If you’re looking for a sure-fire way to build a successful insurance practice, boost the retention rate among new recruits and cultivate future leaders for your business, then you would do well to institute a mentoring program for producers. That was a key message of a panel discussion at GAMA International’s 2009 LAMP conference, held here last month.
“For our agency, mentoring offers the fastest and most effective way to grow our firm and our agents,” said Edward Deutschlander, a managing partner at North Star Resource Group, Minneapolis, Minn. “The best way to learn is to associate oneself with an experienced professional who has been to the top of the mountain. Mentoring is a big part of our culture.”
One reason, he added, is results. The 4-year retention rate at Deutschlander’s firm is 41%, well above the industry average. Shaun McDuffee, a senior vice president at North Star Resource Group, said mentoring has “doubled” and “tripled” his agency’s production by enabling “aspirants” (the agents being mentored) to get in front of more of the right prospects.
Kenneth Gallacher, a regional director at the multi-line insurer American National Insurance Company, Las Vegas, Nev., added that mentoring “significantly” boosted sales for his firm. His agency’s 28 agents collectively sell more than $1 million in life insurance premiums and over $5 million in securities and annuities annually.
The program, he added, has allowed otherwise “detached” agents–the multi-line producers all work independently at separate offices–to regularly come together to share best practices, experiences and challenges with specific cases, and to bond with one another. One result is an increase in agent morale and performance, as measured by a rise in referrals and sales. (Agents and mentors typically split commissions 50-50 when doing joint-work.) The program has also “reenergized” the firm’s mentors.
“Mentoring helped to develop to the mentors’ own skills and confidence,” said Gallacher. “And it’s helped our older agents to feel good about themselves because they’re leaving a legacy. That’s one thing I didn’t expect.”
The success of a mentoring initiative, the panelists agreed, depends not only on the quality of the program, but also on the character of the participants. McDuffee said that North Star’s aspirants must be “coachable.” He thus prizes college graduates who have an athletic or sports background because these recruits tend to be go-getters and have experience working as part of a team. The same qualities, he added, apply to interns.
“In recent years, we dramatically increased the level of screening for interns,” he said. “We need to make sure they’ll qualify for a full-time position. So anyone who enters our agency as an intern is in fact someone we would be ready to hire as an associate. We’re not in a position to lower our standards.”
Deutschlander said he looks for in recruits three “E’s”: high energy, ethics and enthusiasm. These qualities are needed, he noted, because of the significant effort required of recruits who are, in effect, starting their own businesses. And as entrepreneurs, they must expect to work longer than normal hours during the early years of their careers. So long as they follow the company program, he said, success is nearly assured.
Prospective mentors, Deutschlander added, must be motivated by the right reasons: because they want to serve in a leadership capacity and be part of something bigger than themselves; are caring and giving by nature; and because they truly desire to help aspirants develop own practices. Those veteran producers who aspire to become mentors purely for financial reasons won’t, he said, be a good fit for the program.
“These advisors would probably be better served focusing on their own practices,” said Deutschlander. “Their effective hourly rate will probably decline because the target market of the aspirants may not be at the mentor’s own level. Also, not everyone is cut out to be a mentor.”
To be successful, the panelists said, careful thought must also be given to how a mentoring program is structured. Mentoring-aspirant relationships often fail, observed McDuffee, when aspirants take their mentors to see “junk:” prospective clients who were not sufficiently qualified in advance. To sidestep this pitfall, recruits have to be taught how to get introductions to prospects who meet the mentor’s target profile.
Gallacher added that a mentoring program should also be formalized. To that end, he counseled establishing (as he has at his firm) specific production requirements for aspiring mentors; a reporting system to track the progress of a mentor-aspirant relationship; an hourly schedule identifying when mentor and aspirant are to meet; and a stipend for mentors, which, he noted, encourages them to be more accountable to superiors.
To develop effective working relationships, mentor and aspirant need not work in the same office. McDuffee, who works from his firm’s Austin, Tex.-based office, says he conducts mentoring with aspirants located in Portland, Oregon, as well as Chicago and Phoenix. The key to making these long-distance relationships work, he said, is to leverage a range of communications and reporting systems, including online web-ex presentations, video and audio conferencing, and e-mail.
Also advisable, added McDuffee, is to structure the program so as to not only advance the professional development of aspirants, but also of the mentors, who should be cultivated to become leaders and managers within their organizations.
“The biggest mistake I made early in our program was not to develop leaders–people with a desire to run their own division,” said McDuffee. “If you’re going to grow a business, you have to have people who are developing mini versions of your company within the company.”
Still other best practices, the panelists said, are to limit the number of aspirants per mentor to three and to institute a training and supervisory system for mentors. At Deutschlander’s agency, the mentor is tutored by a division leader, who in turn is mentored by an executive leadership team.
Also critically important, said panelists, is good personal chemistry between the mentor and aspirant. To that end, mentors have to agree to those individuals they will oversee.
“Our mentors always have the final say about whom they’re going to mentor,” said McDuffee. “If I don’t have a good working relationship with the aspirant, I won’t be putting in the necessary effort. Plus, there’s an added layer of accountability, as I’m not going to allow that individual to fail.”