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Farmers Insurance Lays Off 2,400 Workers In Latest Insurance Company Flight From California

With no help from the state, and economic and climate situations not improving, Farmers announced the layoffs

By Evan Symon, August 29, 2023 6:57 pm

Farmers Insurance Group, the Los Angeles-based insurer group of vehicles, homes and small businesses, announced this week that they will be laying off 2,400 workers, largely because of large increases in construction and reconstruction costs, inflation, and a largely increased risk of danger because of more wildfires and other natural disasters.

In the past three months, 5 insurance companies operating in California have either stopped accepting all new homeowner insurance applications or put severe limits on how many new applications can be accepted in a year. State Farm became the first company in May to no longer accept new applications for any kind of insurance other than personal vehicle insurance. In June, Allstate made a similar announcement, saying that they had already not accepting new applications all year. Farmers was the next to announce last month, reducing the overall number of new monthly policies that they would accept.

Earlier this month the most recent insurance companies to announce that they would be ending homeowners policies, AmGuard and Falls Lake, only further limited the insurance options for homeowners. This is all on top of several insurance companies, such as AIG, leaving the California homeowners insurance market in the past few years.

While Senate Republicans and other groups in Sacramento have pushed for Gavin Newsom, the Legislature, and Insurance Commissioner Ricardo Lara to confront the problem head on, little has been done. While many insurance-related bills were also passed last year, when the problem became much more noticeable, most had to do with either consumer protections or health insurance. With no help from the state, and economic and climate situations not improving, Farmers announced that they will be laying off 2,400 workers, or approximately 11% of their total current workforce.

In a layoff announcement on Monday, President and CEO of Farmers Raul Vargas said that “Given the existing conditions of the insurance industry and the impact they are having on our business, we need to take decisive actions today to better position Farmers for future success. As our industry continues to face macroeconomic challenges, we must carefully manage risk and prudently align our costs with our strategic plans for sustainable profitability.”

For many, the decision by Farmers seems to be a preemptive move. While companies like State Farm lost more than $2 billion in the first quarter of 2023 because of huge losses in home and car insurance, Farmers only lost $150 million and is substantially in a better position. Despite this, market forces and the increasingly dire situation for insurance companies in California continued to take their toll.

“Farmers and other insurance companies are in no-win situations right now in California,” said Trevor Connery, a lobbyist who has worked for insurance companies in the past. “Weather, like wildfires and flooding, continue to wreck the state. The state has been putting in a lot of measures to lessen their chances and minimize their impact, but it is still a lot. People continue to need insurance. It’s not required by law, but pretty much every bank or loaner will want it as a term for the loan. And costs of everything are going up. What can you really do?

“2,400 people lost their jobs, so I hope this is the wake up call needed for the state to actually do something substantial. But they didn’t when companies pulled out earlier this year, so like many in the insurance industry, we’re not holding our breath here.”

As of Monday evening, it is currently unknown if other major insurance companies are planning similar layoffs in California because of the growing insurance crisis.

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Evan Symon
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6 thoughts on “Farmers Insurance Lays Off 2,400 Workers In Latest Insurance Company Flight From California

  1. Sacramento, San Francisco, Los Angeles and San Diego all strategically forced to become literal fecal holes yet Newsom and the commie legislators of Cali are allowed to continue their rampage of destruction against the state, it’s legacy citizens and their holdings including but not limited to the sanctity of human life to include assaults against children.

    The extension of this is the result of surgically implemented attacks against each and every privately owned holding from your home to instruments of mobility until we’re fully contrite, exhausted and fatigued.

    For those of us who own RE in Cali this move by State Farm and other insurers represents an insidious attack on the private sector’s holdings and for most their most valuable asset. Given the deterioration of civility the operatives have cultivated it is no wonder State Farm and others are retreating from indemnifying property in California.

    1. Very well said “No Reluctance”. The loss of so many willing insurers in California does not bode well for economic growth or even economic stability. Coupled with the other tyrannical legislation that Sacramento imposes on its citizens one cannot help but question what the long game is. AG Rob Bonta’s lawsuit against the Chino Valley school district does not make political sense as a representative or a re-election motive. Somebody or organizations must have their back for them to so blatantly snub their own citizens. Soros of course comes to mind and it looks like things are ratcheting up nationwide, there are so many inexplicable legal actions taking place and grabbing the headlines. I’ve even wondered if the headline splash world wide isn’t actually the real motive. Is it an intentional character assassination of the USA and other western nations to foment disdain of our societies? A new world order objective aligns with theirs and other states’ actions but I admit to being a part time conspiracy theorist too.

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