Graduating from college is always a bittersweet experience; with the satisfaction of earning one’s degree comes the reality of starting a career. That transition has been an especially challenging one for current grads, as they face a job market still wobbly from the Great Recession. But for those who have spent their last four years earning a degree in insurance and risk management–which is itself a relatively new course of study that makes insurance a career path one can prepare for rather than fall into–things are a little different. Although tomorrow’s talent still have to fight to find a place for themselves in the professional world, they do so while the life insurance industry is experiencing a serious need for new faces.
According to a recent LIMRA study, the life insurance industry has focused most of its growth over the last decade on increasing productivity in an already trained, already employed sales force. This makes sense when the economic belt is tightened, as devoting time and resources to acquiring and retaining new talent may not be the most prudent strategy for a company that is focused on short-term profits and a strong balance sheet. But as is often the case, when one focuses on what is two steps in front of them they can easily neglect to see the busy intersection blocks ahead. The median age of a career agent is 56, the median age is 52 for an independent agent; 51, for a full-service broker; 53, for an independent broker-dealer; and 52, for an independent financial advisor. With the first baby boomers turning 65 this year, and their insurance advisors not far behind them, the industry’s recruitment practices have come into question. The current trend is clearly unsustainable, but insurers will point out that they are adapting.
Greg Winsper, managing director, practice development, for Penn Mutual, says that the aging workforce is increasingly becoming a concern that has the potential to have devastating effects on the life industry. As a result, his company is very active on college campuses when it comes to recruiting new talent. According to Winsper, Penn Mutual does not necessarily go after students that are leaving universities with big RMI or actuarial service programs but rather Winsper looks for well-rounded students with an eagerness for opportunity and a devotion to the entrepreneurial spirit. Winsper admits that most insurance companies were a little late in understanding that they need to bring in young talent; he acknowledged that Penn Mutual itself was not very active on college campuses until 2008. However, Winsper sees huge opportunities when it comes to getting students interested in a career in life insurance. “When you look at life insurance specifically, students like the community involvement, it feels right to them and the fact that we are a mutual, well, that dovetails with a lot if their values which are very team-oriented and relationship-based.”
Robert E. Hoyt, Moore Chair and Professor of Risk Management and Insurance Department Head, Terry College of Business, at the University of Georgia, believes that insurance companies are beginning to get the message. He said insurers are significant recruiters of his students. Although underwriting positions seem to be the most common, he said there has been a steady increase from insurers recruiting students for group sales. Close to 80% of graduates at UGA have completed an internship prior to graduation, and he believes that insurers are quite keen on using the information gleaned during their internships to identify attractive students to fill needed positions. “We have seen this strategy being used more aggressively by several carriers in recent years, students who have had internships are often more attractive to insurers, even if the internship was not at an insurance company. The students have a better sense for business and employers like that,” said Hoyt.
The pressure cannot be just on insurers to get young people excited about the field, however. UGA does a lot to pique student’s interest in the profession. “Our business model is to reach students in their introductory courses and make them aware of the many opportunities that exist in the risk management and insurance field.” There is reason to be optimistic on the part of insurers: UGA is graduating the largest number of students per year in any RMI program in the U.S. and they anticipate the numbers getting stronger, if insurance companies continue to engage and employ students from these programs that will only lead the to the field becoming even more strong statistically to prospective students.
Some responsibility can only be put on the shoulders of insurance companies, and a prime example of one is the serious issue that insurance companies have when it comes to their image. Of course there are various external factors that have contributed to a negative image of the world of life insurance, but image rebranding cannot be done by anyone other than the industry and it needs to be done expeditiously.
“I was a little apprehensive about entering the insurance field out of college, because with a degree in finance, it is not considered one of the better fields to work in” said one recent college graduate working for Prudential who wished to remain anonymous. “The image of a life insurance salesman knocking on a family’s door and interrupting dinner is one that is hard to shake.” Therein lies part of the problem; it would greatly benefit insurance companies if they were able to capitalize on the distinction, that the product that they are selling is not just another commodity like a vacuum or a bible, but rather a valuable financial tool that can be utilized to secure the fiscal strength of a family in a time of need.
In the LIMRA’s 2007 report, Competing for Sales Talent, life insurance is viewed as “boring” or likened it to “that obnoxious guy from Groundhog Day.” The industry must realize that they can do many things, up to and including having a serious presence at college campuses across the country as well as through social media, but it will be exceedingly hard to attract to new talent if the industry is seen as being saturated with older people who employ antiquated sales tactics. However, when that same recent college graduate started working at Prudential some of those myths were laid to rest on their own volition. “There is definitely a young presence in the company; along with the colleagues in my department, I can see across the company an influx of Gen X and Millennials.” Though logic and truth work against the stereotypes that are prevalent it is not a prudent nor offensive tactic to have them debunkedonly after an employee signs with a company and enters the workplace. There needs to be a concentrated effort to separate myth from actuality in the psyche of the general public, especially young people who could be potential assets to the industry.
D.R. Drennan, associate professor and chairman of the Department of Risk, Insurance and Healthcare Management at Temple University’s Fox School of Business, said that insurers are keen on hiring students out of the university’s actuarial science program, while students graduating from the school’s RMI program aremore likely to be hired by consultants he was cautious to say that this was not “by design” but rather just the manner in which things played out. Insurers who capitalize on schools with established RMI and actuarial science programs have the luxury of dealing with students who, by dint of their major, have already made a conscious decision to work in the insurance industry. He went on to say how the companies that recruit at Temple and other schools with established RMI programs “get it” because the understanding of the field is there and the stereotypes of the industry are not present as they are with the general student body.
“If they were just recruiting random college students a career in the insurance field would be a very tough sell,” Drennan said. “I deal with 18-20 year-old students daily, and I know what their impressions are of the insurance industry and it is just limited. Their only exposure is auto insurance, so they don’t see all the possibilities out there that they can do.”
Temple uses its Intro to Risk Management course to expose students to career opportunities in the RMI and insurance fields and then gets them to join the RMI program as their major which is usually coupled with another major such as finance. Most of Temple’s students who go on to careers in the industry do very well due to the age gap that was caused by lack of college recruitment in past years.
So, where does this leave the industry this spring? When looking at the current workforce in the field, one can only draw the conclusion that it has to be revitalized and populated with younger people to keep it relevant and even operational. The insurance industry has to make up for lost time that was spent on trying to increase productivity in its existing workforce rather than recruiting and training a new workforce. Insurers would be wise to increase their presence on schools with established RMI programs as well as schools with basic business administration degrees. The students that are graduating this spring value stability; they want to work for a company that is in an industry that is not going to become obsolete 10 or 15 years down the road. The insurance industry has a venerable past, the impetus is now on them to make that past an asset without seeming like they are stuck in it. The industry leaders of tomorrow are ready. Is the industry?