Farmers Insurance: Woke Capitalism Or Genuine Commitment?

In 2023, Farmers Insurance announced that it would no longer service the Florida insurance market, affecting thousands of automobile, home, and umbrella insurance policyholders. This decision sparked a political debate, with Florida's Chief Financial Officer, Jimmy Patronis, accusing the company of being woke and playing politics. Patronis claimed that Farmers Insurance's decision to leave Florida was due to its focus on sustainable insurance and aligning investments with social values, such as avoiding investing in polluters or companies that discriminate. Democrats, on the other hand, blamed the Republican party for the insurance crisis and their failure to address the issues. Farmers Insurance has also released a statement supporting racial justice and condemning the deaths of George Floyd and other Black Americans.

Farmers Insurance's commitment to Environmental, Social and Governance (ESG)

Farmers Insurance has demonstrated its commitment to Environmental, Social and Governance (ESG) principles through various initiatives and strategies.

On November 2, 2022, Farmers Insurance Exchange became the first US-based insurer to sign the United Nations Environment Programme Finance Initiative's Principles for Sustainable Insurance (PSI). This move underscores the company's dedication to integrating ESG considerations into its business practices. By signing the PSI, Farmers Insurance has committed to embedding ESG issues into decision-making, working with stakeholders to address ESG challenges, and promoting transparency in disclosing its progress.

Prior to this, Farmers Insurance had already been actively addressing ESG areas. One notable effort is their transition to a fully hybrid and electric fleet of company vehicles, reducing their carbon footprint. They have also made strides in paperless billing processes, removing polystyrene and plastic from operations, and investing in funds that aid homeowners in disaster recovery. Additionally, Farmers Insurance has a history of supporting underserved communities through IMPACT Community Capital, making socially responsible investments.

The company's commitment to ESG is further exemplified by their focus on employee welfare and community service. They have implemented programs like the Farmers Family Fund, which provides financial support to employees during unexpected hardships, and the Disaster Relief Giving Campaigns, which facilitate employee contributions to nonprofits assisting communities affected by natural disasters. Farmers Insurance also collaborates with nonprofit partners to enhance disaster resilience, sharing best practices and safety information.

Moreover, Farmers Insurance prioritizes economic empowerment by supporting programs that eliminate financial barriers for low-to-moderate-income communities. They work with organizations to deliver financial literacy, insurance education, and career development opportunities. The company also emphasizes diversity, equity, inclusion, and belonging as foundational aspects of their organizational culture, fostering employee resource groups to create an inclusive workplace.

Overall, Farmers Insurance's commitment to ESG is evident through their strategic initiatives, sustainability efforts, community engagement, and dedication to positively impacting their customers, employees, and communities.

Florida CFO Jimmy Patronis calls Farmers Insurance woke

Florida CFO Jimmy Patronis calls Farmers Insurance "woke"

In July 2023, Farmers Insurance announced it would no longer service the Florida insurance market, affecting thousands of automobile, home, and umbrella insurance policyholders. The company explained that the decision was necessary to effectively manage risk exposure.

In response, Florida Chief Financial Officer Jimmy Patronis, who oversees insurance companies, accused Farmers Insurance of being being "woke" and playing politics. He also threatened to investigate and fine the company, stating that he wanted additional scrutiny on Farmers Insurance. Patronis' comments came amidst a string of insurance companies pulling back from issuing policies in Florida following natural disasters, including hurricanes and rainstorms, which have made it too expensive to cover residents of the state. Patronis blamed "wokeness" for insurers leaving the state, specifically calling out Farmers Insurance's focus on ESG (environmental, social, and corporate governance). He claimed that if the company had focused on the bottom line instead of ESG, they may not have decided to leave Florida.

Patronis' statement sparked backlash from Democrats, who blamed Republicans for the insurance crisis in the state. Florida House Democratic Leader Fentrice Driskell called the Republican-led insurance reforms a "giveaway" to insurance companies, and stated that Republicans needed to "own this failure." Rep. Hillary Cassel, D-Dania Beach, also criticized Patronis for only looking into complaints against Farmers Insurance after they decided to leave the state.

