# Farmers Insurance Group
**Farmers Insurance Group** is a United States property and casualty insurance organization whose underwriting entities, the Farmers Exchanges, are owned by their own policyholders and managed under contract by Farmers Group, Inc., a wholly owned subsidiary of the Swiss insurer [Zurich Insurance Group](https://www.edgepedia.org/zurich-insurance-group).[1](https://www.insurance.ca.gov/0250-insurers/0300-insurers/0400-reports-examination/upload/Farmers-Insurance-Group-Consolidated-Exam-Report-Final-as-of-12-2021-ADA.pdf) The Exchanges wrote $28.4 billion of gross premiums in 2024 across roughly 12.8 million policies, and the group ranked ninth among US property/casualty groups with a 2.65% countrywide market share in the NAIC's most recent countrywide tally.[2](https://filecache.investorroom.com/mr5ir_farmers/321/2024%20MDA%20-%20FIE.PDF) • [3](https://content.naic.org/sites/default/files/publication-msr-pb-property-casualty.pdf)
| Key fact | Detail |
|---|---|
| Ownership | The three Farmers Exchanges are reciprocal insurers owned by their policyholders; Zurich owns no interest in them and profits only through Farmers Group, Inc., its attorney-in-fact subsidiary[1](https://www.insurance.ca.gov/0250-insurers/0300-insurers/0400-reports-examination/upload/Farmers-Insurance-Group-Consolidated-Exam-Report-Final-as-of-12-2021-ADA.pdf) • [4](https://www.zurich.com/-/media-assets/project/zurich/dotcom/investor-relations/docs/financial-reports/2025/annual-report-2025-en.pdf) |
| Size | $28.4 billion gross written premiums and about 12.8 million policies in 2024; ninth-largest US P&C group at 2.65% market share[2](https://filecache.investorroom.com/mr5ir_farmers/321/2024%20MDA%20-%20FIE.PDF) • [3](https://content.naic.org/sites/default/files/publication-msr-pb-property-casualty.pdf) |
| 2023 shock | $1,284.5 million underwriting loss and a 106.3% combined ratio, driven by Home, Auto, and Specialty books[5](https://filecache.investorroom.com/mr5ir_farmers/295/2023%20MDA%20-%20FIE.pdf) |
| 2024 turnaround | Combined ratio improved 16.3 points to 90.0%[2](https://filecache.investorroom.com/mr5ir_farmers/321/2024%20MDA%20-%20FIE.PDF) |
| 2025 record | Record business operating profit of USD 2.4 billion for Zurich's Farmers business; combined ratio 84.6%; first net policy growth in 10 years (more than 150,000)[4](https://www.zurich.com/-/media-assets/project/zurich/dotcom/investor-relations/docs/financial-reports/2025/annual-report-2025-en.pdf) |
| Ratings | AM Best FSR A (Excellent), affirmed[6](https://news.ambest.com/newscontent.aspx?refnum=250550) |
| Geographic retreat and return | Exited Florida in 2023, capped California new home policies[1](https://www.insurance.ca.gov/0250-insurers/0300-insurers/0400-reports-examination/upload/Farmers-Insurance-Group-Consolidated-Exam-Report-Final-as-of-12-2021-ADA.pdf) • [13](https://www.liveinsurancenews.com/farmers-insurance-is-rebuilding/8570566/), then in 2026 removed the cap and filed a 6.99% rate increase with marketing to 300,000 wildfire-distressed consumers[7](https://www.liveinsurancenews.com/california-farmers-ins-news/8573967/) |
## History
Farmers was sold in 1988 for $6.2 billion to the British conglomerate B.A.T. Industries Plc, which became sole stockholder of the company's 68 million common shares in December of that year.[8](https://labusinessjournal.com/news/farmers-became-industry-giant-with-roots-planted/) • [9](https://www.encyclopedia.com/books/politics-and-business-magazines/farmers-insurance-group-companies) In 1997 B.A.T. and Zurich Insurance Company initiated a merger creating Zurich Financial Services Group.[9](https://www.encyclopedia.com/books/politics-and-business-magazines/farmers-insurance-group-companies) Farmers Group, Inc. is described in the company's own 2009 announcement as wholly owned by the Zurich Financial Services Group.[10](https://newsroom.farmers.com/2009-07-01-Farmers-Insurance-Acquisition-of-21st-Century-Insurance-Finalized)
Catastrophes shaped the company's modern history. The 1989 San Francisco (Loma Prieta) earthquake, the 1991 Oakland fire, and the 1994 Northridge earthquake posed major financial challenges; one account puts Farmers' eventual Northridge claims payout at $2.2 billion, while another estimates record Northridge losses at $1.3 billion in 1995.[8](https://labusinessjournal.com/news/farmers-became-industry-giant-with-roots-planted/) • [9](https://www.encyclopedia.com/books/politics-and-business-magazines/farmers-insurance-group-companies) Farmers also faced billions of dollars in underwriting losses in Texas from mold-damage claims.[8](https://labusinessjournal.com/news/farmers-became-industry-giant-with-roots-planted/) In 2009 Farmers completed its acquisition of 21st Century Insurance.[10](https://newsroom.farmers.com/2009-07-01-Farmers-Insurance-Acquisition-of-21st-Century-Insurance-Finalized)
