AGENCY ACQUISITION PROGRAM

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AGENCY ACQUISITIONS PROGRAMThe Agency Acquisitions program provides lucrative financial incentives to capitalized external candidates to facilitate the purchase of service and commission rights from existing Farmers agencies with less than 1,000 policies in force.

The Candidate�� Proven background in building and managing a business venture

�� The desire to build and grown an existing business

�� Decisions made with ROI and cash flow in mind

Self-Motivation and Independence�� Effective time-management skills and self-reliance to accomplish goals

�� The ability to identify and focus on priorities

Communication Skills �� The ability to inspire as well as listen and learn from others

�� Leadership and people management skills

Performance �� The motivation to work hard and take risks to achieve financial success

�� Willing and able to make investments into business opportunities for future gain

�� The willingness to accept responsibility for personal success and failures

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The ProcessAssets

�� Minimum of $25,000 in seasoned investable assets in addition to the cost of acquisition

Licensing and Training�� Property and Casualty, Life and Health and Approved U4 required prior to agent appointment

�� Training Milestones and Assessments

Background Check�� Satisfactory results of background check

Business Plan�� Approval of 5-year business plan and cash flow projection

Branded Office Location�� Office location fully equipped and compliant with Farmers SMART Office standards within 120 days

Agency Staff�� Minimum of 1 licensed and appointed agency staff member

The Benefits Economic Interest

�� Contract Value according to the terms of the appointment agreement vested 20% per year for 5 years

Office Start-Up Program�� Up to $10,000 bonus for office startup expenses

Monthly New Business Premium Bonus�� Bonus % paid on monthly new business Agent Eligible Premium

�� Bonus % schedule a function of Bonus Eligibility Period

�� All agents start at Tier C bonus level for first quarter and then tiers are determined by prior quarter performance

�� Monthly bonuses paid on Life and Commercial premiums subject to caps

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Why Become a Farmers Agency Owner?

Support As a Farmers agency owner, you will enjoy:

�� Support from a District Manager and/or business consultant invested in your success

�� Comprehensive training and business development support

�� Financial bonus opportunities

�� Lead generation & agency start-up cost support*

�� Loan options through Farmers Insurance Group Federal Credit Union

�� An option to participate in a deferred compensation plan

�� Benefits for you, your family and your staff

�� The ability to open multiple office locations

�� The ability to sell your service & commission rights

�� An opportunity to buy service & commission rights from another agent

*Applicable to certain programs only.

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Product Portfolio

Outstanding product suite that allows you to compete and succeed

Property & Casualty Insurance

LifeInsurance

FinancialProducts1

�� Auto

�� Home/Renters

�� Umbrella

�� Small Business:�– Commercial P&C

�– Business Auto

�– Workers’ Comp

�� Boat

�� Motorcycle

�� Motor Home

�� Mobile Home

�� 529 Plans

�� 401(k)s

�� Variable Annuities

�� IRAs

�� SEPs

�� Variable Universal Life

�� Mutual Funds with nationally recognized fund families

�� Term Life

�� Universal Life

�� Whole Life

�� Critical Illness Riders

�� AD&D

�� Disability Income Riders

�� Group Life

�� Fixed Annuities

1 Securities offered through Farmers Financial Solutions, LLC – Member FINRA & SIPC Note: All products and features may not be available in all states and may vary by state

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Business Development Support – Outplacement

Ability to refer business not eligible/acceptable to Farmers to Kraft Lake Insurance Agency, Inc.

Accessible through web portals, email, and toll free phone numbers.

ProfessionalLiability (E&O)

High ValueHomeowners

E&S Vacant Building/Land

…and more

Farm & Ranch

Contractor’s General Liability

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In addition, agents have the ability to sell all or any part of their Service & Commission Rights to an approved buyer, provided the purchaser is approved by Farmers*.

Financial Support – Contract Provisions

A Farmers agency has significant value

When an agent contract ends, Contract Value payments may be made to the agent. Contract Value is calculated based on the two following factors:

�� The amount of service commissions paid to the agent on specified policies during the 12 months prior to the termination of the appointment

�� The number of specified policies assigned to the agent

Number of Specified Policies: Percent of Applicable Service Commissions:

%005 woleB

%52057– 05

%05005,1– 157

%57000,2– 105,1

%001000,2 revO

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*Seed Program candidates do not have the ability to sell for 5 years.

