Avoid the steamroller

DEALING WITH THE ONCOMING WAVE OF AGENCY RETIREMENTS IS LIKE GETTING RUN OVER BY A STEAMROLLER: YOU KNOW IT WILL HAPPEN IF YOU DON'T MOVE, BUT IT'S OCCURING SO SLOWLY YOU THINK THERE IS TIME TO ESCAPE. LEARN HOW TRADE ASSOCIATIONS AND THEIR YOUNG MEMBERS ATTRACT, RECRUIT AND RETAIN THE NEXT GENERATION OF AGENCY PROFESSIONALS.

By now, if s no surprise to anyone that we're in dire need of new blood in the insurance industry. Although we continuously cite the average age of an agency principal as 55, those birthdays keep coming, and that average age creeps up every year. According to a recent study of more than 3,000 insurance and risk management professionals by the National Alliance Research Academy, the average age of a non-retired industry professional is 56. And although 59 percent said they plan to continue working parttime after retiring, 41 percent claim they will retire from all forms of employment by age 66. This gives the industry 14 years to prepare for the departure of an entire generation of seasoned insurance professionals. The Affiance survey reports that 87 percent of respondents have more than 20 years of industry experience - a resource that will be gone in a little over a decade.

Luckily, that resource is renewable-if we do some smart planning right now. Until recently, the industry's reaction to this oncoming juggernaut has been to pretly much keep doing things the way it always has. Although most producer trade associations have long-standing programs targeting younger agents, the term "young" was often pretty relative.

But as Gen Y grows into an increasing presence in the workforce, the old rules - look for an older mentor, expect to put in years before you see a payoff, dress for success, follow the rules and keep your mouth shut- are suddenly irrelevant The new generation, weaned on the Internet social networking and instant information access, doesn't have time to do things the traditional way.

"We as agencies can't continue to do business or expect young people to do business like we did in the past" said Joey O'Conner, sales vice president for Insurance Underwriters Ltd. in Metairie, La., and past national chair of the UABA Young Agents Council (YAC). 'Young people have access to tools that help them do their job much faster than veteran agents. If you're not aware of what their hot buttons are and how they work collectively, it can be frustrating for both the agency and the young people coming in."

Case in point the way young producers at his own agency approach sales. Of the agency's 11 young agents, 5 of them Millennials, if s evident that one of their generational traits is a preference for working in groups, O'Conner said. "When they go on sales calls, they tackle it as a team. If an agency wasn't flexible, that approach and their enthusiasm could be disrupted. If you tell them to go out by themselves, and don't adapt you could be frustrating them and losing out on great talent"

His agency has adapted to this new approach and established an internal structure on how to divide or share revenue with two producers who go on account calls together, something typically rare for veteran agents, O'Conner said.

"We also don't interfere with how they should service the account they work it out as a team," he said. "It would be foolish of us to divide it up or try to micromanage that job description. We've had great success encouraging them to work in teams."

THE INDUSTRY REACTS

The industry's young agent programs are sitting up and taking notice, with most pushing aggressive new initiatives to boost membership, increase outreach to high schools and colleges, and otherwise ramp up their efforts to make insurance a relevant career choice for a new generation of employees.

We spoke with the leaders of five producer trade association young agent groups on how they were tackling the generational transition challenge. Here are their responses.

JOEY O'CONNOR

sales vice president, Insurance Underwriters Limited, Metairie, La.

past national chair, IIABA Young Agents Council (YAC)

As part of the organization that sponsors Project InVEST, Big Ts 40-year-old initiative to educate high school and coUegeaged students on the viability of a career in insurance, YAC made history last year by joining forces -with InVEST to help foster the national growth of the program through promotion, fundraising and taking the industry's message and the InVEST program to members' home communities, O'Connor said They're working at the high school and community college level to reach students for recruiting future employees.

If the industry had a problem in the past with recruitment, it was probably simply complacency and failing to toot its own horn about how great an insurance career can be, O'Connor said. "I always tell independent agents of all ages that we do a great job when we're all together at a function talking about the industry and how we do so much good for the public; what we don't do well is talking to young people coming out of high school and college about what a great career it can be. We must promote what we're proud of."

That's why the YAC and InVEST alignment is important - "to bring forces together and speak with one voice about how great the industry is."

