Developing the next generation of brokerage general agents (BGAs) and brokers will be a challenge, given the increasing demands from the industry and the competitiveness from other financial service and professional industries for entrepreneurial-minded talent, whether that be in learning How to Sell Your Business or through other means. Timothy Klusas, president, and Alan Protzel, director of agency development for The Marketing Alliance (TMA), recently shared their thoughts and insights about leadership development.
Q: What is the brokerage industry doing well to recruit broker talent?
Tim Klusas: Many of us are competing for talent from related distribution channels-from potential distribution points such as law firms, property and casualty agencies, banks, accounting firms and broker/dealers or wire houses. Traditional BGAs are looking to these non-traditional channels as new distribution points. The BGAs who have looked outside the traditional channels to bring new people into the business have driven growth with more success as opposed to growth by recruiting another BGA’s brokers.
Alan Protzel: What Tim says is absolutely true, but reaching out to these channels is not new, and there has been little success. What we have learned from the failures of the past is that product and sales ideas are inadequate. Tools that create consistency and enforce compliance, coupled with technology-based platforms and marketable programs are the keys to success. Very few can deliver that on a scalable basis. It takes true partnership and an investment of resources.
Q: What is the biggest challenge today for recruiting brokers?
Protzel: Many brokers used to come from career shops. While that is still a source, the flow has become a trickle. As I said before, it appears that the new brokers will come from financial institutions and other allied financial product distribution organizations.
The challenge, then, is to recognize that these sales people were not trained as traditional life insurance agents and the way they attract, serve and retain clients is different. Their language is different, their compensation is different, and their way of doing business is different. That dictates that we change the way we approach, attract and serve them.
Q: Tim, what attracted you to leave one industry and enter the brokerage industry to become president of TMA? Alan, what drew you to TMA after having worked for several large carriers?
Klusas: I wanted to work with independent business owners and entrepreneurs again-the lifeblood of the business community. I enjoy speaking with and learning from business owners about how they’ve grown their businesses, achieved their biggest successes and dealt with their most pressing challenges.
One of the best parts of the brokerage industry versus other industries is that there is no limit to what a person can achieve. The brokerage industry is an “equalizer” where credentials and status are not as much indicators of success as are qualities such as business acumen, innovation and tremendous energy. I also believe that entrepreneurs have a more comprehensive view of the world and refreshing confidence in how it works versus the average person. I find working with BGAs to be a very real and refreshing audience, so I’m challenged professionally every day to keep up. Most importantly, I’m thrilled to work with such a group of innovative people in an industry that is constantly changing.
Protzel: It was a personal reason that drew me to TMA. I find I’m at my best professionally when I’m offered an opportunity to build something new or fix something that is not working. When I joined TMA, I was offered the chance to build something significant. Each year there is a challenge to do something new and improve on what we’ve built. I find TMA and brokerage full of opportunities and challenges. Also, without being redundant, I love the people I deal with every day-carrier associates, BGAs and their staffs, and TMA associates-a great variety of really good and interesting people.
Q: How have industry leaders adjusted or changed their leadership direction to meet the growing needs of today’s brokers?
Klusas: Carrier leaders and BGAs have done a better job of educating brokers about the business-not just on the process of underwriting, products or operations-but on how the business works.
We see study after study that shows how most of America is underinsured or not insured at all. Carrier leaders are engaging BGAs to address the issue and better understand how they are able to make a difference in their clients’ lives and run a successful business.
Protzel: Implementing technology has been by far the biggest single factor to meet the growing demands of today’s broker. Brokers have tended to be more technology savvy since they are more entrepreneurial. They run businesses and need results fast.
For example, today it is much quicker and much easier to sell business, whether that be through business brokers or through other platforms. As much as people complain about turnaround times, they are really good in today’s marketplace. We tend to forget how much time it took to place business even just a few years ago. It’s much more consistent now. I think back to my early days of selling insurance. We had so much to do that wasn’t direct selling-filling out applications and not having illustrations to use when we met with the client. Remember the rate book? Ever heard of it? Be glad you don’t have to deal with it. The difference is amazing today. We have much better analytical and sales support tools. The implementation of technology has elevated the brokerage agency from quoting term and shopping impairments to much more of an educator, marketer and business partner with the broker.
Q: What is TMA doing to grow brokerage sales?
