Battling life insurance industry "brain drain"
By Brian Anderson
I typically see studies reporting that the average age of an active life insurance producer is anywhere from 54 to 57, and trending up.
As older producers retire, I also hear from carriers and general agents alike that they are not being replaced at a sustainable rate by younger people entering the field. Many of the newcomers who do opt to pursue selling life insurance as a career are thrown into the job dangerously unprepared and, consequently, fail to make it past the first year. The four-year retention rate has been pegged at about 10 percent.
As experienced, well-trained agents retire, the industry is in danger of suffering from a considerable case of “brain drain,” as new agents lack sufficient access to the knowledge and experience these veterans possess. All too often these days, new agents don’t receive sufficient up-front training from carriers, aren’t motivated to independently pursue industry designations, or aren’t shown the ropes by a mentor.
Certainly you have heard that life insurance ownership in the United States hit a 50-year low in 2010, with LIMRA reporting that only 44 percent of U.S. households have individual life insurance. That’s not a huge surprise, as it’s quite likely fewer producers are selling life insurance now than ever before. The industry cannot afford to let an insufficient sales force — both in terms of numbers and training — further exacerbate this problem.
With this issue in mind, keep an eye out for a special report in the April issue of Life Insurance Selling titled, “Bridging the Education Gap.” Among the features included in the report will be April’s Producer Roundtable feature from Contributing Editor Charles K. Hirsch, CLU. Hirsch interviewed three experienced producers who gave some candid responses about the state of agent education. Here are some advance teaser quotes from the article:
Brian D. Heckert, CLU, ChFC, AIF, QPEC: “Companies have mistaken the difference between investing in hiring and training new recruits with buying a new producer. The cost is the same, but one has immediate results initially, and the other has long-term rewards.”
Michael J. McNeil, CLU, ChFC: “I believe it necessary for all who enter this career to become — and to strive to remain — knowledgeable and informed in order to keep up with the ever-evolving products and planning tools. How this is done today varies widely among financial services companies, and it’s clear that a lack of company-sponsored professional training in financial planning skills contributes to high turnover in the early years of many careers.”
Brad Elman, CLU: “There is training provided by trainers, and then there is training provided by people actually doing the job. I have found that the training I have received from those actually doing the job, like other insurance agents, has had the highest impact. That type of training occurs at meetings like MDRT and often comes from sharing ideas while chatting in line for coffee or volunteering with other members — we call it ‘the meeting within the meeting.’”
I would love to know what you think about the state of producer education. Perhaps you think it’s a non-issue. But if you do see a serious crisis on the horizon, what ideas would you have about how the industry can avert a crisis? Please utilize the comment tool below to share your thoughts. And keep an eye out for this special report in the April issue of Life Insurance Selling — we might even use your comments!