https://www.wsj.com/finance/state-farms-ai-plan-for-sales-agents-sparks-uproar-a-real-slap-in-the-face-6453e2cb?mod=Searchresults&pos=1&page=1 (paywalled)

The CEO of State Farm just announced he is tearing up all contracts with agents effective end of year 2027. After that, contracts will have lower compensation and increased sales targets. Gross annual income is expected to drop as much as 40%.

"... ends a valuable deferred compensation program, axes health benefits and changes commissions on several types of policy, according to agents and company documents reviewed by the Journal. Agents who don't meet certain new sales targets for two years in a row will be paid lower commissions..."

State Farm will increasingly use AI to take over agent duties, including auto losses, household needs analysis, and product recommendation.

In short, agents are not worth current costs and other companies' (Progressive) lower costs reduces State Farm's competitiveness. Needless to say. 19,000 agents and their employees are unhappy.

FTR, my first jobs out of school were as a Sales Engineer.

I've had many insurance agents and most were not very good. I can see why many, especially younger buyers, prefer online / AI and not talking to a person. Personal selling is another place where AI will thin the herd.

Queso1 said:

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Nah. The rates will stay the same.

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Probably.

I don't think your rates are going to go down. It is totally agreed that many agents and adjusters aren't good. However, I can get a good claim force approved from a bad agent by going through the proper channels and legal avenues.

If that is replaced with AI, then those claims eventually may have hard set rules and without a person to appeal to, it simply won't go paid. If there is a person, I cannot imagine the heirarchy structure and time commitment it will require by contractors and owners to actually get to a person to even request such a thing and if you do, the process may take well longer than it did before.

We'll have to see how it goes, but reduction in your insurance is almost guaranteed not to be a thing. Typically, what I see with AI is simply a reduction in quality of services, which, with insurance, is hard to imagine.

I like my state farm agent. she has been very good with us.

"Hi AI, make all the changes you need to lower my costs and increase revenues, I'll trust whatever you do" - State Farm CEO

Jason_Roofer said:

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I don't think your rates are going to go down. It is totally agreed that many agents and adjusters aren't good. However, I can get a good claim force approved from a bad agent by going through the proper channels and legal avenues.

If that is replaced with AI, then those claims eventually may have hard set rules and without a person to appeal to, it simply won't go paid. If there is a person, I cannot imagine the heirarchy structure and time commitment it will require by contractors and owners to actually get to a person to even request such a thing and if you do, the process may take well longer than it did before.

We'll have to see how it goes, but reduction in your insurance is almost guaranteed not to be a thing. Typically, what I see with AI is simply a reduction in quality of services, which, with insurance, is hard to imagine.

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It's kind of that way already.

I used to be loyal to my SF agent, because we had a relationship. But things changed, and I could never get in touch with him when I needed. I'd have to deal with a Customer Service Rep from an 800 number...who didnt know me, and had zero interest in trying to actually help me with an issue.

So, I left them and now just shop around for the lowest rates.

All that to say, I'm not sure what the difference will be for most consumers. Whether it's Ai or some random CSR, they'll all be operating from the same script.

Jason_Roofer said:

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I don't think your rates are going to go down. It is totally agreed that many agents and adjusters aren't good. However, I can get a good claim force approved from a bad agent by going through the proper channels and legal avenues.

If that is replaced with AI, then those claims eventually may have hard set rules and without a person to appeal to, it simply won't go paid. If there is a person, I cannot imagine the heirarchy structure and time commitment it will require by contractors and owners to actually get to a person to even request such a thing and if you do, the process may take well longer than it did before.

We'll have to see how it goes, but reduction in your insurance is almost guaranteed not to be a thing. Typically, what I see with AI is simply a reduction in quality of services, which, with insurance, is hard to imagine.

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I want to see AI climb up on my roof after a hail storm...

A low level employee will climb on the roof, record it with a camera, submit it to the AI image processor and AI will make the damage assessment. And it will do it faster, better and more consistently than humans.

txags92 said:

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Jason_Roofer said:

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I don't think your rates are going to go down. It is totally agreed that many agents and adjusters aren't good. However, I can get a good claim force approved from a bad agent by going through the proper channels and legal avenues.

