Majority of readers see erosion of opportunities for young producers
Young producers do not have as strong an incentive to enter the agency business and stay in it as did their counterparts of 20 years ago. The leading reason young nonowner producers would be likely to leave their current agency employer is that they lack sufficient sales skills and entrepreneurial spirit needed for success.
Those are the views of the agents responding to the December issue Fax Poll, 86.5% of whom were agency owners, the balance being non-owner producers.
Aside from the lack of skills and spirit needed to succeed, the most common reasons given why a young producer would leave his or her current agency employer were (in descending order of importance): 1) To pursue an opportunity with another agency or brokerage firm; 2) To pursue a sales opportunity in another industry; 3) Lack of sufficient financial incentives; 4) Lack of sufficient support from agency management.
Several agents specifically mentioned commission cuts as being detrimental to their ability to attract and retain young producers.
Almost all of the poll respondents said insurance companies should be doing more to help bring qualified producers into the agency system and keep them there. As to how companies could provide that support, the largest number of respondents (45.1%) favored having insurers help financially and logistically in the hiring process. Next in importance were having companies pay for formal insurance education (31.4%); and making field reps and underwriters more accessible to young producers (23.5%).
All those responding felt that companies which provided such assistance would be rewarded with increased business.
One commented, “Companies could help find and train new, young producers, and finance them with forgiveness of the loan based on new or increased production. They used to experiment with this, but failed to actively participate in training.”
Some agents said the problems involved in attracting and retaining new producers are linked to the issue of long-term stability in the insurance market. They called on companies to provide “truly bilateral” agency contracts, more opportunities for small agencies and fewer shifts in marketing direction.
One agent suggested that agency workloads need to be realigned. “The agency system is overstaffed with office personnel. I would do away with what are known as CSRs and train producers to do the same work, with the support of a clerical office pool doing correspondence and typing. Most agency owners should ‘go back to work’ and stay current.”
Young producers aren’t the only potential source of “new sales blood” that can be brought into an agency. Asked whether they would be likely to hire a veteran agency owner who had sold an agency and wants to continue producing business as a non-owner, 54.3% said yes and 45.7% said no.
Respondents to our poll who are agency owners had their first taste of agency ownership at these ages: Under 25, 9.1%; 25-30, 36.3%; 31-35, 27.3%; 36-40, 18.2%; over 40, 9.1%. s
Copyright Rough Notes Co., Inc. Feb 1995
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