## Corporate structure and ownership
The Farmers Exchanges are three separate reciprocal insurers: Farmers Insurance Exchange, Fire Insurance Exchange, and Truck Insurance Exchange, organized under California Insurance Code Section 1300 et seq.[1](https://www.insurance.ca.gov/0250-insurers/0300-insurers/0400-reports-examination/upload/Farmers-Insurance-Group-Consolidated-Exam-Report-Final-as-of-12-2021-ADA.pdf) A reciprocal exchange in its pure form is a web of contractual relationships between subscribers who agree to insure one another, consummated through a common agent holding power of attorney; legal scholarship notes that no legal entity is contemplated in the definition, and reciprocals have been described as an unincorporated association, a "trust for a purpose," a quasi-corporation, and "more than a partnership and something less than an insurance corporation."[11](https://law-journals-books.vlex.com/vid/enterprise-without-entities-698379185)
**Who owns what.** Zurich has no ownership interest in the Exchanges, which are owned by their policyholders.[4](https://www.zurich.com/-/media-assets/project/zurich/dotcom/investor-relations/docs/financial-reports/2025/annual-report-2025-en.pdf) Farmers Group, Inc. (FGI), a wholly owned US subsidiary of Zurich Insurance Group Ltd, serves as attorney-in-fact for the Exchanges through the Farmers Underwriters Association, Fire Underwriters Association, and Truck Underwriters Association, providing non-claims and ancillary services for fees.[1](https://www.insurance.ca.gov/0250-insurers/0300-insurers/0400-reports-examination/upload/Farmers-Insurance-Group-Consolidated-Exam-Report-Final-as-of-12-2021-ADA.pdf) • [4](https://www.zurich.com/-/media-assets/project/zurich/dotcom/investor-relations/docs/financial-reports/2025/annual-report-2025-en.pdf) AM Best describes the arrangement as giving Zurich "a consistent stream of income through management fees" while the underwriting risk stays with the policyholder-owned members.[6](https://news.ambest.com/newscontent.aspx?refnum=250550) The Los Angeles Business Journal reports the fee as 12 percent of premiums, taken off the top to cover the exchanges' overhead and personnel.[8](https://labusinessjournal.com/news/farmers-became-industry-giant-with-roots-planted/)
The financial results split accordingly. In 2025 Farmers posted its strongest-ever business operating profit of USD 2.4 billion, with Farmers Management Services contributing a record USD 2.2 billion, up 4 percent, while the Exchanges themselves achieved an 84.6 percent combined ratio.[4](https://www.zurich.com/-/media-assets/project/zurich/dotcom/investor-relations/docs/financial-reports/2025/annual-report-2025-en.pdf) The Exchanges also own operating companies of their own; for example, Farmers Insurance Exchange holds 70% of FICO, a Kansas-domiciled property and casualty company, with Truck Insurance Exchange holding 20%.[12](https://insurance.ks.gov/department/LegalIssues/orders/2008/farmersinsexch.pdf)
## Products and distribution
Farmers is a multi-channel and multi-product provider whose core business is personal lines. It distributes through exclusive agents, independent agents, and direct channels including online sales, call centers, an employer direct model, and embedded partners.[2](https://filecache.investorroom.com/mr5ir_farmers/321/2024%20MDA%20-%20FIE.PDF) It operates in all 50 states, with California, Texas, and Washington together accounting for over 45.0% of total direct premiums written in the 2024 filing.[2](https://filecache.investorroom.com/mr5ir_farmers/321/2024%20MDA%20-%20FIE.PDF) Homeowners insurance is available in approximately 40 states, and not in Washington D.C., Alaska, Delaware, Florida, Hawaii, Maine, New Hampshire, Rhode Island, South Carolina, Vermont, or [West Virginia](https://www.edgepedia.org/west-virginia).[13](https://www.liveinsurancenews.com/farmers-insurance-is-rebuilding/8570566/)
