Brokers' Big Problem Needs Big Solution
By Linda Koco
PHOENIX - The life insurance industry needs to launch a large-scale effort to attract more producers to the business, said NAILBA Chairwoman Christi M. Daughenbaugh.
“The decline in producer ranks is a big problem, so it needs a big solution,” she told InsuranceNewsNet in advance of her remarks here at Thursday morning’s opening session of the NAILBA 30 annual meeting.
One idea that she and other industry leaders have is to set up some kind of industry-wide on-ramp or feeder system to attract, train and support new producers, perhaps a 503(c) organization or a private company with investors and an industry-wide board of directors.
“We need a major initiative that is almost like a residency program in risk management that would run for two or three years,” said Daughenbaugh, who is chief operating officer at Borden Hamman Agency, a Dallas brokerage general agency.
The program would need to provide recruits with three components — compensation, training and a community of peers with whom to share ideas and support, she said.
All three elements are essential to helping new producers gain the experience they need to move along their chosen career path, Daughenbaugh maintained, adding that is what it will take to ensure that younger and mid-market Americans will have the life insurance protection they need.
The old-line career agency companies used to be the life insurance industry’s hub for training and manufacturing producers, she pointed out.
“But there are fewer career companies today, and the independent agency companies did not pick up that training and support. In addition, estimates are that the industry lost more than 100,000 producers in the past 10 years, and more will be leaving since the average age of current producers is in the mid-50s. “The result is, we just don’t have enough feet on the street.”
During her time as NAILBA officer and this year as NAILBA chairman, Daughenbaugh said she has spoken with many other industry and association leaders about the shrinking ranks of producers. She says many leaders are arriving at the same conclusion, that some kind of industry-wide solution is needed.
Individual companies do have recruiting and training programs, and some companies might report life insurance sales increases in one quarter or another, Daughenbaugh allows. “But as an industry, we still don’t have enough new people coming in—people who will go out and talk with consumers about life insurance.”
The industry does have many education and certification programs, she adds. But the programs tend to be designed for people who are already in the business, not for producers who are starting out, she said. “In addition, the programs don’t offer a compensation commensurate with what someone needs to build a business, nor do they have a community component.”
It will take more than one organization to solve the industry’s problem, she reiterated. “To have industry-wide impact, we’ve got to go bigger. It can’t be one carrier, one trade association or one marketing organization. We need to have a new theater system for this.”
Reaching younger people
Along with that, the industry needs to step up efforts to reach younger people—producers as well as consumers, especially Generation Y — in a way that they want to be reached, the NAILBA chairman said.
For instance, Gen Y likes to be coached, not advised, Daughenbaugh said.
She pointed to a State Farm project in Chicago that has picked up on that preference. Called Next Door, the project invites consumers to visit its “community space” where they can ask questions about finances and insurance, get “financial coaching,” attend classes, drink coffee, use the Wi-Fi, and otherwise hang out.
“The financial coaches don’t sell anything,” she says. “They only coach. If a visitor wants to buy insurance, they hand the lead off to a State Farm agent.”
On the day she visited Next Door, she says it was “packed with people ages 30 to 35 and also people who looked to be in their 40s.”
She liked what she saw. “It shows there are things we can do to update the language we use with young people and the way we interact with young people. There are things we can do now for the consumers and sales people of the future.”
Linda Koco, MBA, is a contributing editor to InsuranceNewsNet, specializing in life insurance, annuities and income planning. Linda can be reached at [email protected].
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