RETAIL AGENCY PROGRAM

11

RETAIL PROGRAM The Retail program is designed to attract capitalized entrepreneurs seeking a start-up opportunity that maximizes their ROI and provides the financial support to rapidly grow.

The Candidate�� Proven background in building and managing a business venture

�� The desire to build a business legacy to monetize or pass on

�� Decisions made with ROI and cash flow in mind

�� Values University of Farmers and best in class learning and development opportunities

Self-Motivation and Independence�� Effective time-management skills and self-reliance to accomplish goals

�� The ability to identify and focus on priorities

Communication Skills �� The ability to inspire as well as listen and learn from others

�� Leadership and people management skills

Performance �� The motivation to work hard and take risks to achieve financial success

�� Willing and able to make investments into business opportunity for future gain

�� The willingness to accept responsibility for personal success and failures

12

The ProcessAssets

�� Minimum of $50,000 in seasoned investable assets

Licensing and Training�� Property and Casualty, Life and Health and Approved U4 required prior to agent appointment

�� Training Milestones and Assessments

Background Check�� Satisfactory results of background check

Business Plan�� Approval of 5-year business plan and cash flow projection

Branded Office Location�� Office location fully equipped and compliant with Farmers SMART Office standards

Agency Staff�� Minimum of 1 licensed and appointed agency staff member (with second licensed and appointed staff required within 6 months of appointment)

The Benefits Economic Interest

�� Contract Value according to the terms of the appointment agreement

Sale of Service and Commission Rights �� Immediate ability to sell service and commission rights

Office Start-up Bonus Program�� Up to $10,000 bonus for office startup expenses

Agency Lead Generation Bonus Program�� Up to $5,000 bonus for lead generation expenses

Annual New Business Premium Bonus�� 6% paid on rolling 12-month new business Agent Eligible Premium

�� Annual bonuses paid on Life and Commercial premiums subject to caps

Monthly New Business Premium Bonus�� Monthly bonus % paid on qualified new business premium

�� All agents start at Tier C bonus level for first quarter and then Tiers are determined by prior quarter performance

�� Monthly bonuses paid on Life and Commercial premiums subject to caps

6

Why Become a Farmers Agency Owner?

Support As a Farmers agency owner, you will enjoy:

�� Support from a District Manager and/or business consultant invested in your success

�� Comprehensive training and business development support

�� Financial bonus opportunities

�� Lead generation & agency start-up cost support*

�� Loan options through Farmers Insurance Group Federal Credit Union

�� An option to participate in a deferred compensation plan

�� Benefits for you, your family and your staff

�� The ability to open multiple office locations

�� The ability to sell your service & commission rights

�� An opportunity to buy service & commission rights from another agent

*Applicable to certain programs only.

19

Product Portfolio

Outstanding product suite that allows you to compete and succeed

Property & Casualty Insurance

LifeInsurance

FinancialProducts1

�� Auto

�� Home/Renters

�� Umbrella

�� Small Business:�– Commercial P&C

�– Business Auto

�– Workers’ Comp

�� Boat

�� Motorcycle

�� Motor Home

�� Mobile Home

�� 529 Plans

�� 401(k)s

�� Variable Annuities

�� IRAs

�� SEPs

�� Variable Universal Life

�� Mutual Funds with nationally recognized fund families

�� Term Life

�� Universal Life

�� Whole Life

�� Critical Illness Riders

�� AD&D

�� Disability Income Riders

�� Group Life

�� Fixed Annuities

1 Securities offered through Farmers Financial Solutions, LLC – Member FINRA & SIPC Note: All products and features may not be available in all states and may vary by state

28

Business Development Support – Outplacement

Ability to refer business not eligible/acceptable to Farmers to Kraft Lake Insurance Agency, Inc.

Accessible through web portals, email, and toll free phone numbers.

ProfessionalLiability (E&O)

High ValueHomeowners

E&S Vacant Building/Land

…and more

Farm & Ranch

Contractor’s General Liability

18

Financial Support – Start-up Bonuses

Up to

$10,000o�ce

start-up

bonus

Up to

$5,000lead

generationbonus

+

Incentive-based bonuses to help support your new business

�� Agency owners have the opportunity to receive up to $10,000 in their first year for expenses related to setting up and outfitting a new professional, Farmers-branded office*

�� Agency owners also have the opportunity to receive up to $5,000 in their first year for lead-generation expenses (Retail only)

You have the talent. We’ll provide the support.

*Applicable to certain programs only.

