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.
“You see an aging of the field force, its evident everywhere,” adds Ken Olson, president of life brokerage for Zurich Life, Schaumburg, Ill.
“The young blood population is diminishing,” he says.
But Olson feels this will not impact independent distribution for several years, and his company continues to see growth in the number of newly appointed agents–with 500 to 800 new agent appointments every month.
Olson notes that this has been a fairly consistent rate of growth for Zurich, which has almost 50,000 licensed brokers actively selling its products. He also adds that those new agents made up about 25% of the total business submitted in 2002.
SAFECO Life & Investments, Redmond, Wash., has also seen an increase in its newly appointed producers, with almost 28% growth bringing the total to about 35,000 independents actively selling its products, according to Michele Kemper, vice president marketing agency services for SAFECO.
She describes the new producers as being “significant volume producing agents.”
Both Zurich and SAFECO attribute the growth of their sales force, in part, to steps they have taken to make it easier for agents to get licensed and sell their products.
Both carriers have expedited appointment procedures which give brokers the opportunity to get appointed and submit business almost instantaneously with minimal paperwork (see NU, 7/15/02).
“A new agent doesnt have to submit any paperwork with us, its just an online form that takes seven to 10 minutes to fill out,” says Olson.
A new tool that Kemper feels has helped attract new representatives to SAFECO is its online system, which allows an agent to quote, illustrate and issue a policy, all in a matter of minutes.
But in addition to using technology tools to draw brokers, SAFECO organized a targeted recruiting effort through its existing representatives. “If youve got a high performing agency, you rub elbows with other high performing agencies,” Kemper says.
SAFECO added incentives to its existing field force to recruit other producers to join them. But as Kemper explains, “It works a few different ways. It boils down to three things: they want to grow their business, they want to make more money, and they want to take care of their own clients.”
Depending on what the broker needs, addressing one of these areas will motivate agents to help with the referral, she says.
Reproduced from National Underwriter Edition, February 3, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.