Monday, August 1, 2011

Six Biggest Challenges Faced by Insurance Producers - Part 1

My work as an insurance recruiter gives me a unique window into the lives of insurance producers and the problems that they face.  Let’s face it sales is hard enough as it is.  Even if you have a 50% hit rate that means that 50% of the people you talk to are saying no.  With this in mind I thought I’d share some of the biggest challenges I’m seeing producers face and my thoughts about how to combat them.  Today I’m posting the first half and will hopefully have the second half up by Friday!

1.  The Agency isn’t geared towards growth

Something that has become painfully apparent is that there are more producers with established books in the insurance industry than ones that are building a book.  While producers with established books make for great mentors they typically are not experiencing the same pain as someone that is aggressively trying to build new business.  If you are in this situation you know what I mean, while they are out golfing each Friday, you are busting it trying to get that last submission in.  It goes farther than this though as when the senior management is happy living off of their big book then they tend to focus the agency’s resources on retention and not growth and it permeates through the culture. 

Solution:  While you probably can’t change your boss and get him out cold calling again you can ask him for some changes.  Take a leadership stand – see if you can help in the recruitment of new producers.  You might not change the senior management but you could get some more people with similar goals to work next to.

2.  The Agency is unwilling or unable to provide adequate service

This is probably the biggest pet peeve of many of my clients.  If a producer is actively involved in servicing a book then they can’t be out calling on new business.  If the producer isn’t calling on new business then they aren’t generating new revenue for the producer or the agency – no one wins!  The problem is that hiring a new or better service person costs money that comes directly out of the bottom line creating a paradox.  You need more revenue to hire a service person and you need a new service person to generate more revenue. 

Solution:  Sadly if you are in an organization that doesn’t value service it will be up to you to initiate this and make some form of compromise.  Depending on your split you will need to offer that some of your new service person’s salary come out of your revenue.  I’ve seen many people be able to negotiate a sharing of the cost that runs as good as 50/50 to as bad as the producer absorbing the entire weight of the employee hire.  That said it is a needed step back to take a step forward. 

3.  The Producer has outgrown the agency

Many of the producers I talk to are in this situation.  They got their start at an agency calling on smaller accounts and have had great success.  However, somewhere along the line they began to stall.  Often times this is because the producer begins to gravitate towards larger accounts and the agency doesn’t have the service, markets or appetite to support this.  What do you do?

Solution:  The obvious answer is to call a recruiter!  I know the number of a good one if you are looking.   Just kidding!   This is one of the hardest obstacles to overcome but it can be done.  However, it isn’t an overnight fix.  What you need to do here is to create a business plan and convince the powers that be that a change in appetite is in the best interests of the agency.  The key points here are to give the reasons for changing the appetite, what it will cost and what you project the return on the investment to be.  Be prepared to defend the cost of acquiring new markets, new services and probably a new CSR. 

You can read the second part right here:

Six Biggest Challenges Faced by Insurance Producers - Part II

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