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Financial Support – Performance Bonuses

Acquisition Program

Financial support that rewards your performance – Acquisition with Bonus

�� Tiered bonus system based on cumulative, applicable policies in force or applicable new gross folio premium generated

�� Duration of financial support determined upon amount of policies purchased

�� Performance in the prior quarter determines the next quarter’s bonus tier (from Q2 onward; in Q1 all agents start as a tier C)

�� Performance based bonuses are paid out monthly

�� Monthly bonuses for commercial and life insurance are subject to capping

0

1,000

2,000

3,000

4,000Policies In Force (#)

Bonus tier

B

C

A

01,0002,0003,0004,0005,0006,000

Gross Folio Premium ($ tsd.)

Bonus tier

B

C

AOR

Note: Policies in force and gross folio premium requirements as well as bonus percentages shown areillustrative, subject to change and adjusted based on local market environment. Additionally, there are separaterequirements for P&C and Life.

Monthly Eligible Premium Bonus Percentage by Tier

Tier Y1-Q1 Y1-Q2 Y1-Q3 Y1-Q4 Y2-Q1 Y2-Q2 Y2-Q3 Y2-Q4 Y3-Q1 Y3-Q2 Y3-Q3 Y3-Q4

A 31.5% 32.0% 29.5% 27.0% 24.5% 22.0% 19.5% 17.0% 14.5% 12.0% 9.5% 7.0%

B 31.5% 30.5% 28.0% 25.5% 23.0% 20.5% 18.0% 15.5% 13.0% 10.5% 8.0% 5.5%

C 31.5% 29.0% 26.5% 24.0% 21.5% 19.0% 16.5% 14.0% 11.5% 9.0% 6.5% 4.0%

Monthly Premium Bonus Caps

Year 1 Year 2 Year 3

LIFE

Monthly $1,000 $750 $500

COMMERCIAL

Monthly $2,500 $2,000 $1,500

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Business Development Support – Sales Tools

Outstanding sales insights and management support tools

Lead Management enables you to:�� Manage your leads and cross-selling opportunities

�� Launch automated sequential marketing programs (SMP)

�� Write new business with access to a lead database

Sales Management provides you with:�� Real-time analytics for managing lead source

effectiveness and setting and tracking goals

�� Visibility into your sales pipeline

Financial Management gives you:�� The ability to analyze staff and

compensation strategies

�� Evaluations of investment opportunities with what-if scenarios

SIMS Examples

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Business Development Support – Start-up

Access to agency start-up support services

LoanSupport

PayrollSupport

O�ceSupport

LicensingSupport

Access to discounted

licensing courses:

P&C, Life, Series 6/63

Access to discounted

o�ce furniture,

technology, branding,

and art

Access to discounted

payroll set up and

processing services

Loan support from Farmers

Insurance Group

Federal Credit Union

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Financial Support – Benefits

Access to Group Life and Comprehensive Medical plans for you, your family and your staff

Voluntary Hospital Plan

Dental

Vision Service Plan

Life/ AD&D, Supplemental AD&D

Critical Illness Insurance Plan

Long Term Disability

Enhanced Long Term Disability

Business Overhead Expense

Errors and Omissions

Fidelity Bond

Medical

Deferred Compensation Plan

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Other Support & Options

After hour call center

Cross border licensing

Satelliteo�ces

Agency Acquisition

Option

Ability for existing customers to make policy changes and make payments over the phone after normal agency hours

Dual agent appointment to enable writing business in other states, subject to approval

Ability to set up additional office locations to increase market penetration, subject to approval

Ability to purchase service and commission rights from another Farmers agent, subject to approval

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To Become a Farmers Agency Owner

�� Interviews

�� Background check

�� Available assets verification

�� Approved business plan & cash flow projection

�� Final candidate review

Agency Development

BaseTraining

Licensing

Recruiting

�� Property & Casualty insurance license

�� Life & Health insurance license

�� Comprehensive online & instructor-led training courses

�� Pass assessment tests

�� FFS approval of Form U4

�� Approved business plan

�� Office set up with applicable licensed staff requirements

Access to incentive-based financial bonuses�– Lead generation (Retail only)�– Office start-up bonuses in year one�– Monthly bonus up to three years (Retail and Acquisition)�– Annual financial bonuses for three years after appointment (Retail only)�– Additional bonuses available throughout your agency ownership

�� Securities licensed and FFS approved to sell to be obtained within twelve months after appointment

�� Ability to sell your service & commission rights

�� Opportunity to acquire additional service & commission rights

Visit www.BeAFarmersAgent.com

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Visit www.BeAFarmersAgent.com

To Become a Farmers Agency Owner

To schedule a time to meet, please contact:

Taylor Carpenter District Recruiting Manager

taylor.norton1@farmersagency.com

Office of Nickolas Orton 6436 E. Broadway Blvd Tucson, AZ 85710 (520)-777-8786