Business

Monday, Jun 23 2014 05:17 PM

State Farm brings on more independent contractors in Bakersfield

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    By Felix Adamo / The Californian

    State Farm Place intersects with Old River Road where State Farm Insurance is located.

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    By Felix Adamo / The Californian

    The grand entrance to State Farm Insurance at 900 Old River Road.

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BY JOHN COX Californian staff writer jcox@bakersfield.com

State Farm Insurance says it has increased its use of independent claims adjusters in Bakersfield, but not at the expense of employee staffing levels.

The Illinois-based company -- a source of worried speculation locally because of its national consolidation moves -- said its transition toward greater local use of independent contractors gives it more flexibility to meet customer demand.

"It is a common industry practice to utilize independent adjusters to meet changes in claim volume that may be caused by several factors, including catastrophes," company spokesman Sevag Sarkissian wrote in an email last week.

Sarkissian declined to disclose how many nonemployee contractors have been added in Bakersfield. But he emphasized greater use of such workers has not been accompanied by a reduction in State Farm's 1,300-employee staff at its local operations center, 900 Old River Road.

State Farm stoked fears the company may be planning to pull up stakes in Bakersfield when in August it announced it had offered for sale its 556,000-square-foot Old River Road complex along with 22 other properties across the country, including other operations centers.

The Bakersfield property sold to a private equity firm in the fourth quarter of last year under a lease-back arrangement that gives the insurer at least five more years at the site.

The company denies the sale indicates it plans to leave Bakersfield. Sarkissian wrote in an email Monday that leasing rather than owning "provides State Farm flexibility to make adjustments in our operations to better serve our customers."

In recent years State Farm has leased or begun construction on massive business complexes in Arizona and Texas. Sarkissian called these moves business model updates intended to support growth.

"State Farm will use multifunctional hubs in Atlanta, Dallas and Phoenix; corporate headquarters in Bloomington, Illinois and operations centers, including the Bakersfield Operations Center, to serve our customers," he wrote by email Monday.

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