Through mid-year 2002, the industry saw a 3% decline in new recruits joining career insurance carriers, according to a recent LIMRA report. But the survey also shows that 74% of those new recruits are inexperienced, an 8% increase from 2001s figures.
“That 3% decline isnt surprising,” says William H. Buckley, executive vice president of Northwestern Mutual, Milwaukee, Wis. “The head count for the industry has been going down pretty steadily for 15 years.”
But recruiting at Northwestern was up for the fifth year in a row, with 1,787 new agents–a 5% increase over 2001. “Weve seen a very steady and very strong increase in the number of recruits into the business over this five-year period,” he says.
Of the new agents hired by Northwestern, Buckley estimates 96% of them to be inexperienced–as opposed to LIMRAs average of 74%–with many of them coming right off college campuses. In fact, the average age of Northwesterns class of 2002 is 31 years old.
“We have a very active college recruiting program,” Buckley explains. “In any given year, well have over 1,000 college seniors sampling the career while still in school.”
In this years recruiting class, 221 of those college interns converted to a full-time contract upon graduation.
At Guardian Life Insurance Company, there was a 17% jump in recruiting last year–signing on 891 new financial representatives. “It was actually our largest class,” says Emily Viner, director of agency distribution and development for the New York-based insurer.
Similar to what the LIMRA report found, Viner estimates about 70% of those new representatives had no prior experience in the life insurance business. “They were people from a variety of sales backgrounds, people from stock brokerage firms, a number of accountants, a number of attorneys,” she explains.
Unlike Northwestern, which has a complete college recruiting program, only a small percentage of Guardians recruits, which Viner estimated at 6%, came right out of college.
According to Viner, the primary reason many of these career changers joined Guardian was “a control issue. They didnt feel like they had enough control in their current position.”
Despite the rise in inexperienced recruits, however, one problem that looms for the industry is an aging field force. According to Buckley, the average age of the insurance producer today is 52 years old.
And while Buckley notes that the biggest growth area appears to be in brokerage distribution, “if you look closely, its really just movement of career representatives into the brokerage market, not new people into that distribution,” he says.