Millennials to the insurance industry: 5 ways you can do better

Millennials to the insurance industry: 5 ways you can do better

Millennials to the insurance industry: 5 ways you can do better As part of Insurance Business America’s look into the Next Generation of insurance professionals, we surveyed millennials nationwide on their preconceived notions about the industry.

We also spoke with millennials already working in and studying insurance to ask for their insights on how companies can improve in their recruitment and training practices. We selected the five most insightful comments, which also appear in the latest issue of Insurance Business America.

1.    “In order to make themselves attractive to millennials, insurance companies must become better at promoting and cultivating the variety of career paths available within the profession. More importantly, though, they must ensure that those job opportunities are meaningful, allow for personal growth, and provide upward mobility within their respective organizations.” –Scott Bouchard, 26, Transportation & Logistics Practice, Aon Risk Solutions
2.     “Risk management and insurance firms should continue reaching out and supporting new talent from the university and even high school levels. To do this, the insurance industry needs to establish and strengthen relationships with faculty who serve as gatekeepers to valuable talent pools. Without connections to insurance, most of my peers would not have considered pursuing opportunities within insurance.” –Cathleen Gabriel, 22, underwriting analyst in the Financial Lines group, AIG
3.    “Recruit students straight out of college that majored in low-correlating, entry-level careers. Give them a steady and entry-level flat salary, and instead of a salary increase based on their commission, it can be directly tied to the percentage of student loan repayments the company will subsidize. If they increase the percentage monthly in correlation with sales, then that monthly incentive will satisfy the instant gratification that our generation loves.” –Michael Cain, 26, second-generation agency employee
4.    “As a new generation of insurance professionals, we are excited to learn about insurance—if you can believe that. If you have people willing to mentor us and involve us in work that actually adds value to the company, that makes all the difference in the world.” –Alyssa Bouchard, 23, associate broker, AmWINS
5.    “Millennials are looking for employers who confide in their employees and provide us with the freedom to make a difference. It is crucial to provide feedback about our progress towards goals and encourage creativity when setting goals.” –Ali Rosenburg, 21, student, The University of Iowa

For more insights on the Next Generation of insurance professionals, look out for Insurance Business America, issue 2.03 on desks this week.

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  • KC Ken 7/15/2014 12:37:31 PM
    First, good article. I will tell you why the producers in this industry have a median age of 56. And I will tell you why young people do not want to get in this business: It is too damn difficult anymore and today’s young people do not want to work for free. According to LIMRA. 500,000 (Life & Health) agents have left the industry in the last 5 years. Why? They were not making any money! Farmers Insurance has been running ads for agents in 25 major newspapers -- 365 day per year -- for the last 30 years! Why? That is their business plan; "churn & burn." It may not be 90%, but the turnover is enormous and the company gets to keep all of the clients that the newby signed up during his 12 to 24 months spent with the company. Even though conventional wisdom dictates that hiring and keeping a good employee is job one, many insurers refuse to change their ways and their business models.

    Americans own life insurance at a smaller percentage than they did during the early 1900's. According to LIMRA's "History of Life Insurance" - in 1930, there were 117 million life policies in force. Our population was 98 million at that time. The equivalent of one policy for every man, woman & child in the country. Today? 113 million (individual) life policies are in effect -- and our population is approx. 310 million. Less than 50% of Americans own a life insurance policy. Of those, 80% have children in the home that are age 18 and younger. There are, simply, less and less sales to go around. We could debate forever why life insurance is not selling like it used to -- but that is not the point of this comment.

    The biggest reason that young folks do not get into this business: the business model / compensation scale -- must be changed! It takes years to get into this business and get rolling and earning a nice living. 99.9% of the companies want to hire these young people based on that old model (zero salary - commission only). The only way a young college graduate could possibly make it today is if he is from a wealthy family and lives at home with his parents.

    Otherwise, most young potential producers say F*** O** - when they learn that it is commission only. If 30 year veterans are earning $32,360 per year (the median income of a life producer according to LIMRA) - why on earth would a young producer want to sit in an office and take years to make a sale and build his book of business? They don't! I have had many a college grad sit in my office and guffaw and laugh when they learn about how the producers are paid in this country. I saw some unbelievable raw talent walk out the door in favor of a, guaranteed, salary; they have student loan debt, wives and babies and mortgages and bills to pay. They could not afford to work exclusively on commission in an industry where a life case can take from 3 weeks to 9 months to get through underwriting, approved and issued. And if the client takes delivery and they are on the “monthly pay plan” -- that new producer will get paid his commission in 12 installments over the next 12 months. We were beating our heads against the wall as we tried to find good, life, producers. Until we changed our pay plan…

    Ours is an independent agency & 4 years ago, our agency decided to "break the mold." We went ahead and implemented a base salary of $50,000 annually -- plus commissions. Not a draw -- a salary. That changed everything. Most of my contemporaries were shocked when they learned this. They cautioned me about, "...producers who will take the salary and not produce." That is the, standard, attitude of this industry. This industry does not know how to do anything in a more modern, efficient, way. They are so deathly afraid of paying someone a basic salary! But, indeed, the two producers hired by me have turned out quite well and with the comfort of a weekly paycheck have turned into excellent producers. The ROI is there; no doubt about it. Everyone else in the insurance industry gets a salary -- except producers.

    "That's the way it has always been and that's the way it will always be" - is the mantra of our industry. My 30 years in the industry will be over soon and I will retire to Costa Rica. But to any young person that is contemplating becoming a life producer, I say, "Run - don't walk away from this business – run!" Until the pay plan is changed, young people are not going to want to be a life insurance producer. My own kids, 24 & 25 year old college graduates, said to me: “Dad, after watching you go through hell for the last 20 to 30 years (earning a living and keeping the family afloat), why do you think we would want to get into this business?” When you cannot convince your own kids that the industry is good for them, what makes you think that strangers are going to take this job (without a good salary)?

    Again, I repeat, I have already done my time and earned my retirement and will be enjoying it soon.
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