Ideas For Recruiting During A Producer Shortage
Imagine James Montgomery Flaggs famous World War I recruiting poster; now replace Uncle Sam with an insurance company executive saying “I Want You!” This should give you a pretty clear picture of what the life insurance industry is facing with its current quest for qualified brokers.
Today there is a severe shortage of both career agents and independent producers.
Recent studies by LIMRA have shown the number of career agents in the insurance industry has been dropping steadily since 1975. The number of recruits contracted annually has dropped from more than 54,000 to fewer than 25,000.
This shortage comes, ironically, at a time when some 40 million “echo boomers”–children of baby boomers–are approaching the prime years for buying life insurance.
Furthermore, current producers are aging and likely heading toward retirement. The median age of producers in 1999 was 50, and the number of producers over 55 increased from 23% to 32% between 1996 and 1999, according to a study conducted jointly by LIMRA and the Falls Church, Va.-based National Association of Insurance and Financial Advisors.
As a result, top carriers have dramatically stepped up their efforts to recruit producers. In any recruiting effort, some strategies work better than others do. Here, in my opinion, are ideas that some companies are using to successfully recruit producers.
Good Products Attract Brokers. While trips to idyllic vacation spots are always a welcome inducement and benefit to recruiting, clearly the most important tool for recruiting effective producers is offering products that will sell well to their clients. After all, the more products producers sell, the stronger their agencys bottom line.
In todays marketplace, this means developing products with an eye toward changing consumer needs. The increasing popularity of universal life products is a perfect example. Americans, concerned that their retirement money will melt away in a down economy, are looking for certainty and flexibility. Cutting-edge carriers are offering products with built-in guarantees and options that enable policyholders to meet both anticipated and unexpected expenses.
Simplify The Process. Along with leading-edge products, insurance companies must also offer quick and accurate processing. To be successful at recruiting producers, carriers must wean themselves away from depending solely on traditional processes that are costly and tedious.
Too many companies remain entrenched with paper and postage, which is not only expensive, but serves as a disincentive to producers who know there are faster, smarter and easier ways to process business.
Agents are interested in writing new business and generating commissions, but many carriers today have focused their technology on off-loading administrative functions to their agents–creating a major disconnect.
Resourceful companies make the connection by offering a mix of processes that allow producers who are more comfortable with traditional methods to continue to work that way, but they also offer processes that more tech-savvy producers want–fully employing the power of the Internet and the growing array of Web-friendly tools (including laptops, PDAs, and smart phones).
Well-designed Internet processes can dramatically reduce the amount of time required for producers to process cases, freeing them to seek new prospects and generate more income. With the right Web-based processes, tasks that once took hours can be reduced to a few minutes, and the need to fill out paper forms and manage stacks of documents can practically be eliminated.
Internet-based processes can also dramatically reduce the amount of time involved in getting producers appointed. An effective online appointment process can be extremely attractive to distributors because there is no paperwork to process, and there are no state licenses to fax or mail. It also saves filing fees because the appointment process can be accomplished so rapidly in some states that it neednt be started until the business actually comes in.
Integrate Technology. Providing technology services in the field can also serve as a successful recruiting tool. If the carrier offers great processing, but not many distributors are utilizing it, whats the point? Technology specialists can work on-site with distributors to help them fully understand and integrate the processes a carrier offers, which can ultimately create great economic value for the distributor.
Telephone Support Can Be Invaluable. Along with online processes, teams of trained phone support specialists at the home office can further reduce the agents burden while increasing profitability both for producer and distributor. If the home office takes over the time-consuming task of gathering financial and medical information from applicants, producers become the beneficiaries of enormous amounts of time–time they can devote to marketing and sales.
Training is Vital. Another important element in the successful recruiting of producers is training. It is essential for distributors to be able to provide producers with programs that explain products and processes to agency staff and, more importantly, pass along sales ideas to inspire and encourage producers to generate more sales.
Recruiting Never Stops. Finally, a vital part of recruiting producers is recognizing that the process doesnt stop just because the producer is “on board.” The fact is producers are free to send their business anywhere, anytime, and they will, unless there is a strong and continuing incentive to place their business with a particular carrier. Therefore, winning companies focus on continually upgrading products and processes while emphasizing to their own staff the importance of being responsive to producers around the clock. The ultimate goal is to convert the low and sporadic producer into a high volume dynamo.
At the end of the day, a red, white and blue top hat isnt needed to recruit producers successfully. What is necessary is to employ a range of well-designed, well-executed strategies that will encourage producers to write more business, more often, and enable all partners in the relationship to generate more earnings and enjoy greater profits.
, CLU, ChFC, is president, life brokerage for Zurich Life, Schaumburg, Ill. He can be reached at [email protected].
Reproduced from National Underwriter Edition, March 17, 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.