Our Companies

Fire Insurance Exchange 2021 Update

Dear Fellow Fire Insurance Exchange Member:

As we close the books on 2020, Farmers Insurance Group® continues 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.

Fire Insurance Exchange is one of the insurers comprising Farmers Insurance Group®. Fire Insurance Exchange along with Farmers 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

  • Farmers signed an agreement to acquire Metropolitan Property and Casualty Insurance Company and its subsidiaries, better known as MetLife Auto & Home®, an exciting opportunity that, once complete in 2021, will diversify our distribution and increase our revenue by roughly 15%.
  • Despite the challenges of COVID-19, we achieved our highest scores around customer experience, which tells us we delivered to our customers throughout the year during a difficult time.
  • During the first months of COVID-19, Farmers issued premium-reduction credits to more than 4million auto customers in a timely and efficient manner.
  • Our significant investment in Claims technology paid off during our safety-first, work-at-home environment with customers responding that they appreciated our digital and virtual claims experience.

Stronger Together

  • Health and safety remained our top priority during the pandemic and employees remained productive and heard through regular townhalls and business updates.
  • As the nation struggled with racial injustice, we also took time for some honest, at times difficult conversations on race, and committed ourselves to creating a more diverse and inclusive work environment at Farmers.


As a member of Fire Insurance Exchange, you have the important right to vote for representatives of the Exchange Board of Governors. In the past, you could only vote by attending the annual policyholders. meeting in person or by completing a paper proxy card. As a result of our ongoing efforts to modernize our processes, we are excited to inform you that going forward, you will also have the option to vote online via your Farmers.com account. Online voting will allow you to securely exercise your voting rights with just the click of a few buttons, and you will no longer need to manually complete and mail back a proxy postcard, unless you choose to do so.

Online voting period will commence on January 1, 2022 and end on March 11, 2022. To participate in the online voting process, you will need to create a Farmers.com account if you do not already have one. We strongly encourage you to have your email address on file with us as well, as an email notification will be sent out to all registered policyholders when the voting period commences.

While you continue to have the option to attend a policyholders. meeting in person or to request a paper proxy, we hope you will take advantage of the easier online voting option. Additional information on Fire Insurance Exchange and your voting options can be found in the FAQ.

Thank you for your ongoing support and patronage.

Kenneth W. Bentley
Chair of the Board of Governors of Fire Insurance Exchange



As a member of Fire 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. Fire 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 Fire 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 Fire 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 25 percent of premium, although FUA has taken less than that amount.

What is FUA?

FUA is a wholly owned subsidiary of Farmers Group, Inc. (FGI), which is part of the Zurich Insurance Group, Ltd (ZIG), a Swiss company. Neither FUA, FGI nor ZIG has any ownership interest in Fire Insurance Exchange, which is owned by its subscribers (insureds).

How was your premium dollar spent by Fire Insurance Exchange in 2020?

Your premium dollar covers Exchange costs including losses incurred, acquisition costs, taxes, license fees, the AIF fee, and any contributions to surplus. For 2020, the AIF fee was 12.4% of the premium dollar, which included the AIF profit of 6.74% 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 members. meeting in Woodland Hills, CA on March 21, 2022 at 10 AM,
  2. Electronically through your Farmers.com account (voting will be available from January 1, 2022 to March 11, 2022), or
  3. Through mail by requesting a paper proxy from the Subscriber Relations Office (completed proxies must be received by March 11, 2022)

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
Fire Insurance Exchange
Attn: Corporate Secretary
P.O. Box 4461
Woodland Hills, CA 91365