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Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges

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Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges

#81

Post by bannedbybros »

Spooky23 wrote: post #46
JKCalhoun wrote: post #2

All I see in the article is the discussion of "profits". I would think the PR department could come up with something about "trying to keep costs competitive for our customers" or something like that. Instead they're telling California and Florida customers to take a hike ... along with 11% of their employees. When is the last time we heard a company enact a company-wide, 50% cut in officer's salaries and a freeze on…

What they are really saying is that they can’t effectively model the risk. Say you were an insurer… would you want to take risk for Florida hurricane losses knowing what we know? If we want a functional insurance market in these places, we need a student loan type solution - make the Feds the reinsurer and have the insurance company mostly administer the policy.

[dead]

Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges

#82

Post by sokoloff »

candiddevmike wrote: post #32
criley2 wrote: post #8

Earlier quoted context omitted.

I hate to be that person, but this is the future. Because of climate change, more of our country is barreling towards "uninhabitable". It's not Farmers fault that we released too much CO2 and now wildfires and hurricanes are way worse and getting even more worse. If the people of California and Florida want insurance so they can build matchbox houses in high risk disaster zones, then they can start a public insurance…

RE: this is the future, what is the reasoning behind the sudden (post COVID it seems) squeezing of profit from everywhere? Seems like every business is pushing profit over employees or customers. Price gauging, layoffs, all of it without any reason besides "more profit". Why the sudden influx of greed?

I'm not sure it's particularly sudden influx, but rather a reaction to economic conditions changing. When money is cheap, economies are expanding, and the equity markets are going gang-busters as a result (from late 2009 [or maybe back to late 2002] through late 2021), it's a relatively easy environment to borrow to expand your business [as an operating company] or to engineer returns to shareholders above the risk-free investment alternatives [as a financial company].

Now, risk-free investments (such as a 30-year US Treasury) are yielding 3x what they yielded just 3 years ago. That dramatically changes the calculus when considering whether to invest in a risk-free or a risk-on asset.

To me, it would be weird if companies acted the same way in such a different environment rather than weird that they act differently.

Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges

#83

Post by loeg »

wahnfrieden wrote: post #68
cscurmudgeon wrote: post #53

Earlier quoted context omitted.

https://www.businessinsider.com/ceos-taking-pay-cuts-prevent...

Execs who are heavily compensated in equity also benefit from reducing their wage salaries to minimize tax liability exposure

Execs heavily compensated in equity take a pay/wealth cut every time the stock goes down, unlike salaried employees.

Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges

#84

Post by whalesalad »

uoaei wrote: post #71
whalesalad wrote: post #47

Earlier quoted context omitted.

When the world is rapidly changing what do you expect to happen? Systems collapse. It’s inevitable.

What is your angle exactly? It's hard to understand the underpinnings of your perspective here. Systems do sometimes collapse, but I would prefer to look at it as "we are smart enough to study these systems and act in the social best interest when failure is imminent or has already happened, and responsible enough to work to improve the society that makes our lives possible."

The world is physically changing. Weather patterns are shifting. Hot is getting hotter. Wet is getting wetter. Wildfires are becoming larger, more prevalent and more destructive. Sea levels are rising. Ocean temperatures are rising.

Parts of the world are becoming inhospitable for human life. We can try as we might to terraform and engineer against it but Mother Nature will win.

At some point as an insurance company or even whole industry needs to look at the data and assess whether the juice is worth the squeeze. These companies - despite marketing materials - don’t care about fixing your home. They are only interested in risk versus reward. When the operating environment becomes too risky you either raise prices astronomically (this is happening) or you pull out entirely because your customer base simply can’t afford it (this is also happening).

Regarding the stance that we are smart enough to outsmart these problems - I agree but also disagree. What do you do when all signs are pointing to no and the cost of potential solutions far outweighs any benefits? You cut your losses and move.

Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges

#85

Post by tfandango »

Analemma_ wrote: post #77
Spooky23 wrote: post #46

Earlier quoted context omitted.

What they are really saying is that they can’t effectively model the risk. Say you were an insurer… would you want to take risk for Florida hurricane losses knowing what we know? If we want a functional insurance market in these places, we need a student loan type solution - make the Feds the reinsurer and have the insurance company mostly administer the policy.

Floridians who want me to shoulder the bill for insuring their beachfront property against hurricane damage can go to hell. Pay for the insurance yourself or move to a place where disasters aren’t common.

