DEVELOPMENT
THE CORE PROBLEMS
Based on today ’ s climate of high carrier production volume commitments , the days of a young new producer starting from scratch are over . Today , new P / C agencies are for the most part created by experienced producers splitting from their current employer usually with part or their entire book . The incentive to sell insurance in their own firm is reserved only for the “ proven ” producer . There are clusters or networks these proven producers can join and pay a fee to access markets , as well .
New producers must establish themselves as employees until their book is big enough to split off . The exception , however , is the agent that sells nonstandard auto and employee benefits , which do not typically have the volume commitments owed to the carriers .
NEW INSURANCE RECRUIT AVENUES
There is no institutional educational conduit for young people to enter into the insurance industry . An 18-year-old high school student typically will have no knowledge of career opportunities in insurance unless a local agent shows up for career day . In some locations , Project Invest introduces high school students to insurance but this is very limited . As an industry , we need to promote career opportunities to young people .
There are now some universities with specialty Risk Management and Insurance majors , however , there are still not a lot of these . If you google Risk Management degrees , you ’ re likely to find only 10 to 15 schools nationwide that have this specialty .
Finally , most agency owners cannot or will not make the necessary investments to train and develop young producers . The majority of agencies are relatively small — fewer than 20 to 30 employees — and these firms usually do not have the resources to sponsor a new producer until he or she is self sufficient ( i . e ., pay a reasonable salary while the producer validates his or her compensation ). Yet this is the type of firm whose survival is directly linked to the development of new producers .
Sometimes insurance companies will cover some of the costs associated with producer development , but this has been waning over the years .
Producers are the sales force of the insurance companies . What other industries do not train and support their own sales force ? Companies need to step up to the plate and provide more training , education and financial support for new producers for their key agencies , at a minimum .
PRODUCER DEVELOPMENT
Agency owners cannot individually change the first two core problems — difficulty starting new agencies from scratch and the need for institutional training for new producers . Many agencies ( and the industry ) cannot afford to wait for that ideal experienced producer with a book of business to show up . Owners can and must bite the bullet and make the financial investment in new unproven sales personnel .
But what is the best source for this “ virgin material ” in today ’ s low unemployment environment . It is really important to look for new producers in a strategic manner because the cost of failure is expensive in both dollars and lost time . A random shotgun approach often produces poor or no results at a high cost . Agency owners need to understand their current agency “ personality ” and resources and then map out the goals for future sales .
PRINCIPLE TARGETS FROM OTHER INDUSTRIES
Specific producer sources can then be targeted , which will streamline the process and increase the chances of success .
JULY / AUGUST 2024
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