to B-list actors.

But what those well-paid individuals leave out is that nearly all insurance companies offer discounts, bundles, and other benefits for using more of their services.

hands holding out piggy bank

That’s right! Neither Farmers, Auto-Owners, Travelers, or any other insurance company is dominating the market in terms of the amount of discounts offered. Nearly the entire insurance industry offers benefits for driving well, staying safe, and minimizing claims. Why? This incentivizes customers to protect more of their lives, efficiently. 

Discounts in insurance aren’t a secret formula, they are the norm. 

 

Conclusion

While you may have seen more commercials for one brand over the other, the numbers don’t lie in terms of profitability, assets, and sheer amount of protection policies offered to individuals like you.

But before you make a decision between Farmers vs. Auto-Owners, talk to an independent insurance agent first. Our agency, Harry Levine Insurance, has been serving the Central Florida community for over 35 years. We’re your neighbors, your friends, and your conduit to all things insurance. 

Jump on our Facebook page and ask a question, call us, or even pop by the office. We love insurance and we love helping you understand your insurance options. We don’t bite (other than delicious foodstuffs), so don’t be intimidated by the insurance vernacular and policy jargon. Just ask!

We promise, we’re excited to speak with you about you, your family, your business, and your insurance. 

About the Author

Jason Levine

Jason received a Masters of Science & Management in Risk Management & Insurance from Florida State University. He has been with Harry Levine Insurance for 9 years and handles the leadership of daily operations. He was the 2013-2014 Florida Association of Insurance Agents Young Agent Council's Agent of the Year. Currently serves on FAIA Board of Directors.

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