I live in Oklahoma. Contrary to popular belief, getting your house destroyed by a tornado is unlikely. But hailstorms are on the rise and roof replacements are becoming more frequent because of them. Insurance has gone up A LOT for everyone, regardless of insurer, and for me despite installing hail resistant shingles last time. I am wondering what happens when people here can no longer afford insurance even though these are not luxury second homes. My agent told me that Texas and Oklahoma are becoming the most expensive states to insure.

Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges

#86

Post by aurizon »

lifechoseme123 wrote: post #40
whalesalad wrote: post #29

Earlier quoted context omitted.

Why are people surprised when a company operates in its’ own best interest? Why should we expect anything else? Insurance companies are just about moving dollars around and hedging risk. Being perturbed about this is like being mad about your dog barking at the mailman. If someone said I’m going to start free climbing the tallest buildings in the world - but I need insurance - the company will tell you to get lost be…

Re: FL & CA becoming uninsurable-- I have almost zero knowledge in that area. I assume it's because of natural disasters such as Fires, Hurricanes, and sea level rise?

There are many problems in Florida in addition to heat engines getting better at what they do = huge insurance fraud problems, restrictive work practices, shortage of stuff to make/fix roofs, shortage of local roof fixers = fukkit, lets walk

Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges

#87

Post by selectodude »

elteto wrote: post #78
Spooky23 wrote: post #46

Earlier quoted context omitted.

What they are really saying is that they can’t effectively model the risk. Say you were an insurer… would you want to take risk for Florida hurricane losses knowing what we know? If we want a functional insurance market in these places, we need a student loan type solution - make the Feds the reinsurer and have the insurance company mostly administer the policy.

There already is a federal program for uninsurable properties (for flooding only, I believe). They take whatever insurers reject. By my understanding, people just keep building on the same spot, even if it floods constantly, therefore they are a huge drain on the program. I don’t see a solution honestly. With global warming large parts of the world will become uninsurable. And we shouldn’t expect insurance companies/…

That federal program is broke as a joke, and it generally comes with extremely high deductibles and poor payouts.

It’s easy for states to regulate insurance companies for political points, which you’re seeing in California and Florida. However, insurance markets collapse slowly and then very very quickly when the math stops working out.

Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges

#88

Post by gorjusborg »

Invictus0 wrote: post #67
gorjusborg wrote: post #57

Earlier quoted context omitted.

I'd also be great if we collectively admitted that one person (no matter who they are) can determine the success of a large organization of people. Today, we compensate them like they are doing the lion's share of the work.

Not seeing many successful CEO-less companies. When you start your democratic/committee-led company, please let us know.

I'll assume you are arguing in good faith, but I doubt it, considering your tone.

I did not say anything about a leaderless company. I said that the current perceived value of C-suite contributor is way over-inflated. That culture can and should change.

Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges

#89

Post by mgkimsal »

BugsJustFindMe wrote: post #60
mgkimsal wrote: post #9

Earlier quoted context omitted.

> overly generous executive pay ... it costs me money But how can you prove that? The very justification for generous executive pay is that you couldn't get most people to do that role because it's so demanding and without these particular people, revenue/profits would tank. (slight exaggeration, but I don't think by much).

> The very justification for generous executive pay is that you couldn't get most people to do that role because it's so demanding That's also my justification when I eat a second bowl of ice cream. Surely nobody else will want this ice cream. I guess I'll just have to eat it myself.

"This ice cream isn't going to eat itself" :)

Re: Farmers Insurance Laying Off 11% of Workforce, Citing Industry Challenges

#90

Post by selectodude »

hypeit wrote: post #51
whalesalad wrote: post #29

Earlier quoted context omitted.

Why are people surprised when a company operates in its’ own best interest? Why should we expect anything else? Insurance companies are just about moving dollars around and hedging risk. Being perturbed about this is like being mad about your dog barking at the mailman. If someone said I’m going to start free climbing the tallest buildings in the world - but I need insurance - the company will tell you to get lost be…

> An insurance company is not a charity it’s just a profit engine. Odd then that so many forms of insurance are mandated by the government.

The insurance mandates are for things that impact either your life or other people. I don’t want your judgement proof ass hitting me with your car without the ability to fix it, nor do I want you using emergency medicine as a pediatrician. Thus, mandates.
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