Best Jobs 2012: Insurance Agent

Northwestern Mutual to Recruit More Than 5,000 Financial Professionals in 2012

New York Life Seeks to Hire More Than 3,700 Representatives in 2012

Life Insurance Hiring Is Reborn

Most every major insurance company is announcing that they will be aggressively recruiting salespeople for the remainder of the decade. Some are predicting that it will be their largest hiring initiative ever. Considering this industry, economy and outlook, that leaves a few questions.

Question: Why?

As a quarter century member of this industry, I have followed and reported on many of the advances and deficiencies in the hiring, care and feeding of the insurance agent. Whenever I see this scale of aggressiveness (actually bucking the trend of hiring for many industries), I have to give pause as to the “why” part of this MO.  In history, many of the extreme surges of hiring have ended up with attrition levels that are even worse than the average. The title of “let’s throw all we can against the wall, and see what sticks” is the first thing that comes to mind. I hope that the objective of pure volume will not be the subliminal goal.

Universally, this industry has been plagued with high agent turnover, which turns out to be expensive for all parties. Training to productivity is costly, and high turnover places extreme pressure on profitability. Unlike the marketing of many other industries, this one has a particularly high “rejection factor.” Historically, this negative response is aggravated by a depressed economy. That can be a particularly risky adventure for marginal companies regarding their position/exposure with the rating agencies. In other words, we could be headed for massive uncertainties, pressures and expenses for agents and companies.

It has been an industry mantra that “insurance is sold not bought.” Way back in the day when corporate execs actually believed this, there were little to no technological advances that affected the communication, educational or relationship buying factors (e.g. “just smile and dial”). Bottom line: In this age of technology, no one wants to be the object of a sale when they could be the beneficiary of an educated and informed decision. “Decisioning” could definitely become an alternative to “making the sale.” That may be an option (and significant others) that innovative carriers may consider to help reduce failure statistics.

Question: How?

Not how will they recruit agents…but how they will train agents. As stated, agent training has traditionally been built around the role of the buyer and the seller. While that may be a simplistic response, that history is provable. Will that continue ad nausea?

Question: What will be different this time?

Technological advances in hardware, software, no boundaries, 24/7 audio+visual in real time, social media, governmental regulations and influences, agent fiduciary regulations, UCDs [universal communication devices]…other new regulations, definitions and requirements…are only a few new influences that could affect agent success/failure.

Summary and Action:

The effort here is noble considering the need for job growth in this country. But, controlled and profitable growth is what is genuinely needed considering the particulars unique to this industry. We must also consider that when millions can’t even pay their mortgage, or buy gas, what will that do to the insurance market and their ability to pay and maintain new premiums (especially whole life). Where will the flood of new agents find the sale?

Along with the hiring effort….the commitment to fund and staff that initiative is a vital piece of the pie. Should the employers push hard for new sales and not have the financial means and support people behind it…they may have little chance for long term success.

Considerations Going Forward:

(multiplied by thousands of new agents)

The total cost of a (person to person) sales call (much higher) e.g. Gas; Compliance; All Expenses;Training Costs; etc,)

Attention and calculation of lapses particular to new hires (much higher)

Clearly demonstrate how this effort will differ from the past with a success road map

Rather than continuing to objectify the sale…consider the development of a model that emphasizes and rewards progressive commitments leading to a buying decision.

In all, it is impressive to see the headlines purporting such industry optimism.

It’s entirely another challenge to prepare for it in this market cycle. It may be wisdom, on each carriers part, to be able to prove the commitment and blueprint to be executed to hire a profitable new stable of thousands of salespeople.

As always…You decide.