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Two Playbooks For Building A Successful Agency

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By Warren S. Hersch


Need an idea for keeping your agents happy and loyal? Consider hosting an all-expenses paid trip to Laguna Beach, Southern Californias premier seaside artist haven. And invite along the field forces immediate and extended family members.

The suggestion was one of a number of thought-provoking practices outlined during sessions of GAMA Internationals LAMP 2005 meeting, held here recently. The sessions speakers, including representatives from MassMutual Financial Group, Thrivent Financial for Lutherans and American National Insurance Company, described their organizations practices in the context of two studies published by GAMA Foundation. These were “Building the Right People” and its sequel, “Keeping the Right People,” which GAMA unveiled during the conference.

A recurring theme of the talks was the value of lending consistency to company processes. Since incorporating the GAMA Foundation recommendations, for example, the Twin Cities regional office of Thrivent Financial for Lutherans, Minneapolis, Minn., uses the same case study for illustrative purposes through all classroom instruction. Bill Reichwald, a managing partner for Thrivent, said the practice aids learning by giving agents a common point of reference.

Adopting a common approach to training, and to recruitment and joint field work, was also a top concern at Baystate Financial Services. David Porter, a managing partner for the Boston, Mass.-based affiliate of New Financial, said that only after implementing the workbooks recommendations did he realize how inconsistent were the practices among the firms 10 New England-wide district offices, and the potential for performance gains.

“We garnered almost $19 million in commissions last year, up from $1 million when I arrived at the company in 1996,” said Porter. “To think that you could have that kind of growth and not be on the same page was alarming.”

Before arriving at this conclusion, Porter completed the workbooks exercises alone. He thereafter had each of his district managers do the same, then meet as a group to consolidate answers, identify inconsistencies and decide on best practices to be used region-wide.

The performance improvements, implemented over two months, yielded a 37% increase in commissions, or an additional $3.9 million, in 2004, the largest gain Baystate Financial has achieved in the last five years. Porter credited the rise entirely to regularization of company procedures.

He noted, too, that he had less difficulty securing buy-in for the changes from the firms attorneys and sales support staff than he did from district managers and agents. The reason: The former had a greater incentive to cooperate in the restructuring because the pay of each is based on a percentage of company profits (and, hence, inking insurance contracts). Among the advisors, some lent greater emphasis to planning and fees for services, whereas others focused more on product sales and commissions.

While the GAMA Foundation studies gave impetus to new initiatives, they also helped to validate or strengthen existing practices. Reichwald, for example, pointed to Thrivents formerly ad-hoc mentoring program; the company now has a formal and more rigorous initiative run in collaboration with the Million Dollar Round Table.

Among other requirements, the company tracks a host of variables bearing on agent performance (number of new clients, referrals, appointments, etc., secured over a given period) then submits monthly reports to MDRT. Agents who meet prescribed benchmarks get to attend MDRT conferences for 80% of the commissions required of MDRT members.

New agents also are encouraged to begin coursework leading to an insurance-related educational designation within the first year after being hired. That, observed Reichwald, produces multiple benefits.

“When you learn something in class or study for an exam, you use that newly acquired knowledge within days in the field,” he said. “That leads to better advice for clients and greater self-confidence for the advisor. Also, you build camaraderie by attending courses with other people who are at your stage in the business.”

Such friendships, and a supportive corporate culture, will help sustain advisors not only through their first difficult years on the job but also win their loyalty for the long haul, according to speakers at sessions on “Keeping the Right People.”

Ken Gallacher and Thresa Cochran, respectively regional director and associate regional director of the Great Basin region for American National, a Las Vegas-based multiline carrier, noted that development of a family atmosphere is a component of the companys retention strategy. To that end, the firm regularly hosts trips for agents and their families.

American National also helps mid-level producers achieve higher sales by connecting them to top producers, by aggressively publicizing the companys support services and by spending more time listening to their concerns.

“Many mid-level agents dont become top producers because they just focus on plugging along,” said Cochran. “Especially in the multiline business, we have to ensure they dont feel neglected and contemplate leaving the firm.”

Added Peter Novak, a general agent for Springfield, Mass.-based MassMutual: “Agents almost never leave because of the money, but because they feel they didnt get the personal attention, support and services they need. Its easier to provide these when the organization is small. But when you get large, you need to put people and systems in place to do the job right.”

Reproduced from National Underwriter Edition, March 25, 2005. Copyright 2005 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.


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