Category: Public

Since 2019, the insurance market has firmed, creating many challenges for the insurance industry. It’s been a difficult time for the insurance industry as a whole, and like other insurance companies, Farmers Alliance is making changes that affect both our policyholders and our agents. We’re doing our best to make sure our agents are informed about the changes we are making and why we have to make them, so that they can communicate that with their customers. Here is some general information we’re sharing with our agents to prepare them for those conversations.

What is causing the hard insurance market?

The insurance industry has been experiencing many unprecedented changes simultaneously over the past several years.

• Weather events over the past five years have generated record losses for the insurance industry, and the premiums collected were not adequate
• The reinsurance companies that have provided the backstop for large losses have seen the same results and are unwilling or unable to continue to provide coverage.
• The inflation rates for repairing damaged property have grown exponentially over the past several years, adding to the cost of losses.
• The financial markets, including interest rates and equities, have been very volatile, reducing the income needed for insurance companies to offset the increase in losses.

How long will the hard insurance market last?

The insurance market will likely continue to be in its current state for several years.

How is the hard insurance market affecting policyholders?

Insurance companies must shift more of the exposure to loss to policyholders by means of higher premiums and coverage reductions to remain solvent.

• The frequency and severity of weather events over the past several years, combined with the growing cost of repairs due to inflation and volatility in the financial markets, have generated a record number of losses for the insurance industry.
• These challenges are not limited to just a few insurance companies but are systemic throughout the industry.

What can FAMI agents do?

• Sell the value of themselves, their companies, and the coverage provided. Let customers know they will continue to do the best job of providing them with a superior product from a great company.
• Take the time to explain the value provided by the coverage they are buying.
• Since all companies are dealing with these challenges, it may not be in the best long-term interest of insureds to chase a lower premium when facing renewal increases.
• Encourage customers to renew their policies to help build a positive history with the insurance company, which can help them retain their coverage following a loss.

What can policyholders do?

• Talk with your insurance agent about your coverage and your options

The employees at Farmers Alliance are committed to continuing to offer a superior product with a fair premium and unmatched customer service. We know some of the changes we’re making are difficult for our agents and insureds, but we are doing what is necessary to continue to provide them with a great business partner for many years to come.

Wellness is a big deal at Farmers Alliance, and we frequently encourage our employees to stay active and make healthy choices for both the mind and body. One way we encourage healthy choices is by rewarding wellness points for completing certain activities throughout the year and by exercising, which then can be redeemed for wellness-related items. Josh Paine has been with Farmers Alliance for over five years and is a Data Liaison in the IT department. He is an avid, long-distance runner, completing over 20 half marathons and five marathons in the last five years, so it’s easy for him to rack up points. At the end of last year, he decided to cash in his wellness points for two pairs of trail-running shoes so that he could start training for America’s most challenging marathon at Pikes Peak in Colorado. He had completed the Prairie Fire Marathon in Wichita, Kansas in the Fall of 2021, which qualified him for the race, so he decided to go for it and sign up for the Pikes Peak Marathon in Manitou Springs, Colorado.

“Pikes Peak is a very memorable place for my wife, Carri, and me,” said Josh. “We honeymooned in Manitou Springs, and hiked Barr Trail to the summit of Pikes Peak.” The marathon route takes the same trail up the mountain and Josh thought this would be a great way to remember their trip and make some new memories as he pushed himself physically to the limit.

The day before the big race they took the cog railway to the top of Pikes Peak so they could watch the half-marathon runners ascend the mountain. The route for the half-marathon starts in Manitou Springs where riders can board the train and ends at the peak. “As I watched the half-marathon runners, I was motivated and inspired”, said Josh. “There were over 2,000 ascent runners and it was incredible to see so many people coming up the mountain. Especially once we hit 11,000 feet, just above the tree line and you could see for miles.” 

The next day he started on his journey. This marathon was much different from others he had done in the past because it required him to power-hike which he had not had to do on the traditional marathons he had run before. It was a “slow-go” up the mountain, and as he approached the tree line the brain fog started to settle in. He just kept going, and he finally reached the top where he immediately turned around to head back down. The initial descent was mass chaos as the 750 other runners behind him were still trying to pass as they finished their ascent up the narrow trail. He was surprised at how much more difficult the descent was than the climb. The downhill grade put more pressure on his muscles and joints, and he had to control his speed. “I fell twice on the way down because my muscles were tired from the climb. I thought the climb would be more difficult, but the way down hurt much worse,” said Josh.

Josh finished the race in about six and a half hours which was about three hours longer than his typical flat land run time.  “It was such a relief when I finally crossed the finish line. I was shocked by how much longer it took me to run this race compared to previous ones,” he said. “The climb itself took me as long as a typical marathon.” While this was the most challenging marathon Josh had ever done, he is already planning to do it again. Now he has a better understanding of what he needs to do to train, and he thinks he’ll be able to do even better next time.