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Farmers Insurance Exchange 2026 Update

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Dear Fellow Farmers Insurance Exchange Member:

Farmers Insurance Group® ontinues to provide its customers with coverage options to help them manage risk and meet their insurance needs. We strive to deliver the best value and experience to every customer we're privileged to serve. Farmers appreciates your business and looks forward to continuing to earn your confidence for many years to come. Farmers Insurance Exchange is one of the insurers comprising Farmers Insurance Group®. Farmers Insurance Exchange along with Fire Insurance Exchange and Truck Insurance Exchange, and their subsidiaries and affiliates, provide automobile, homeowners, personal umbrella, and business owners insurance. For more information, please visit  farmers.com. 

Recent Developments

  • In 2025, we once again delivered when it mattered most in a year full of disasters. Our Claims teams responded to 62 catastrophe events nationwide - including record-breaking wildfires in California - providing fast, on-the-ground support with Mobile Claims Centers and catastrophe response teams.
  • We maintained intense focus on claims speed and accuracy, which is driving real value for our customers. Cycle times continued to improve, and independent surveys showed that Farmers customers rate our claims handling highly - a strong indicator of the trust we've earned and our commitment to service excellence.
  • Our financial position remains robust. We further strengthened surplus in 2025, keeping the Farmers Exchanges well-capitalized for the future. At the same time, we refined our approach to catastrophe exposure - from underwriting actions to enhanced reinsurance - rebalancing our risk portfolio to help better protect against major events.
  • We introduced new digital tools to improve the customer and agent experience. Notably, our industry-leading quoting platform for agents - rolled out broadly in 2025 - now lets customers receive multiple quotes more quickly and with less friction, making it easier than ever to get the coverage they need.

Better Together

  • We continue to prioritize people development, fostering a workplace culture of continuous improvement, accountability and strategic focus. This commitment is nurturing team members who are more resilient and adaptable to change, which ultimately benefits our customers and our organization's agility.
  • In 2025, leaders across the organization took part in our peer learning and development forums, sharpening their people-leadership skills and sharing best practices. These programs are strengthening our leadership bench and ensuring we have strong, effective leaders guiding our teams.
  • Our employees continued to live Farmers' values in the community. In 2025, they volunteered over 30,000 hours (a new record) across thousands of charitable causes in over 900 communities nationwide - from disaster relief to local community service.
  • Through these volunteer efforts, over 200,000 people were directly helped last year. Whether by packing and serving meals with partners like Operation BBQ Relief, Rise Against Hunger and 9/11 Day, or other acts of service, our employees tangibly improved lives and demonstrated that we truly are better together with our communities.

Your Voting Rights

As a member of Farmers Insurance Exchange, you have the important right to vote for representatives of the Exchange Board of Governors. To ensure that all our customers have an opportunity to exercise their voting rights, we offer three ways in which you can cast your votes. You may vote in person at the Annual Meeting of Members of Farmers Insurance Exchange, appoint a proxy to act on your behalf by requesting and returning a completed proxy form, or conveniently cast your votes online through your Farmers.com account. Additional information on Farmers Insurance Exchange and your voting  options can be found in the FAQs. Thank you for your ongoing support and  participation.

Sincerely,

The Board of Governors of Farmers Insurance Exchange

FREQUENTLY ASKED QUESTIONS

As a member of Farmers Insurance Exchange, we want you to understand the basics of the operation of an Exchange because, as you will see below, you are an owner of the Exchange.

What is an Exchange?

An Exchange is an insurance organization, which operates in most ways like any other insurance company, but with a few key differences. Farmers Insurance Exchange was organized under a provision in the California Insurance Code, which allows insureds to "exchange" policies with other insureds. Because the insureds cannot practically be involved in actually issuing policies, collecting premium, paying commissions to agents, etc., they appoint a third party - called an "attorney-in-fact" (AIF) - to perform those duties on their behalf for a fee. That appointment is made through a document called a "Subscription Agreement." You were asked to sign a Subscription Agreement at the time you applied for insurance with Farmers Insurance Exchange and that is how you became a member (aka subscriber).

Who owns the Exchange?

You do. Subscribers of the Exchange are owners until such time as they no longer have insurance from the Exchange. Subscribers elect a Board of Governors which supervises the financial affairs of the Exchange and the performance of the AIF in conformity with the Subscription Agreement terms.

Why is an AIF fee paid to Farmers Underwriters Association (FUA)?

Under the Subscription Agreement mentioned above, members appoint FUA to perform certain of the tasks, such as policy issuance and collection of premium, which are involved in running an insurance operation. The Subscription Agreement specifies an AIF fee of 20 percent of premium, although FUA has taken less than that amount.

What is FUA?

FUA is the business name utilized by Farmers Group, Inc. (FGI) to describe its functions as the AIF for Farmers Insurance Exchange. FGI is part of the Zurich Insurance Group, Ltd (ZIG), a Swiss company. Neither FUA, FGI nor ZIG has any ownership interest in Farmers Insurance Exchange, which is owned by its subscribers (insureds).

How was your premium dollar spent by Farmers Insurance Exchange in 2025?

Your premium dollar covers Exchange costs including losses incurred, acquisition costs, taxes, license fees, the AIF fee, and any contributions to surplus. For 2025, the AIF fee was 13.0% of the premium dollar, which included the AIF profit of 6.99% of the premium dollar for that year.

Can the Exchange lose money?

If premiums collected exceed claims payments and other expenses (including the fee for the AIF), then the Exchange retains those net premium earnings (as contributions to surplus). If premiums are not sufficient to cover claims and expenses, the Exchange will lose money. That's one reason it is important to build surplus to pay future losses. The AIF does not participate in claims losses and does not enjoy any net premium earnings. Importantly, subscribers are not responsible for any losses the Exchange might suffer. 

How can I exercise my right to vote?

You may exercise your voting rights in any of the following ways:

  1. By attending the annual membersÂ’ meeting in Woodland Hills, CA on March 15, 2027, at 2 PM,
  2. Electronically through your Farmers.com account (voting will be available from January 1, 2027, to March 5, 2027, and you will be required to create a Farmers.com account if you do not already have one), or
  3. Through mail by requesting a paper proxy from the Subscriber Relations Office (completed proxies must be received by March 5, 2027).

Where can I get more information about the Exchange, or obtain a paper proxy?

You can go to www.farmers.com/about-us for most questions. If you have additional questions or want to obtain a paper proxy along with a postage paid envelope to confidentially return your proxy, please contact:

Subscriber Relations Office
Farmers Insurance Exchange
Attn: Corporate Secretary
P.O. Box 4461
Woodland Hills, CA 91365