Truck Insurance Exchange 2017 Update

Dear Fellow Truck Insurance Exchange Member:

For more than eight decades, Farmers Insurance Group has provided 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.

Truck Insurance Exchange is one of the insurers comprising Farmers Insurance Group®. Truck Insurance Exchange along with Fire Insurance Exchange and Farmers Insurance Exchange, and their subsidiaries and affiliates, provide automobile, homeowners, personal umbrella and business owners insurance. For more information, please visit

Recent Developments

  • In 2016, Farmers® introduced Enterprise First Notice of Loss (EFNOL) – a web-based reporting tool designed to streamline the claims process for personal lines customers (and commercial customers in 20 states). Customers can now report a loss, schedule needed services and follow their claim, along with their agent, from a single streamlined online platform.
  • To help make our customers smarter about insurance, Farmers releases “The Farmers Seasonal Smarts Digest” four times per year to provide drivers and homeowners with knowledgeable, straightforward and proactive tips to help mitigate potentially dangerous and costly insurance losses. The digest examines a three-year window (2013-2016) of Farmers Insurance's historical claims database to identify seasonal perils. Visit to read more.

Community Involvement

  • Farmers continued its commitment to communities by launching two new rebuild projects in San Marcos, Texas and Baton Rouge, Louisiana. Working in partnership with SBP (formerly St. Bernard Project), 410 Farmers volunteers donated 18,788 volunteer hours to rebuild 38 homes in Texas, Louisiana and New Jersey.
  • Our commitment to the communities where we live and work also extends to supporting our nation’s veterans. In 2016, Farmers launched a national Suits for Soldiers campaign to collect gently used suits to donate to active duty military personnel as they transition to civilian work and life. In total, Farmers DMs, agents and employees collected 70,000 suits to help veterans’ transition.

Your Voting Rights
As a member of Truck Insurance Exchange, you have the right to vote for representatives of the Exchange Board of Governors. Attached is a proxy postcard for your vote in our 2017 Annual Meeting of Members of Truck Insurance Exchange. You may vote in person at the meeting or you may appoint a proxy to act on your behalf by executing and returning this proxy postcard. Additional information on Truck Insurance Exchange can be found in the FAQ on the other side of this page.


Dennis J. Lorch
Chair of the Board of Governors of Truck Insurance Exchange

Frequently Asked Questions

As a member of Truck 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. Truck 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 Truck 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 Truck Underwriters Association (TUA)?

Under the Subscription Agreement mentioned above, members appoint TUA 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 TUA has taken less than that amount.

What is TUA?

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

How was your premium dollar spent by Truck Insurance Exchange in 2016?

Your premium dollar covers Exchange costs including losses incurred, acquisition costs, taxes, license fees, the AIF fee, and any contributions to surplus. For 2016, the AIF fee was 14.3 percent of the premium dollar, which included the AIF profit of 6.97 percent of the premium dollar for that year. The results of the Truck Insurance Exchange were impacted by the large number of catastrophe losses but the company still maintained a strong capital base with surplus of $616 million.

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 a cushion against possible 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.

Where can I get more information about the Exchange?

You can go to for most questions. If you have additional questions, please contact:

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