As the economic recovery continues, albeit uncertainly, companies are revisiting plans to appoint independent agents to meet pent-up demand for life insurance products and financial services. But the question is, are they actually recruiting?
The picture is decidedly mixed. Some insurance executives interviewed by National Underwriter, including those at brokerage general agents, independent marketing organizations and carriers that sell through independent agents, are proceeding apace to beef up their ranks of producers. Others, however, insist that recruitment remains depressed because of uncertainty about the strength of the rebound in the wake of the Great Recession.
Representative of the latter is Howard Stern, a brokerage manager at Selario Agency, Pittsburgh, Pa. In his view, the chain of cause-and-effect is clear: Fewer people are able to buy insurance products in the current economy, which means fewer agents can sustain a viable practice.
“The economy has absolutely impacted my business.” says Stern. “My activity level this summer has dropped off in terms of income calls and quote requests from agents. That’s why I’m now looking beyond life producers to expand our market.”
Tom Rivers, an insurance recruitment specialist at Summit Search Group, Vancouver, B.C., believes that recruiters themselves are holding back. While observing an uptick in sales activity in the independent channel, he notes that many companies remain cautious about hiring. The candidate vetting process often takes three months or longer before a firm will agree to ink a contract with a new producer.
“There is a continuation of the trends that I observed during the downturn,” says Rivers, noting that recruiters are taking a long time to make decisions because they are fearful of making mistakes.
“Whereas in earlier years, a producer might be interviewed by one manager, now they’re talking to two or three,” Rivers says. “The delays and heightened scrutiny of candidates represents an opportunity for firms that are prepared to recruit more aggressively.”
Case in point: BGA Insurance Services. The Newport Beach, Calif.-based brokerage-general agency boasts some 300 active producers, most of whom market solutions–life, long-term care, disability income and annuity products–to an affluent clientele requiring advanced planning.
The agents under contract are nearly triple the number the company employed only a year ago. To boost its ranks, says BGA president Barry Zimmermann, the company increased its home office staff (including recruiters) to 20 from nine. And it ratcheted up outreach efforts.
These include weekly “lunch-and-learn” events the BGA hosts to help acquaint advisors with the company’s services. BGA also relies on referrals from affiliated producers, cold-calls, e-mail blasts and direct mail, as well as new social media tools, to generate producer leads.
“We’re using Facebook and Twitter as part of our outreach,” says Zimmermann. “The results up to this point aren’t much to measure. But these online tools help to increase our brand awareness.”
The company is betting that a new compensation structure for its home office employees, begun this year, will aid in the marketing effort. Shawn Bragdon, a senior vice president and partner of Zimmermann, adds that BGA now ties a portion of its staff’s compensation to production. They get paid when cases are completed.
To meet his own agency recruiting goals, Selario’s Stern says he leverages techniques employed by BGA. And he’s marketing to more than independent life agents: P&C agents, CPAs and attorneys who are licensed to sell life products now are among the 150 to 200 active producers affiliated with the company. To help attract these non-traditional reps, Stern is planning to roll out a turnkey marketing initiative this year.
The program features a website offering client prospects online tools to facilitate sales–a needs analysis, product quotes and insurance request form–and that producers can private-label for their own practice.
“The aim here is to offer the non-traditional agent a low-cost way to secure new life business,” says Stern. “A lot of these producers don’t do these apps because they’re not oriented to life products.”