## By the numbers
Gross written premiums were $27.4 billion in 2023 with about 13.9 million policies, and $28.4 billion in 2024 with about 12.8 million policies, so premium growth came alongside a shrinking policy count.[5](https://filecache.investorroom.com/mr5ir_farmers/295/2023%20MDA%20-%20FIE.pdf) • [2](https://filecache.investorroom.com/mr5ir_farmers/321/2024%20MDA%20-%20FIE.PDF) Rank depends on the measure: per AM Best on 2022 direct written premiums Farmers was the sixth-largest P&C all-lines organization in its core 29 operating states with a 4.2% share; per S&P Global Market Intelligence on 2023 direct written premiums it was the seventh-largest US personal lines P&C group; and in NAIC countrywide data it ranked ninth among all US P&C groups with $29,586,855 thousand in direct premiums written and a 2.65% share.[5](https://filecache.investorroom.com/mr5ir_farmers/295/2023%20MDA%20-%20FIE.pdf) • [2](https://filecache.investorroom.com/mr5ir_farmers/321/2024%20MDA%20-%20FIE.PDF) • [3](https://content.naic.org/sites/default/files/publication-msr-pb-property-casualty.pdf) In auto insurance specifically, Farmers ranks sixth with a 3.57% market share and $13.3 billion in direct premiums earned.[14](https://www.carinsurance.com/largest-auto-insurance-companies/)
The underwriting swing since 2022 is the group's defining recent number. The combined ratio was 106.2% in 2022 and 106.3% in 2023, with underwriting losses of $1,196.9 million and $1,284.5 million respectively, driven primarily by the Home, Auto, and Specialty books and relatively higher catastrophe losses.[5](https://filecache.investorroom.com/mr5ir_farmers/295/2023%20MDA%20-%20FIE.pdf) In 2024 the combined ratio fell 16.3 points to 90.0%, driven by rate actions, moderating cost trends, and improved expense management.[2](https://filecache.investorroom.com/mr5ir_farmers/321/2024%20MDA%20-%20FIE.PDF) In 2025 the combined ratio reached 84.6%.[4](https://www.zurich.com/-/media-assets/project/zurich/dotcom/investor-relations/docs/financial-reports/2025/annual-report-2025-en.pdf)
**Financial strength.** AM Best affirmed the Financial Strength Rating of A (Excellent).[6](https://news.ambest.com/newscontent.aspx?refnum=250550) AM Best's offsetting concerns are high exposure to catastrophe losses and reliance on almost $2 billion of surplus notes, including USD 150 million 7.2% notes due 2048 (USD 138.5 million outstanding), USD 335 million 6.151% notes due 2053, and senior notes due 2028 of USD 375.0 million outstanding.[6](https://news.ambest.com/newscontent.aspx?refnum=250550) • [15](https://news.ambest.com/PR/PressContent.aspx?altsrc=2&refnum=36299)
## How it compares with State Farm, Allstate, and direct insurers
In NAIC countrywide data, Farmers' 2.65% share places it behind [State Farm](https://www.edgepedia.org/state-farm) (10.33%).[3](https://content.naic.org/sites/default/files/publication-msr-pb-property-casualty.pdf) Farmers' own MD&A classifies its major competitors as multiple-lines exclusive agency companies such as State Farm, Allstate, and American Family, along with national carriers with similar models such as Nationwide, Liberty Mutual, Berkshire Hathaway, and Progressive.[2](https://filecache.investorroom.com/mr5ir_farmers/321/2024%20MDA%20-%20FIE.PDF) On price, among large carriers in one consumer rate dataset Farmers is the most expensive for full auto coverage at $3,207 a year, about 24% above the national average.[14](https://www.carinsurance.com/largest-auto-insurance-companies/)
## Recent developments
The 2023 underwriting loss triggered retrenchment. In August 2023, Farmers Group CEO Raul Vargas announced the elimination of roughly 2,400 employees, about 11% of the workforce.[13](https://www.liveinsurancenews.com/farmers-insurance-is-rebuilding/8570566/) On July 10, 2023, Farmers Insurance Exchange and Truck Insurance Exchange notified the Florida Office of Insurance Regulation that they would discontinue Farmers-branded policies and non-renew existing ones, citing the state's litigation environment and hurricane exposure; the company has not signaled plans to return.[1](https://www.insurance.ca.gov/0250-insurers/0300-insurers/0400-reports-examination/upload/Farmers-Insurance-Group-Consolidated-Exam-Report-Final-as-of-12-2021-ADA.pdf) • [13](https://www.liveinsurancenews.com/farmers-insurance-is-rebuilding/8570566/) In California, effective July 2, 2023, FIE, Fire, and Mid-Century limited new business to a maximum of 7,000 home policies per month, and in August 2023 the companies received rate increases averaging 9.7% for private passenger automobile and 12.5% for homeowners.[1](https://www.insurance.ca.gov/0250-insurers/0300-insurers/0400-reports-examination/upload/Farmers-Insurance-Group-Consolidated-Exam-Report-Final-as-of-12-2021-ADA.pdf)