Patronis' comments added to the ongoing political debate around insurance in Florida, with opponents of Governor Ron DeSantis seeing the insurance issue as a point of weakness in his presidential campaign.

Patronis threatens to investigate and fine Farmers Insurance

Florida's Chief Financial Officer, Jimmy Patronis, has threatened to investigate and fine Farmers Insurance for pulling out of the state. Patronis, a Republican, has blamed the insurance company's decision on "wokeness", rather than the impact of climate change and hurricanes on the state.

Farmers Insurance announced that it would stop issuing new policies in Florida and would not renew certain existing home, automobile, and umbrella policies. This decision affects about 100,000 policies, or nearly a third of Farmers' business in the state. The company explained that the move was necessary to effectively manage risk exposure.

Patronis, however, accused Farmers Insurance of "playing politics" and not focusing on its customers. He also criticized the company's commitment to "Environmental, Social and Governance" (ESG) principles and its decision to become a signatory of the United Nations Principles for Sustainable Insurance.

In response to Farmers' decision, Patronis said:

> "I sincerely believe that with today's actions, Farmers Insurance is well on its way to becoming the Bud Light of insurance."

He also stated that he had directed his team to investigate complaints against Farmers Insurance, which could lead to fines and further scrutiny of the company. Patronis added that Farmers Insurance leaders may be "hauled before the Legislature to answer for their actions" during the next legislative session.

Farmers Insurance's statement on racial justice

Farmers Insurance has released a statement on racial justice, expressing their support for the Black Lives Matter movement and advocating for an end to systemic racism. The statement emphasizes the company's commitment to ensuring that all customers are treated equally and without discrimination based on race, religion, gender, or sexual orientation. This commitment extends to their employees, vendors, and agents as well.

The statement acknowledges the tragic deaths of George Floyd and countless other Black Americans, and the company chooses not to remain silent on this issue. They express sorrow for the families and friends affected by these senseless acts of racial violence.

Farmers Insurance also highlights the importance of listening to the experiences of their employees and taking action towards change. They pledge to promote basic human dignity and justice for all people, not just in words but also through their actions. This includes personal donations made by the Governors to organizations supporting racial justice and civil rights, as well as a continued commitment to recruiting diverse talent that reflects their customer base.

In addition, Farmers Insurance has taken a stand against violence and discrimination targeting the Asian-American and Pacific Islander (AAPI) community. They have made donations to several causes supporting the AAPI community and combating violence, including Asian Americans Advancing Justice – Los Angeles, Stop AAPI Hate, and Off Their Plate.

The company's leadership team and employee resource groups, such as the Farmers Asian Alliance (FAA) and the Farmers Black Professionals Alliance (BPA), play a crucial role in driving their commitment to diversity, equality, and inclusion. Through these efforts, Farmers Insurance strives to foster an inclusive environment where all individuals are valued and respected, regardless of their race, culture, or identity.

Patronis accuses Farmers Insurance of playing politics

Florida's Chief Financial Officer Jimmy Patronis accused Farmers Insurance of "playing politics" following the company's announcement that it would be exiting its own-branded personal lines business in the state. This decision left around 100,000 policyholders in Florida scrambling to find alternative coverage.

Patronis claimed that Farmers Insurance's focus on "sustainable insurance" and aligning its investments with social values demonstrated that the company was more interested in "virtue signalling" than helping its customers. He also criticised the company's use of ESG (environmental, social and governance) policies, arguing that these policies distracted from the company's focus on Florida's policyholders and did not always align with shareholders' financial interests.

In a statement, Patronis said:

> "The more we learn about Farmers Insurance the more it’s clear its leadership doesn’t know what they’re doing. While they’re bad at helping people, they’re good at virtue signalling. It’s clear that while Farmers was making plans to exit a significant number of policies out of Florida, they were playing politics, and weren’t focused on running a successful company."

Patronis also announced his intention to investigate complaints against Farmers Insurance, which could result in fines and fees for the company. He invited officials from Farmers Insurance to contact his office to discuss the issue further.

Frequently asked questions