How can insurance companies battle brain drain? Roll the D.I.C.E.

By Antoine Orr


In my opinion, in order to remain economically viable for the next 100 years, the industry needs to rebrand, retrain, and develop new and improved agent recruiting and retention sales training systems.

It is a well known fact that the insurance and annuity sales force is on the decline. This has been an ongoing trend for the past couple of decades.

It is expected that over the next 10 years, the industry will lose 50 percent of the sales force due to age and other agent opportunities. This situation is so problematic that a number of the industry trade publications have recently devoted considerable coverage on this issue.

So, what are the FMOs, IMOs and insurance companies doing to solve the problem? They continue to use the same recruiting and training systems that have produced such high turnover rates and producer dissatisfaction. They even continue to use the same software, leads, trips, higher payouts and products as producer recruiting carrot sticks.

What is the solution? In my opinion, in order to remain economically viable for the next 100 years, the industry needs to rebrand, retrain, and develop new and improved agent recruiting and retention sales training systems.

How is this to be done?
    Step No. 1: Desire — Have a desire to improve, and then make a decision to take action and do it.

    Step No. 2: Inspire — Develop a training system that will inspire producers to be excited about the career they have chosen and the company they represent. Focus on the holistic educational and financial literacy development of the producer and the revenue will take care of itself.

    Step No. 3: Conviction — Develop and display the organization’s consumer wealth building and prosperity philosophy. In other words, highlight your company’s core beliefs and let that be the carrot stick to attract new producers. Your message must be so convincing that it will cause prospective producers to take the next step and join your organization.

    Step No. 4: Emotions — Once the producer has joined your ranks, what will keep him or her from leaving? Is it the product mix that your organization offers? No. Not when every marketing organization offers the same product. Is it the pay-out? No. A higher pay-out does not equal more money if the producer is unable to get in front of clients. Is it the friendly back office support staff? No. If a producer is unable to acquire new clients, he or she may not ever know just how much the back office support team really cares. Is it the advanced markets support team? No. In short, producers are just like their clients in that they buy on emotions and keep the product or service on logic and experience.
At the end of the day, this is what I do know: According to the U.S. Department of Labor and LIMRA, the average insurance agent earns approximately $45,000 per year. It costs insurance companies $100,000 over a three-year time period to train one producer, and it takes 10 years for the insurance company to recoup that cost.

I also know that in a freshman class of agents, 85 percent will quit after three years in the business. And according to LIMRA, 25 percent of the current producers will retire within the next five years and nearly 50 percent will retire within the next 10 years.

However, the industry has not been successful in replacing this brain drain at the same pace. With numbers like these, perhaps it is time to roll the D.I.C.E. What does the industry have to lose?