Gen Y Producers Want To Be Entrepreneurs

November 18, 2011

Gen Y Producers Want To Be Entrepreneurs

By Linda Koco

PHOENIX – To attract Generation Y into life and annuity production, the insurance industry — including brokerage general agencies — will need to make some adjustments, says Maria Umbach, managing principal-insurance and financial services at Maddock Douglas.

Research that her Illinois firm conducted for Million Dollar Round Table (MDRT) found that this generation doesn’t identify with the idea of being insurance agents, Umbach said during a morning workshop today at the 30th annual meeting of National Association of Independent Life Brokerage Agencies (NAILBA).

“Instead, Generation Y producers are, in general, wired to be entrepreneurs,” she told InsuranceNewsNet in an interview before the workshop.

They are what MDRT is calling “young lions.”

“The young lions want to be heard and to be understood,” said MDRT President Jennifer Borislow in commenting on the survey findings. InsuranceNewsNet also interviewed her before the workshop.

“They want to get there (to running their own businesses) faster than did today’s older producers. They want to grow their business and achieve success, which for them includes balance.”

That is important knowledge to have and to share with the industry, added Borislow, who is founder and principal of Borislow Insurance, Methuen, Mass.

“It makes for better informed insurance recruiting and for better working relationships with existing producers. … It can help BGAs and insurance marketing organizations grow their businesses, too.”

Not novices

“These aren’t novices,” Umbach pointed out.

For instance, the mean age of the young lions in the MDRT study was 39. Forty percent were women, and 48 percent have children in the home.  Sixty-three percent qualify for MDRT.

Less of the young lions’ income comes from life insurance compared to other producer segments, and more is coming from investments, she added. A surprising 32 percent are certified financial planners — a larger percentage than other demographic segments in the MDRT study, says Umbach.

These are people who know what they want, the researcher said.

“For them, it’s social first and media second. They are addicted to networking, personal development and spending a lot of time on prospecting. They read more of what consumers read about finance versus the insurance industry publications, and they are far more likely than other segments to use social media—primarily Facebook.”

Where business is concerned, Umbach said young lions want to hear from people who know more than they do, because they believe this will help them grow their businesses.

They want to know

Young lions have a laundry list of business topics they want to know about.

Not surprisingly, the top three topics they named in the MDRT survey are the same ones that are dear to the hearts of insurance producers of any age. These are: sales ideas (79 percent), filling the prospect pipeline (77 percent), and branding and marketing of the business (71 percent).

But after that come topics that Umbach says reveal the young lions’ strong interest in running and growing their own businesses.  

For instance, the young lions said they are also interested in profitability and return on investment analysis and strategy (71 percent), business expansion via other products and services (71 percent), creating a blueprint for growth or business plan (68 percent), and business valuation/succession planning (65 percent).

Other interests include hiring, staffing and training, leveraging technology, establishing business mission and vision, risk management strategies, employee incentives and motivation, sub-producer recruiting and training, and time management.

Fifty-eight percent expressed interest in achieving work-life balance.

By comparison, older baby boomer producers did not start out with business ownership in mind, Umbach says. “Many entered the business as young career or captive agents. They were told, ‘here is the path; get on it.’ And that’s what they did.” It was a feet-on-the-street approach to sales.

Business development often came later in the boomers’ careers. The work often centered on face-to-face meetings with customers, though some did take advantage of the internet and other emerging technologies. Few boomers have adopted social media approaches, however.

There is a gap between the young lions and their boomer elders, Umbach summed up. “If we don’t close the gap, the young lions may decide to do something else, in another industry or in another part of the insurance industry,” she cautioned.

Given the shrinking and aging of the producer forces in the life insurance industry, that could create serious problems for the industry, Umbach said.

Provide entrepreneurship education

One way to help close the gap is to provide the entrepreneurship information and education that many Generation Y producers are seeking, she said.

“You would think it’s already there, in the industry’s existing education and certification programs or other educational resources. But the majority of what is taught is around making the sale and not around developing the business.”

Maybe this education is there, Umbach allowed, but “perhaps it’s not set up in a way that is engaging to them or in a way that enables them to connect with someone who has already built a business.”

The data in the MDRT survey represents an opportunity, Umbach concluded. “It’s an opportunity to up the game and…to view young lions as budding business owners and not budding sales people.”

Heeding the data can make a difference.

For example, MDRT President Borislow says that when MDRT commissioned its producer study, “we wanted to understand what it would take to grow membership in North America, to find out why some agents let their memberships lapse, and to learn what future members want.”

The findings were “enlightening,” she says. MDRT made several changes in response and the result was that MDRT has now not only reversed the decline in its North American membership and but has also started to attract new, younger members.

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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