State Farm, the largest private employer in Richardson, is facing widespread pushback over a new strategy that leans heavily on artificial intelligence and rewrites the contracts of its roughly 19,000 sales agents.
The insurer, which employs about 12,000 people at its regional hub in Richardson's CityLine development, unveiled the effort, called "Next Gen Good Neighbor," in May. The company says it is modernizing sales, claims and customer service as more consumers expect faster, digital experiences.
State Farm, which joined OpenAI's Frontier enterprise platform as a launch partner in February, has built AI tools for its agents, including a digital assistant called Navi that pulls up price quotes and policy details, and Household Story, which generates summaries of a household's needs and product recommendations.
The changes that have drawn the most anger involve pay and benefits for the agents, who are independent contractors.
Under new contracts that agents would need to sign to remain past 2027, State Farm would move to performance-based commissions, reduce pay for agents who miss sales targets in consecutive years, and eliminate a long-standing deferred compensation program that many treated as retirement savings, along with health coverage for agents and their spouses.
Some agents have said base commissions could fall 35 to 40 percent, and one wrote on social media that the plan was "a real slap in the face."
State Farm has disputed that figure, calling the 35-to-40-percent estimate "speculation" and saying the new structure will let agents "grow and help more customers." After strong pushback from agency owners, the company also walked back part of the plan, saying it would extend certain retirement-related benefits for three more years, with payouts tied to future sales performance and details not yet final.
Customers have been skeptical as well. In a survey of about 900 readers by the payments news site PYMNTS, many described AI chatbots and automated systems in unflattering terms, and some said they would look for a new insurer if their local agent closed.