How Farmers Got Its Start

Farmers Insurance Group of Companies is the third-largest insurance group in the United States. Operating in 41 states with more than 10 million families as customers, Farmers provides home, auto, and life insurance as well as personal financial services. The company’s headquarters is located in Los Angeles and it is a wholly owned subsidiary of Zurich Financial Services. The company has more than 20,000 employees.

Company Background

John Tyler and Thomas Leavey founded what is known today as the Farmers Insurance Group of Companies in 1928. The business partners, who each grew up in rural environments, saw that farmers and ranchers were an underappreciated segment of the population. Tyler grew up in South Dakota and was the son of an insurance salesman; Leavey had worked for the Federal Farm Loan Bureau. Both men wanted to provide preferable rates and services to rural customers. They sought to form their own insurance company – called Farmers Automobile Inter-Insurance Exchange – to cater to this specialized market. Within two years of business, Farmers had issued 40,000 policies and had proved that its targeted marketing was working. The staff had increased from four people in 1928 to 46, plus an additional 700 agents. By 1931, Farmers was operating in nine states and by 1932, the company’s overall assets were estimated at $1.08 million. During the 1930s, Farmers survived through the Depression and catastrophic earthquakes in California by practicing smart money-management and customer service. The company continued to grow and expand, even during trying times for the insurance industry, and today is the third-largest insurance group in the United States.

Company Landmarks

• 1922: John Tyler and Thomas Leavey, the eventual founders of the company, meet.
• 1927: Tyler and Leavey get a loan from the founder of Bank of America to start their insurance company, Farmers Automobile Inter-Insurance Exchange in Los Angeles.
• 1928: Tyler and Leavey hire a sales manager and a secretary, and form the company. The company’s first customer, Charles Brisco, insured a 1925 Cadillac Phaeton.
• 1935: Farmers launched a reciprocal company, Truck Insurance Exchange, which specialized in truck insurance.
• 1942: Farmers launched another reciprocal company, Fire Insurance Exchange.
• 1950: Mid-Century Insurance Company, which offered insurance for inland marine robbery, felony and burglary, among other issues, became a subsidiary of the Farmers Insurance Exchange.
• 1953: Farmers acquired New World Life Insurance Company.
• 1973: John Tyler died at age 86. Thomas Leavey takes over as CEO.
• 1978: Thomas Leavey retired.
• 1988: BATUS, Incorporated acquired Farmers Group for $5.2 billion. At the time it was acquired, Farmers was the seventh-largest property insurer and the third-largest auto insurer in the United States.
• 1995: Farmers created three distinctive business units for personal insurance, commercial insurance and life insurance. The decision arose after the insurance industry was struggling to recover from catastrophic earthquakes and fires in California in 1989, 1991 and 1994.
• 1998: A merger changed B.A.T Industries into Zurich Financial Services Group.
• 2000: Farmers Insurance acquired Foremost Corporation of America, which specialized in insuring manufactured homes and recreational vehicles. Later that year, Farmers Financial Solutions begins to provide mutual funds.
• 2007: Farmers Insurance acquired non-standard auto insurance provider Bristol West Holdings. Non-standard insurance is often used by consumers who have poor driving records.
• 2009: Farmers Insurance Group announced its intention to acquire AIG Auto Insurance for $1.9 billion.