**Reversal, 2025 to 2026.** Farmers in November 2025 announced it would lift its self-imposed cap of 9,500 new California homeowner policies per month (itself raised from the original 7,000).[13](https://www.liveinsurancenews.com/farmers-insurance-is-rebuilding/8570566/) On May 12, 2026, the California Department of Insurance formally approved the new rate filings under Commissioner Ricardo Lara's Sustainable Insurance Strategy; the filing requests a 6.99 percent average statewide rate increase, the cap on new homeowners policies was eliminated effective immediately, and Farmers committed to marketing to approximately 300,000 consumers in wildfire-distressed areas who currently hold FAIR Plan policies or no coverage.[7](https://www.liveinsurancenews.com/california-farmers-ins-news/8573967/) The context is a recovering market: the California FAIR Plan added about 16,000 residential policies in Q1 2026 (about 2.4% quarterly growth), a sharp decline from the 35,000 to 50,000 policies per quarter added from 2024 through September 2025.[16](https://www.insurance.ca.gov/0400-news/0102-alerts/2026/California-s-second-largest-home-insurer.cfm) In 2025 the Exchanges delivered their first net policy increase in 10 years, more than 150,000 policies.[4](https://www.zurich.com/-/media-assets/project/zurich/dotcom/investor-relations/docs/financial-reports/2025/annual-report-2025-en.pdf)
## References
1. [Farmers Insurance Group Consolidated 2021 Exam Report, California Department of Insurance](https://www.insurance.ca.gov/0250-insurers/0300-insurers/0400-reports-examination/upload/Farmers-Insurance-Group-Consolidated-Exam-Report-Final-as-of-12-2021-ADA.pdf)
2. [Farmers Insurance Exchange 2024 Management's Discussion and Analysis](https://filecache.investorroom.com/mr5ir_farmers/321/2024%20MDA%20-%20FIE.PDF)
3. [2025 Market Share Reports for Property/Casualty Groups and Companies, NAIC](https://content.naic.org/sites/default/files/publication-msr-pb-property-casualty.pdf)
4. [Zurich Insurance Group Annual Report 2025](https://www.zurich.com/-/media-assets/project/zurich/dotcom/investor-relations/docs/financial-reports/2025/annual-report-2025-en.pdf)
5. [Farmers Insurance Exchange 2023 Management's Discussion and Analysis](https://filecache.investorroom.com/mr5ir_farmers/295/2023%20MDA%20-%20FIE.pdf)
6. [AM Best Affirms Credit Ratings of Members of Farmers Insurance Group](https://news.ambest.com/newscontent.aspx?refnum=250550)
7. [After 3 Years of Carriers Running From California, Farmers Insurance Just Ran the Other Direction, Live Insurance News](https://www.liveinsurancenews.com/california-farmers-ins-news/8573967/)
8. [Farmers Became Industry Giant With Roots Planted Deep in L.A., Los Angeles Business Journal](https://labusinessjournal.com/news/farmers-became-industry-giant-with-roots-planted/)
9. [Farmers Insurance Group of Companies, Encyclopedia.com company history](https://www.encyclopedia.com/books/politics-and-business-magazines/farmers-insurance-group-companies)
10. [Farmers Insurance Acquisition of 21st Century Insurance Finalized, Farmers newsroom (July 1, 2009)](https://newsroom.farmers.com/2009-07-01-Farmers-Insurance-Acquisition-of-21st-Century-Insurance-Finalized)
11. [Enterprise Without Entities, law journal article (vLex)](https://law-journals-books.vlex.com/vid/enterprise-without-entities-698379185)
12. [Order before the Commissioner of Insurance of the State of Kansas (2008)](https://insurance.ks.gov/department/LegalIssues/orders/2008/farmersinsexch.pdf)
13. [Farmers Insurance Is Rebuilding After Years of Cuts, Live Insurance News](https://www.liveinsurancenews.com/farmers-insurance-is-rebuilding/8570566/)
14. [Largest auto insurance companies in the U.S., CarInsurance.com](https://www.carinsurance.com/largest-auto-insurance-companies/)
15. [AM Best Affirms Credit Ratings of Members of Farmers Insurance Group (surplus note detail)](https://news.ambest.com/PR/PressContent.aspx?altsrc=2&refnum=36299)
16. [California's second largest home insurer joins Sustainable Insurance Strategy, California Department of Insurance](https://www.insurance.ca.gov/0400-news/0102-alerts/2026/California-s-second-largest-home-insurer.cfm)
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*Topic: Encyclopedia › Society and history › Economics and business › Finance › Insurance*
*Initially written Sep 17, 2026 · Reviewed: Oct 10, 2026 · Edited: Oct 10, 2026; Oct 11, 2026; Oct 15, 2026; Oct 21, 2026 · Last review: Oct 10, 2026*
*Copyright 2026 EdgeChat AI, a subsidiary of Biostate AI.*
License: Edgepedia Community License 1.0, https://www.edgepedia.org/edgepedia/license