The first step is for individuals to identify if InVEST already has a presence in their area, because they can provide a list of names of young people taking uniquely developed program for young people. "By the time they're finished, they can do an internship at an agency, get to know them, and they may be a fit" he said. "Part of the strategy of YAC and InVEST joining forces is to cover all the bases of what we should be doing as agencies and companies to attract new employees."

YAC membership runs "a few hundred," with an age range of 22 to around 45. As with most of the association groups, YAC's major benefit is to provide networking opportunities for young agents across the country and the opportunity to develop relationships with insurance company personnel. "We have done everything from motivational seminars to professional development sessions aimed at making them better agents to sales classes or even had company partners come and talk about a specific product" he said.

The biggest business challenge by far for young agents is a lack of experience: "When you're a new young agent you must remain patient and be willing to give yourself time to grow professionally in the industry," O'Connor said. "This is a challenge for any young person who comes in eager and motivated, no matter what career you're pursuing. There's a learning curve you must be willing to go through."

However, this doesn't mean that young people must follow the same slow career path that older generations did. "When I graduated from college years ago, the advice I got from counselors and other adults was to seek out the most successful person in your field, usually someone in excess of a 25-year career, ask them how they got there and imitate what they did," O'Connor said. Today, a lot of 25-year-olds can't see themselves working that long to get to that level. It's important for us to start identifying highly successful 28-to-32-year-olds in our industry, including on the company side. This closes the age gap and shows that it doesn't have to take 35 years for them to succeed with the proper work ethic."

DAVID "MOOSE" BULLOCH

Speed-Stiel Insurance Services, Hammond, La.

national chairman, PIA Young Insurance Professionals (YIP)

As the leader of a relatively new national group of young agents, David Bulloch is keen to recreate the success of the Louisiana chapter of the Young Insurance Professionals (YIP) on a nationwide basis. Although YTP has been around, starting in New York and New Jersey, for more than 20 years, and the Louisiana chapter is 12 years old, YIP national is only 5 years old. "Our initiative for 2011 is to get into all states by contacting PIA associations in each state," Bulloch said. "Some are too small to support a full board, and we're not asking them to do that we're just asking them to get young people involved, to send them to D.C. for a legislative summit so when they're older and running an agency, they're akeady involved and know the players."

The major benefits to members is the opportunity to get involved in state and national legislative issues and educational programs, including continuing education classes, designation programs and sales classes.

For agents already selling business, YIP is useful because of the opportunity to network with peers in other states or regions. "If I want to know about a risk, I can call a fellow agent," Bulloch said. "And I've had agents from South Carolina, Florida and New York call and ask me about a Louisiana risk they want me to place because they're not licensed here."

Although the Louisiana chapter doesn't currently have a formal recruitment program, this is something they "absolutely" need to target Bulloch said. To encourage college student members, the group offers annual membership priced at only $5, compared with $45 for working members. For the price, members get to attend 3 to 4 continuing education sessions and an annual state conference.

While Bulloch concedes that the average agency skews toward baby boomers, he is seeing more agency employees under age 35 in areas like Baton Rouge and southeast Louisiana, compared with New Orleans, where many of the agencies have been around for more than 100 years. "For some of these places, if s their way or the highway, but they have to understand that things change," Bulloch said. "If you look at the way all businesses function these days, if s a lot different than just 15 years ago, when the big question was, 'do you have a fax machine?,"' he said. Ten years ago, it was, 'Do you have an e-mail address?' Now we get faxes, e-mails with attachments and can search the web from our smart phones."

A big part of the recruitment challenge is that well-known industries with more financial clout are cherry-picking the best and brightest with high salaries and bonuses, and insurance can have a tough time competing with them. "What pharmaceutical companies or others that guarantee big salaries and bonuses don't say is that in 10 years, that hire may be making the same amount he did when he was hired," he said. "Ifs hard for agency owners to say, *You may not make much in your first year, but as your book grows, you'll be making more.' Many young people can't see the big picture, and 'that's probably the hardest thing about attracting new talent."

To attract Gen Y and the generations to come, using social media, as well as actually going out to schools and promoting the industry, is working in other states. They need to spread the word that no matter what your degree, there's probably something in the insurance industry you can excel in," Bulloch said.

