Like so much of the insurance business, product distribution is evolving. New channels are coming into play, and traditional ones are changing in profound ways. Amid this change, the career agency system finds itself holding an ever-shrinking slice of the pie. This raises a thorny question: As the career agency system shrinks, who will develop tomorrows producers?
Conventional wisdom has long held that insurance producers begin their careers as “captive agents,” committed to one company that, in turn, accepts the responsibility of professionally developing the new agent. Only later, after developing core skills and knowledge, would some agents make the personal decision to become an independent producer. In return for the independence to write business with any company, brokers gave up the right to expect home office-provided training and development support.
What would happen if the career system could not keep up with the demand to develop new producers? That is the issue facing our industry today, as more and more companies turn to non-career distribution channels. The new dynamics of product distribution requires a new way of looking at how our industry develops the producers of tomorrow. The answer seems clear enough–companies that use independent distribution channels must step up to fill the gap.
As more insurers turn to independent distribution channels, the competition for business from the independent producer is certain to heat up. Companies will look for ways to distinguish themselves. Competitive rates and commissions are important, but companies will look for ways to offer more. Some companies are discovering that supporting the producers need for training and education is one way.
More Training Is Needed. It is not a question of the need for training and education, but rather, who should provide it. The need for producer training education is irrefutable for several reasons:
There continues to be a need for human involvement in the sale of insurance. The Internet has not replaced the professional insurance producer in the sale of advanced life and health insurance products, and seems unlikely to do so for the foreseeable future. As long as life insurance remains a product that is “sold, not bought,” our industry will need knowledgeable people to do the selling. These people must be trained and educated.
Insurance is a complex subject that is continually evolving in response to product, political, regulatory and tax law changes.
Its the law. Virtually all states today require resident and, in some cases, nonresident producers (whether agent or broker) to keep up with continuing education requirements. The penalty for failure to comply may result in license forfeiture.
Career agency companies figured out long ago that good training builds loyalty as it develops successful producers. Done right, an insurers producer training program can even reduce its exposure to some degree of producer liability.
Producers, certainly new ones, feel the need for training and education. They may not know what they need, but whether its to strengthen a skill, learn a new product line or comply with a CE law, they know they need something. The company that meets that need is going to grab a producers attention.
Heres an opportunity to add value to the business relationship between company and broker, and at the same time help fulfill the industrys obligation to train and educate those who would sell its complex products and services.