Thanks To Merger, Farmers Brand Heads East

Farmers Insurance officially started its eastward expansion this week. The company began by offering auto and homeowners insurance in Maryland and Pennsylvania, and will add another 10 eastern and southern states to its service area by the end of 1999.

"This expansion will change the insurance industry landscape in the Eastern United States," said Martin D. Feinstein, chairman and chief executive officer of Farmers. "We immediately bring increased competition and selection of products, national brand name recognition, financial strength and a long-term commitment to customers in these new markets."

In September 1998, Farmers was involved in a merger with Zurich Insurance, which created the Zurich Financial Services Group, a global insurance and asset management organization. Farmers is the largest enterprise in the new Zurich Financial Services Group with more than $10 billion in premiums, 16,000 employees, 15,000 agents and more than 16 million policies-in-force.

Because of the new partnership created by the merger, the former Zurich Personal Insurance, which has a customer base primarily concentrated in the Eastern United States, has become a part of Farmers and will now use Farmers' brand and products. The former Zurich Personal Insurance has approximately 200,000 customers and 400 agents in the 12 states targeted for initial expansion. These are Maryland, Pennsylvania, New York, Georgia, North Carolina, Maine, Connecticut, Kentucky, New Hampshire, Louisiana, Vermont and Mississippi.

Agents representing Farmers will initially offer home and auto products. "We want to be the dominant writer and the No. 1 agency company in these states," said Feinstein. "We intend to draw new customers to the independent agent through our aggressive marketing strategy—competitive prices, superior products and excellent customer service."

In the new expansion states Farmers will capitalize on the existing Zurich Personal Insurance relationship with independent agents to distribute products. Farmers will grow the agency force quickly, adding 180 agencies to the ranks in 1999.

"Farmers strongly believes that the one-on-one relationship between a customer and an agent is the best way to provide unparalleled service and products," said Feinstein. "The network of independent agents already established by Zurich Personal Insurance reduces the need to recruit and train and is a marketing and growth opportunity that was not practical before the merger," he said.

For the existing Zurich Personal Insurance customers in these 12 states, the transition will be seamless. "The goal is to make the transition as easy as possible for customers," said Feinstein.

Customers in the expansion states will be served out of the Baltimore headquarters of the former Zurich Personal Insurance, which is now one of 12 Farmers Service Centers throughout the country.