The best advice Bulloch can give a producer of any age? "Make sure the office you go to has a good staff and the right markets in an area where you can write business," he said. "Join local associations to get involved with different marketing reps, company and claims people. Because of my YIP connections, when something needs to get done, I usually know someone who can help me do it."

JULIA KRAMER, 8PHR

senior vice president, CIAB Leadership, Management and Human Resources program

Responding to a 2007 survey reflecting member firm's significant concerns in the areas of recruitment, retention, succession and perpetuation, The Council created a formal program to address and remedy these concerns. The Council's Leadership, Management and Human Resources program is designed to help firms with a variety of human capital issues, but at the top of the list is attracting young professionals to the insurance brokerage industry and developing the industry's future leaders, Julia Kramer said. This program, in conjunction with CIAB's educational foundation FAME and an advisory group made up of senior executives from member firms, has produced a variety of services, products, information and training options:

* The Young Producer Study," a survey and report sponsored by The Council, examines the financial benefits of hiring young producers and gives firms the qualitative and quantitative data needed to open their doors to the younger generation.

* Young Producer Profile XT, a new job pattern in the array of pre-employment assessments offered jointly by The Council and Profiles International, helps member firms identify- based on a construct of thinking and working patterns from successful young producers - those job candidates most likely to succeed in our industry in the role of producer.

* The Leader's Edge Recruitment Supplement," an industry promotion and recruitment booklet was sent to more than 400 colleges and university career centers to educate students, faculty and guidance counselors on the exciting and profitable world of insurance. Printed and online copies are available to members for use in their own recruitment and ttaining programs.

* "How To Develop and Implement an Effective Intern Program," a print and online how-to manual, is designed to help member firms develop a program to bring young people into their organizations, "test drive" and pre-train them and create hiring pipelines for the future.

*The ongoing FAME Scholarship Program, launched in 2006, is aimed at supporting young people who are considering the field of risk management and insurance as a profession. To date, FAME has awarded 64 scholarships of $5,000 each.

* The Council's new annual conference "Leadership in a Sales Organization," brings together emerging industry leaders, for 2 days of leadership education, workshops facilitated by renowned thought leaders, discussion, networking and relationship-building.

In addition, CIAB speaks to member firms daily about the potential hiring crisis in our industry. "The average age of producers today is 55," Kramer said. "Now is the time for our industry to bring in fresh faces, so that our seasoned producers will still be around to train and mentor the next generation."

Many firms are eager to bring young professionals into their organizations, but have trouble getting started; they can hire them, but some have no formal orientation, training and development programs in place. The Council provides the support, products and resources to help them, Kramer said.

In addition to the challenges of the continuing soft market and healthcare reform, the aging producer population is a major business challenge which will only intensify. As these producers retire, along with the rest of the boomer population, member firms will struggle in a competitive labor market and will need programs and systems in place to support the recruitment retention and leadership development of young professionals.

The Council's goals for 2011, in addition to offering support in leadership, management and human resources, are to focus on women's issues, specifically in the areas of targeted recruitment and leadership development. "This focus is the result of member feedback and their keen interest in bringing more new and experienced professional women into the industry," Kramer said.

The best advice for agents on recruitment training and retention, is to "get started and get started now," Kramer said. "We know that as an industry we are aging and that the time to develop our next generation of insurance professionals is now. Firms that take a wait-and-see approach will soon find that they have missed the first boat and will have put themselves behind the leaders as they compete for the next generation of producers and leaders."

And for young people entering the insurance business: "Don't overlook insurance as a career simply because you haven't done your homework," she said. "Insurance professionals cover risks in every industry, and the world as we know it can't function without it. No matter what their interests and passions, our industry is there. We work with professional sports teams, actors, rock stars, rocket scientists, Fortune 100 companies, charities and environmental groups - you name it insurance professionals are there."

BYRON WAY

president and chief operating officer, Bunker Hill Insurance Agency Inc., Houston

chairman, TMPAA Leadership 2.0

Leadership 2.0 is a brand-new group of young insurance professionals, launched as a spin-off from the Target Markets Program Administrator Assn. (TMPAA), born at its 2009 summit meeting.

"Our plan was to offer the younger members of our association a networking group they could carry with them as their careers developed," said Byron Way, chairman. "As with the TMPAA, we were focusing on a very targeted peer networking group of program business professionals. The group not only assists with networking, but there is a resource component that gives younger members access to information and knowledge they may not otherwise have access to."

