I am 31 years into my life insurance career, and today I have as strong a belief as ever in the power of life insurance.
Every other Friday I have a call with a young man who is a marketer in a wholesaling agency. It is a mentoring call, but I get as much out of it as he does. Here is our standing agenda:
• What are we learning that would benefit one another?
• What one thing could we do to be more effective?
• What did we discover in the last two weeks that had surprisingly good results?
Our most recent call led us to a discussion of the changed landscape in wholesale distribution. Times have changed, and so must our approach.
Brokerage general agencies (BGAs) grew out of an environment in which most life insurance representatives were agents of captive carriers. Naturally, with two broad exceptions, those carriers received the majority of the business from their representatives. The two exceptions were cases either declined or highly rated, and cases requiring a product or price unavailable at the representative’s primary carrier. Hence, BGAs grew out of impaired risk and competitive products.
Unfortunately, impaired risk and products are still the cornerstones of value offered by many BGAs. I say “unfortunately” because the majority of retail life insurance agents are no longer career agents representing a primary carrier. There is no default carrier for their life cases. All the business is eligible for brokerage.
The need for the life insurance agent today extends well beyond underwriting and price. These agents fundamentally need the kind of support once enjoyed from primary carriers.
One example: mentoring and succession planning.
When I began my insurance adventure, it was as a representative of a career carrier. The seasoned agents who shared my office gave me advice, taught me how to prospect, how to deliver a policy, how to develop a sustainable process for continuous sales, and how to grow in my knowledge. Some of these agents even came with me on appointments to allow me the privilege of seeing and hearing the body language and right words to use with clients in order to compellingly tell the story of life insurance.
Those seasoned agents also had the knowledge that their clients would have a stream of new agents available to them at all times should the seasoned agent retire or die.
Fast forward to today. If a young person wants to help people find peace of mind through life insurance, who is standing ready to mentor them? How many seasoned independent agents, in anticipation of their own death or retirement, have young agents to whom they can direct their clients?
Three Questions for Experienced
Life Insurance Agents
1. Do you care enough about the value of life insurance to pass on your passion to a younger person?
2. Do you plan to abandon your clients to the competition or to the customer service teams at the carriers you represent when you die or retire?
3. Do you have anything in your current professional life that could possibly compare with the joy of mentoring someone in the very industry that gave you income sufficient to raise your family, travel, live comfortably and have hobbies?
Look, if the answers to these questions are “I don’t care,” “I don’t care,” and “I am too tired,” then please stop reading this.
Three Questions for Wholesaling
General Agency Principals
1. Where are the life agents of the future going to come from?
2. What will remain of the residual income from your effort and energy expended over the years, helping your agents build their businesses, when those agents retire or die?
3. What is your succession plan? How can you separate your succession plan from the need for your agents to each have one as well?
I predict your answers to all three questions are “I don’t know.”
A Modest Proposal
I’d like to present two assumptions.
First, the experienced agent nearing retirement age still has contact with hundreds of clients he has worked with over the course of his career.
Second, the wholesaling general agency principal has knowledgeable staff capable of training someone in product, how business is processed, sales concepts and best practices.
Now, what does someone look like who could possibly be interested in entering the life insurance business who would also have the aptitude to succeed? Hmm. This question, while difficult at first glance, is really rather easy to answer. Consider:
• Colleges and universities are pouring out graduates into retail and service jobs paying entry level wages.
• These young people are looking to make serious money but are not willing to wait until they are older to do so.
• A fair number of these graduates have the two necessary requirements that our industry has always had: They are smart, and they are personable.
• These young people are discovered the way they have always been—by asking those you know who they might recommend for a possible career as your successor.
Blending Core Competencies and Assets
The experienced agent has the clients who would be willing to meet the agent’s successor. The wholesaling general agency principal has the people and resources to assist in training the new agent. The clients of the experienced agent have needs that may have never been addressed, which could yield new sales, and they know people not yet served by any life agent who they could introduce to the new agent.
The place to start is the long term partnerships that exist between experienced agents and wholesaling general agency principals. The first step is to meet in order to discuss if either or both parties have a desire to develop a path for succession of one another’s business. Then, a projection must be quantified for how many sales and how much revenue could reasonably be developed with all parties working together. That revenue projection then needs to be compared with the incomes that fresh graduates are earning from alternative occupations.
What Comes Next?
There is simply no way to provide a template. This proposal is like recommending to an explorer in the 1500s that he cross the ocean to discover new lands. “Get a good ship and plenty of supplies. Oh, and head generally west.” Create a process for introducing the new agent to the experienced agent’s clients (represented by the ship) and provide adequate training on the right words to say and the right questions to ask (the supplies). The experienced agent can then head into the sunset, leaving clients in capable hands.
For all the good that you have done in your career, all the death benefits paid to beneficiaries, the greatest legacy you could leave just might be someone to carry on the good work.
The opinions and ideas expressed by the author are his own and not necessarily those of North American Company for Life and Health Insurance or its affiliates. North American Company for Life and Health Insurance does not endorse or promote these opinions and ideas. For agent use only. Not to be used for consumer solicitation purposes.