For many years, the life insurance industry has grappled with a long-standing problem of recruiting and retaining new young talent, and 2003 proved no different. Through the first 6 months of 2003, the number of inexperienced recruits increased by only 1%, according to a recent report from LIMRA International.
In response to the situation, companies are exploring different approaches and perspectives. For instance, some feel that in order to increase recruiting, the industry needs to reposition the career a little differently than it has in the past.
Rather than focus on how a new agent can help people accumulate and transfer wealth, a big area of opportunity is in cash flow managementthe orderly liquidation of assets throughout retirement, says Doug French, global director of Ernst & Youngs insurance and actuarial advisory services, New York.
“Cash flow management is not a simple solution for people,” he explains. “Its going to be sold face to face, and its going to be heavily advice-driven.”
French feels this is an area companies should be recruiting to. Carriers need to build a field force focused on an advisory relationship where theyre working with clients for 30 to 35 years throughout retirement, he explains.
“Theres a big opportunity for those who get there early and start working on it now,” French says.
But others feel that to motivate people to get into the business, carriers need to appeal to an individuals desire to help other people. “I think weve lost our religion,” says David Woods, CEO of the National Association of Insurance and Financial Advisors, Falls Church, Va.
“We dont recruit to the passion. We dont recruit to the fact that young people are idealistic, and they want to do something good with their lives,” he explains.
“I came into the business, and a lot of people came into the business to help people, to do something to play a meaningful part in the lives of other people,” he says. “We dont recruit that way anymore.”
Instead, a lot of the industrys focus has been on selling certain products to meet specific needs, and a lot of attention has been placed on commissions and payouts, says William J. Cuff, vice president of recruiting, selection, training and management development for MetLife, New York. “Thats something that has hurt recruiting for the entire industry.”
Over the past year, MetLife has refocused its recruiting efforts to “return to the philosophy” of helping people. Cuff has worked with his agency management team to change their recruiting strategy. MetLife will now focus more on actively recruiting quality recruits, putting more emphasis on retention of the agent, he says.
As a result of this refocus, there was a drop in the number of agents MetLife recruited in 2003, but Cuff expected this and adds that the company already is experiencing improvement in its one-year retention. “This year and going forward to 2004, theres less focus on the number of new hireswere more focused on the quality of the individual and the retention of those producers,” he says.
At Guardian Life Insurance Company, there was an estimated 5%-6% drop in recruiting this year, but that is coming off a record-setting year in 2002, explains Thomas Slack, vice president individual markets for Guardian, New York. Slack adds that even with a decline in recruits, he is very pleased with this years results.
Slack notes that based on the increased activity on its Web sites, the number of interviews its managers are conducting and the number of candidates in the pre-contract process, 2004 has the potential to beat the companys record numbers set in 2002. Slack adds that 2003 was a record year for general agent appointments, so its capacity to hire new agents will be greater in 2004.
New York Life estimates its recruiting efforts to be 3% over last year. Of those new recruits, 80-85% of them are new to the business, says Michael Burson, vice president, agency department at New York Life, New York.
Looking ahead, Burson is optimistic about 2004s recruiting prospects, but he doesnt attribute a turnaround in the economy as a driving factor. “The economy doesnt really make a difference,” he says. “If you have the right opportunity for the right people, theyll make the right decision.”
Burson says New York Life also has increased its capacity to hire new recruits, by adding 30 more agency managers over the past year. “It all starts out with quality managers,” he says.
Fundamentally, the formula for successful recruiting and retention hasnt changed for 40 years, says Maury Stewart, a former general agent now an executive consultant in Philadelphia.
The formula Stewart used and has seen in place in successful agencies involves getting back to the fundamentals. Career agencies must have a marketing and sales process, as well as some type of mentoring program. General agents must develop arrangements between new and experienced producers, so the new agent will learn early on the right things to do, he says.
“Its a combination of factors,” adds Cuff. “It begins with recruiting the right type of candidate. Once you bring them aboard, its about training, coaching and mentoring.”
Companies are keying in on these fundamentals and making them part of their value proposition to new recruits.
At Guardian, rather than recruit inexperienced producers, get them licensed and throw a phone book at them expecting them to make 300 calls a day, the company offers new agents an opportunity to be part of a sales team in an advanced marketing firm business model, Slack explains. For new agents, this includes an agent contract that is salaried, rather than based solely on commissions. “Career changers are very leery about a commissioned sales opportunity,” he says. “Our contract provides some financial stability, compared to a typical financing program.”
New York Life puts a great deal of emphasis on the idea of “being in business for yourself, not by yourself,” and supporting that theme through the mentoring opportunity available to new agents. The program New York Life uses was designed and promoted by GAMA International and the Million Dollar Round Table. “We have over 1,350 mentoring teams at New York Life,” says Burson. “When we bring someone new into the industry, we do a lot of hand holding and helping through the MDRT mentoring program.”
Reproduced from National Underwriter Life & Health/Financial Services Edition, December 19, 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.