Way believes that the biggest challenge for program professionals is to have the resources and contacts of individuals who understand this specific business segment - the same reason TMPAA was created 10 years ago. "Younger individuals who plan to work in programs would not have the same difficulties finding other program business professionals with whom they can explore business opportunities, because the TMPAA has brought that community together for this purpose," he said.

The goal of Leadership 2.0 is to provide these opportunities earlier in their career development, encourage new business innovation and continue to promote best practices in the next generation of program business leaders.

For 2011 and beyond, the group plans to continue growing and promoting the group to member agencies and new program business operations, while creating a forum for younger members to discuss and promote ideas, Way said.

The best advice Way can give young people entering the insurance business is, "Keep your head down, be an active listener, and remember there is no such thing as a bad question. Also, find a mentor in an area that holds your interest who can take the time to assist your growth in the industry."

COLLEN GILES-HARRIS, CIC, CIW

corporate manager, commercial lines underwriter, RW Scobie Inc.

board president, AAGMA Under Forty Organization (UFQ)

The AAMGA UFO group is another young insurance professional program with a history. Established in 1991, the group currently has 372 members, Colleen GilesHarris, UFO board president said. Major benefits to members include educational, networking and leadership opportunities, as well as an atmosphere that encourages lasting relationships.

Other board members include:

* Senior vice president Ken Distel, Joseph Distel & Co. Inc.

* Senior vice president: Coryn Thalmann, Jimcor Agencies

* Vice president TC Anderson IV, RPS Scottsdale

* Vice president David Miller, WA Schickedanz Agency Inc.

*Associate chair: Luke Bauckham, Corrie Bauckham Batts Ltd.

* Immediate past president Tripp Duesenberg, Southern Insurance Underwriters Inc.

When asked about the biggest business challenge faced by UFO members, the group's board mentioned keeping up with changes in the industry and technology; competing with the large national brokers; keeping young insurance professionals interested in the industry and making it a career instead of a job; and agency perpetuation, or lack thereof. UFO helps to address these issues through educational programs, networking and conferences.

Over the last several years, UFO has introduced the Georgia State University (GSU) Leadership Track, which includes four courses on leadership taught by GSU professors and staff members. The group also made the Make-A-Wish Foundation its official charity, and introduced changes to organizational bylaws, such as implementing the transition from operating as a committee of the AAMGA to operating as a stand-alone organization with its own executive committee and board of directors.

Goals for 2011 include working with AAMGAs automation committee on updating member profiles and tracking their education with AAMGA; continue to foster relationships with YIPS and YACs; and continue offering scholarships through UFO.

Offering advice to agencies wishing to recruit young people, speaking for the board, Giles-Harris suggests: "Be flexible and open-minded when working with the younger generations, as they have a lot to offer. In today's market knowledge is the only thing we can bring to the table. The future of your agency lies in the hands of your Under Forty Group. An investment in them is an investment in your own future. Focus on hiring based on attitude and personality over experience. You can teach an employee the work skills they will need for the job, but you can't teach someone how to have a good attitude or personality.''

And when asked for the best advice they could give for young people entering the insurance business, board members had this to say:

* Technology is a great tool, but don't forget to also learn the business and network with others. We are still in a people business and fostering relationships is key.

* Be honest and develop a niche.

* The insurance industry is not just another job. It is a stable, long-term career that rewards you for helping people protect their assets. Insurance is not going away any time soon.

* There are many generations in this industry and with hard work and patience, it can be very rewarding and fulfilling.

* The opportunities in this industry are endless. You get to learn a little about a lot of different businesses, and longterm friendships can be built over time with customers and carriers.

* Be open minded, always listen and do not be afraid to ask questions if you do not understand and try to enjoy it.

* This is a close-knit industry. Your actions, good or bad, will follow you throughout your career.

* Take advantage of all networking opportunities. This business is all about relationship building. The people you meet early in your career are likely to be people you will be working with, in some capacity, for the rest of your career in insurance. If you build relationships with these people now, you will have lasting connections for years to come. These connections can lead to new customers, new job opportunities, new contracts with carriers, and even new friendships.

[Author Affiliation]

By LAURA MAZZUCA TOOPS, AA&B editor