If that is replaced with AI, then those claims eventually may have hard set rules and without a person to appeal to, it simply won't go paid. If there is a person, I cannot imagine the heirarchy structure and time commitment it will require by contractors and owners to actually get to a person to even request such a thing and if you do, the process may take well longer than it did before.

We'll have to see how it goes, but reduction in your insurance is almost guaranteed not to be a thing. Typically, what I see with AI is simply a reduction in quality of services, which, with insurance, is hard to imagine.

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I want to see AI climb up on my roof after a hail storm...

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They can just send a drone out.

And there will be hard set rules, and most will get denied until they jump through 1000 hoops.

They aren't worried about losing you as a customer. If you're filing claims they are the exact customer they don't want.

txags92 said:

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Jason_Roofer said:

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I don't think your rates are going to go down. It is totally agreed that many agents and adjusters aren't good. However, I can get a good claim force approved from a bad agent by going through the proper channels and legal avenues.

If that is replaced with AI, then those claims eventually may have hard set rules and without a person to appeal to, it simply won't go paid. If there is a person, I cannot imagine the heirarchy structure and time commitment it will require by contractors and owners to actually get to a person to even request such a thing and if you do, the process may take well longer than it did before.

We'll have to see how it goes, but reduction in your insurance is almost guaranteed not to be a thing. Typically, what I see with AI is simply a reduction in quality of services, which, with insurance, is hard to imagine.

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I want to see AI climb up on my roof after a hail storm...

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hahahha I LOL'ed as I imagined that!

Logos Stick said:

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A low level employee will climb on the roof, record it with a camera, submit it to the AI image processor and AI will make the damage assessment. And it will do it faster, better and more consistently than humans.

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I work with AI quite a bit for work and there are things it is very good at, but it isn't there yet for that kind of thing.

Well that said, we had a hailstorm in 2020 so in 2021, I had my roof replaced and Liberty Mutual paid for it. I did not pay a dime. They have been increasing prices on me and everyone else anyway, so might as well get a $30,000 roof for free while paying some minimal in increases. Then 2 years later, I switched companies.

Always feels good to stick it to the MAN.

txags92 said:

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Jason_Roofer said:

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I don't think your rates are going to go down. It is totally agreed that many agents and adjusters aren't good. However, I can get a good claim force approved from a bad agent by going through the proper channels and legal avenues.

If that is replaced with AI, then those claims eventually may have hard set rules and without a person to appeal to, it simply won't go paid. If there is a person, I cannot imagine the heirarchy structure and time commitment it will require by contractors and owners to actually get to a person to even request such a thing and if you do, the process may take well longer than it did before.

We'll have to see how it goes, but reduction in your insurance is almost guaranteed not to be a thing. Typically, what I see with AI is simply a reduction in quality of services, which, with insurance, is hard to imagine.

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I want to see AI climb up on my roof after a hail storm...

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Drones, they will use drones. Heck, county tax offices already do.

So you tried AI image analysis and it's worse than a human? On what?

It's much better than diagnostic radiologists right now in the medical field.

Logos Stick said:

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A low level employee will climb on the roof, record it with a camera, submit it to the AI image processor and AI will make the damage assessment. And it will do it faster, better and more consistently than humans.

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Tech eliminated the need to climb on the roof a long time ago.

Good point. Drones with high def cams and fed to AI image analysis engine for assessment. You won't even need a human to go take the vids.

Jason_Roofer said:

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I don't think your rates are going to go down. It is totally agreed that many agents and adjusters aren't good. However, I can get a good claim force approved from a bad agent by going through the proper channels and legal avenues.

If that is replaced with AI, then those claims eventually may have hard set rules and without a person to appeal to, it simply won't go paid. If there is a person, I cannot imagine the heirarchy structure and time commitment it will require by contractors and owners to actually get to a person to even request such a thing and if you do, the process may take well longer than it did before.

We'll have to see how it goes, but reduction in your insurance is almost guaranteed not to be a thing. Typically, what I see with AI is simply a reduction in quality of services, which, with insurance, is hard to imagine.

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Agreed. As previously shared on here a few weeks ago, insurance compnanies are paying fewer claims than ever. It's up to almost half of claims now not being paid. AI will make that worse because of what you said.

Outcome: insurance will become pointless and in some cases already is.

Logos Stick said:

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Good point. Drones with high def cams and fed to AI image analysis engine for assessment. You won't even need a human to go take the vids.

