A new report suggests the insurance industry is doing a poor job recruiting rookies, and that may be near impossible to change, say industry veterans
AM Best’s latest quarterly report on the insurance industry is critical of the sector’s recruiting efforts among young Canadians – a failure with long-term ramifications for customers.
According to the credit rating agency’s survey less than 20% of advisors in the US are 44 years of age or younger. Even more damaging to the industry’s brand is that 63% of life advisors are over the age of 50, according to the findings.
Many reasons are given by survey respondents for a lack of younger advisors. They run the gamut from being too boring to lacking diversity to not being entrepreneurial enough. While the survey is American the same experience exists here in Canada.
“From my own observation it would seem that many [young people] with whom I have spoken want to be paid to learn, which is not the way of the business,” wrote Lawrence Geller, president of Geller Insurance Agencies Ltd. “After the first few months they want to have decision-making ability and the right to determine how, when and what they sell, and how and when they deal with clients (not their clients, but those of the firm they want to employ and pay them).”
It seems that many young people have little or no desire to sell products and/or services to their friends and circles of influence. Technology could have something to do with this apprehension. One need look no farther than millennials gravitating to robo-advisors to understand they’re far more comfortable with technology and much less capable in terms of the soft skills associated with sales.
“It would seem that there is a problem [from young people] with the need to solicit people to become clients,” Geller reflected. “Many whom I have talked with about coming into the business see that process [sales] as being somewhat below their standards.”
It’s not that millennials can’t sell, it’s just that they don’t want to which makes the recruitment of this demographic that much harder.
What can be done alleviate this problem?
Geller has five suggestions that he believes will go a long way to ensuring there are enough insurance agents filling the pipeline in the future.
Whether any of this happens could be the difference between a thriving industry in the future and one in decline. The choice is in the hands of advisors.
According to the credit rating agency’s survey less than 20% of advisors in the US are 44 years of age or younger. Even more damaging to the industry’s brand is that 63% of life advisors are over the age of 50, according to the findings.
Many reasons are given by survey respondents for a lack of younger advisors. They run the gamut from being too boring to lacking diversity to not being entrepreneurial enough. While the survey is American the same experience exists here in Canada.
“From my own observation it would seem that many [young people] with whom I have spoken want to be paid to learn, which is not the way of the business,” wrote Lawrence Geller, president of Geller Insurance Agencies Ltd. “After the first few months they want to have decision-making ability and the right to determine how, when and what they sell, and how and when they deal with clients (not their clients, but those of the firm they want to employ and pay them).”
It seems that many young people have little or no desire to sell products and/or services to their friends and circles of influence. Technology could have something to do with this apprehension. One need look no farther than millennials gravitating to robo-advisors to understand they’re far more comfortable with technology and much less capable in terms of the soft skills associated with sales.
“It would seem that there is a problem [from young people] with the need to solicit people to become clients,” Geller reflected. “Many whom I have talked with about coming into the business see that process [sales] as being somewhat below their standards.”
It’s not that millennials can’t sell, it’s just that they don’t want to which makes the recruitment of this demographic that much harder.
What can be done alleviate this problem?
Geller has five suggestions that he believes will go a long way to ensuring there are enough insurance agents filling the pipeline in the future.
- It would seem that an apprenticeship-type program would please this generation.
- It would likely be necessary for there to be a series of college or university level programs and possibly degrees that led to an apprenticeship program described above including the qualification for and issuance of a licence.
- To be widely attractive to small business owners (agency owners) there would likely have to be some tax-advantaged way of paying the apprentice.
- Companies and MGAs would likely have to assist in the provision of ongoing sales and marketing training as Advocis seems to have entirely discarded those programs. Case in point – there used to be a multi-year LUATC for Life Underwriters.
- There would have to be marketing done promoting entry into the profession. This would generally be the domain of an industry association but neither Advocis nor IFB seem to have any interest in promoting entry into the profession, with Advocis seemingly more intent on becoming an SRO than an advocacy group.
Whether any of this happens could be the difference between a thriving industry in the future and one in decline. The choice is in the hands of advisors.
