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.