29

Business Development Support – Sales Tools

Outstanding sales insights and management support tools

Lead Management enables you to:�� Manage your leads and cross-selling opportunities

�� Launch automated sequential marketing programs (SMP)

�� Write new business with access to a lead database

Sales Management provides you with:�� Real-time analytics for managing lead source

effectiveness and setting and tracking goals

�� Visibility into your sales pipeline

Financial Management gives you:�� The ability to analyze staff and

compensation strategies

�� Evaluations of investment opportunities with what-if scenarios

SIMS Examples

Visit www.BeAFarmersAgent.com

20

Financial Support – Performance Bonuses

Retail Program

Financial support that rewards your performance�� Tiered bonus system based on cumulative, applicable policies in force or applicable gross folio

premium generated

�� Performance in the prior quarter determines the next quarter’s bonus tier (from Q2 onward; in Q1 all agents start on the same bonus tier)

�� Bonus tiers correspond to percentages that are applied to new business gross folio premium generated in the bonus period to calculate bonus amounts

�� Performance based bonuses are paid out monthly and agents receive an additional annual bonus for years one to three after appointment

�� Monthly and annual bonuses for commercial and life insurance are subject to capping

0

1,000

2,000

3,000

4,000Policies In Force (#)

Bonus tier

B

C

A

01,0002,0003,0004,0005,0006,000

Gross Folio Premium ($ tsd.)

Bonus tier

B

C

AOR

Note: Policies in force and gross folio premium requirements as well as bonus percentages shown areillustrative, subject to change and adjusted based on local market environment. Additionally, there are separaterequirements for P&C and Life.

Monthly New Business Agent Eligible Premium Bonus Percentage by Tier

Tier Q1 Q2 Q3 Q4 Y1 Q5 Q6 Q7 Q8 Y2 Q9 Q10 Q11 Q12 Y3

A 30.5% 34.8% 30.3% 26.3% 6% 24.9% 21.9% 19.3% 17.1% 6% 13.1% 11.4% 9.9% 8.6% 6%

B 30.5% 32.6% 28.4% 24.7% 6% 23.5% 20.7% 18.3% 16.1% 6% 12.3% 10.7% 9.3% 8.1% 6%

C 30.5% 30.5% 26.5% 23% 6% 22.1% 19.4% 17.2% 15.2% 6% 11.5% 10% 8.7% 7.6% 6%

Monthly Premium Bonus Caps

Year 1 Year 2 Year 3

LIFE

Monthly $1,400 $1,200 $1,000

Annual $3,000 $4,500 $6,000

COMMERCIAL

Monthly $3,500 $3,000 $2,500

Annual $7,500 $10,000 $12,500

27

Business Development Support – Start-up

Access to agency start-up support services

LoanSupport

PayrollSupport

O�ceSupport

LicensingSupport

Access to discounted

licensing courses:

P&C, Life, Series 6/63

Access to discounted

o�ce furniture,

technology, branding,

and art

Access to discounted

payroll set up and

processing services

Loan support from Farmers

Insurance Group

Federal Credit Union

26

Financial Support – Benefits

Access to Group Life and Comprehensive Medical plans for you, your family and your staff

Voluntary Hospital Plan

Dental

Vision Service Plan

Life/ AD&D, Supplemental AD&D

Critical Illness Insurance Plan

Long Term Disability

Enhanced Long Term Disability

Business Overhead Expense

Errors and Omissions

Fidelity Bond

Medical

Deferred Compensation Plan

Visit www.BeAFarmersAgent.com

30

Other Support & Options

After hour call center

Cross border licensing

Satelliteo�ces

Agency Acquisition

Option

Ability for existing customers to make policy changes and make payments over the phone after normal agency hours

Dual agent appointment to enable writing business in other states, subject to approval

Ability to set up additional office locations to increase market penetration, subject to approval

Ability to purchase service and commission rights from another Farmers agent, subject to approval

22

To Become a Farmers Agency Owner

�� Interviews

�� Background check

�� Available assets verification

�� Approved business plan & cash flow projection

�� Final candidate review

Agency Development

BaseTraining

Licensing

Recruiting

�� Property & Casualty insurance license

�� Life & Health insurance license

�� Comprehensive online & instructor-led training courses

�� Pass assessment tests

�� FFS approval of Form U4

�� Approved business plan

�� Office set up with applicable licensed staff requirements

Access to incentive-based financial bonuses�– Lead generation (Retail only)�– Office start-up bonuses in year one�– Monthly bonus up to three years (Retail and Acquisition)�– Annual financial bonuses for three years after appointment (Retail only)�– Additional bonuses available throughout your agency ownership

�� Securities licensed and FFS approved to sell to be obtained within twelve months after appointment

�� Ability to sell your service & commission rights

�� Opportunity to acquire additional service & commission rights

Visit www.BeAFarmersAgent.com

To schedule a time to meet please contact:

Michael de los Reyes

Agency Development Manager

michaeld@district7322.com

Office of Michael Susee 8625 SW Cascade Ave., Suite 310

Beaverton, OR 97008 Phone: 503-546-1595 ext. 113