Protzel: Our central focus is to help our BGAs increase sales. It’s what we do through our marketing pieces, educational programs and communications. We are offering BGAs tools to be more valuable to their brokers. On any given day, 70 percent of a BGA’s day is dealing with administrative stuff that can distract him from his number one priority-selling. BGAs are bombarded with too much information that doesn’t necessarily pertain to them.
Successful BGAs now understand that one way to increase their sales is to have case managers involved with the sales process. A case manager can still provide a status on the case but really position himself as a resource for the broker and a marketer for the agency. By helping a BGA change the focus of his current staff, we help our clients’ businesses grow organically.
We also help our BGAs turn variable costs into fixed costs. This makes our BGAs more profitable and more focused on selling. We offer underwriting and case processing on a per case basis, relieving them of fixed expenses and overhead. Also, particularly in the case processing/case management arena, we are able to offer these services very economically due to the economies of scale we achieve in processing a large number of applications at our facility. Variable versus fixed; economy of scale; not placing business through future competitors-these all allow our BGAs to focus on attracting brokers and helping them sell.
Klusas: We are paired with amazing, off-the-chart salespeople in the BGAs. Their highest and best use is selling. We try to remove any obstacles that prevent them from selling. BGAs are obsessed with information because they need it to grow their businesses. What we attempt to do is provide easy access and sort out the pertinent information they need to operate their business. We provide their staff with information specific to their roles. We strive to cover everything from product changes and carrier updates to sales ideas and industry news.
Also, I want to expand on what Alan mentioned earlier about the increased pace of how business is processed. It has changed dramatically just within the past two years. We are doing everything we can to get out in front of all business changes before our clients learn from someone or somewhere else and find themselves in “reaction mode.” We want to be their go-to source for information since they trust us to provide them with accurate, real-time and complete answers the first time.
Q: What will brokerage look like in five years? Who will be the brokers? What will be the profile for a BGA?
Klusas: I think the BGA is going to increasingly find himself in the distribution business and less purely in the life insurance business. For example, in order for a boutique BGA to be successful, he may have to align himself with an alternative distribution channel like a bank or property/casualty company to sell insurance. It will become tougher to survive just doing business on your own without building a network or alliances. I also think that the industry needs to pay more attention to regulation currently being proposed as it could cause dramatic changes in our business with unintended consequences.
Protzel: I see fewer traditional life brokers and more non-traditional channels selling life insurance. I’m already seeing it. I can see the boutique BGA aligning himself with the big BGAs. More life insurance will be distributed by people who do notidentify themselves as life agents-just as more equities are distributed by people who do not identify themselves as stockbrokers. They will have more resources available and will offer more diversified products and services.
Q: Who is an ideal candidate to add life brokerage to what they do?
Protzel: Someone who has the ability to sell intangibles. A person who can sell cars doesn’t necessarily have the ability to sell financial services. Such a person needs to understand wealth management, finances, business principles and accounting, and to work with a prospect to understand why a certain product is needed to protect family and invest in the future.
Klusas: Despite the technological ad-vances introduced over the past several years to make selling faster and easier, the selling that still matters is when a broker is sitting face-to-face with a client. Selling is not easy. It takes hard work and perseverance to be successful. This will not change in the future regardless of how much technology improves the process. Skills and traits that successful brokers still must possess are empathy, active listening, and the ability to teach and explain the benefits of life insurance in a sincere, intelligible way.
Q: What can carriers do to be more closely aligned with the brokerage business?
Klusas: Continue to manufacture high-quality products and publish sound sales ideas. The single best thing carriers could do, in my opinion, is maintain a consistent, sustainable product portfolio that a BGA can build a business around.
Protzel: They need to continue to leverage the benefits of technology. It aids in the sales process and makes life insurance more affordable.
Q: What advice do you have for someone thinking about entering the industry as a broker?
Protzel: Find a BGA who adds value. Find a good BGA who can help you sell by keeping you away from administrative tasks that distract you from the sales process and, more importantly, provides you with educational, sales and marketing tools to improve your service-make you more valuable-to your clients. Interview a BGA’s top five brokers.
Also, ask yourself if you have a “natural market.” There are excellent opportunities available for well-defined cultural markets or industries where you previously worked. People who have had careers in other industries come into the brokerage industry with an advantage of already being knowledgeable and knowing the language in that industry.
Klusas: Some of the most successful brokers work with underrepresented audiences-whether it’s first language, gender or ethnicity. The key is to speak, literally or figuratively, the language of your audience to create mutuality and build credibility. It also allows our industry to reach people who are truly underserved by us all.
Thank you, Tim and Alan!