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They already use weather apps/tech to determine if your roof had hail damage, or at least was in the path of hail damage.

We got an auto generated email from Progressive a few months ago asking us if we wanted to file a claim for my wife's new SUV because she was caught out in a hail storm driving between San Antonio and Corpus. How they knew that I have no idea because we aren't using any of there tracking stuff, but she did indeed have some minor hail damage that we opted to just ignore because you can't see it unless you get down eye level and stare really hard. We will drive it for 10 years so I don't really care about the resale hit.

Really?! It's getting crazy.

Queso1 said:

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Nah. The rates will stay the same.

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They will go up.

Logos Stick said:

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Really?! It's getting crazy.

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Yeah, I thought it was creepy as hell. We moved and no longer have Progressive so I never checked into how they actually knew that.

We have Allstate now for better or worse.

AI is a long way from being able to handle stuff a good agent can do... what all agents should do.

The average person doesnt understand the contract or know what to ask/ how to ask it. AI isnt capable of understand what they are asking and come up with an answer that is understandable.

Sadly the average agent or claims rep isnt anymore capable... so the race to the bottom continues.

Logos Stick said:

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So you tried AI image analysis and it's worse than a human? On what?

It's much better than diagnostic radiologists right now in the medical field.

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Not in my field. I've trialed a few programs and they're absolutely terrible so far. They'll improve, but right now they hallucinate radiographic patterns and miss obvious ones.

nomad2007 said:

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Logos Stick said:

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So you tried AI image analysis and it's worse than a human? On what?

It's much better than diagnostic radiologists right now in the medical field.

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Not in my field. I've trialed a few programs and they're absolutely terrible so far. They'll improve, but right now they hallucinate radiographic patterns and miss obvious ones.

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That has been my experience in a different use case. It isn't necessarily that AI misses things that are there, it is that it finds too many things that aren't. Watching Google Nest's AI call the darker goats people over and over when they come to the water tank I have a camera set up on just makes me laugh though.

txags92 said:

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Jason_Roofer said:

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I don't think your rates are going to go down. It is totally agreed that many agents and adjusters aren't good. However, I can get a good claim force approved from a bad agent by going through the proper channels and legal avenues.

If that is replaced with AI, then those claims eventually may have hard set rules and without a person to appeal to, it simply won't go paid. If there is a person, I cannot imagine the heirarchy structure and time commitment it will require by contractors and owners to actually get to a person to even request such a thing and if you do, the process may take well longer than it did before.

We'll have to see how it goes, but reduction in your insurance is almost guaranteed not to be a thing. Typically, what I see with AI is simply a reduction in quality of services, which, with insurance, is hard to imagine.

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I want to see AI climb up on my roof after a hail storm...

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I agree. I still do EYEBALL inspections. BUT...one of my drones does FLIR and high def imaging. These things cost close to 10k in some markets. The AI is getting much better and there are algorithms available that can inspect photographs and IR and ATTEMPT to deduce hail damage. I already use drones for live measurements with AR. So, I can fly or take my phone and give the software 9+ photos and the AI will process that and spit out roof measurements, walls, 3D renderings, etc.

So, yes, while you are correct in that AI can't identify hail perfectly YET...it is coming.

In fact, what I see happening with AI, drones and Satellite is...your neighborhood having a hailstorm, and the insurnace companies send out drones over their insured homes, without your knowledge or consent, generating a report and then telling you that you have hail damage and you need the roof replaced. In other words, if you want to retain insurance, you won't have the leverage to tell me, your roofer, if you want to make a claim or even want to report it. The insurance will make the decision and you can either reroof your house, pay your deductible or out of pocket, or you lose coverage.

That's how I see insurance mitigating their losses.

I quit Farmer's Insurance after 15 years insuring our cars and homes because I could never get my agent on the line. I signed up for the original policies by filling out insurance search aggregator site and they assigned the policies to an agent in Houston when we lived there. Over the years I tried to call the actual local agent on probably 8 or 9 occasions and never once had them answer the call only an answering machine and the one time I did get a call back it was from an office employee that had to forward my questions to the agent. After about 10 years I received notice that my policies were with a different agent and the service was no better, he never once picked up a phone when I called the office.


I'm not convinced they actually had an office with people working. I just did everything in the net with no personal service or relationship so I'm not surprised an insurance company doesn't see value in paying local agents.