Where Have All The Young People Gone?

Certainly not into the insurance industry and definitely not into independent insurance agencies.

What a surprise!

What young 20 something college graduate wouldn’t want to go to work in an industry portrayed in TV commercials as two doofuses in light blue suits? What intelligent, young person with a great personality wouldn’t flock to an industry that uses a Gecko or a heavily made up spokeswoman named Flo to sell their product? That’s right I’m talking about the insurance industry recently vilified by President Obama in the presidential debates. I know, he was talking about the health insurance industry but the general public doesn’t always make a distinction.

I don’t have to tell anyone who has been in this business for any length of time the critical juncture we’re headed for with the massive brain drain that is occurring as baby boomers leave our industry. It’s like looking at a huge hourglass with the sand rushing from the top to the bottom reminding us that our time to fix the problem is quickly running out.

It’s not surprising we are struggling to attract new young talent. As an industry we have a very poor image with the public, especially with young people. What’s even more frustrating is that we haven’t made the commitment to change our image and make our self attractive so we can bring in more young applicants interested in becoming the future of our industry. If we don’t wake up soon and make a serious commitment to creating a business environment that grabs the attention of young people our industry is in for a major paradigm shift.

We need to change our image. The best time to institute this change is in high school or with students attending community college. Programs like InVest that educate young people about our industry help to shift the negative, boring image we currently have. Even if an InVest student doesn’t pursue a career in our industry, having been in the program gives them a much more positive perspective on the importance of the industry and what we do.

It also helps to outline the professional career paths that are available to interested young people that insurance has to offer. When I speak to young people thinking about or already in our business I stress with them the need to learn all they can and to become the best they can be in their chosen position because as we move forward they will reap the significant financial benefits of this aging industry.

There are other changes that need to occur if we are going to attract the new young workforce we need. Many of the millennials coming into the workforce want to be entrepreneurs. They don’t want to work for a large company who will dictate their future and force them to conform to rules and ideas they don’t agree with. Many have recently experienced seeing their parents lose their jobs because of poorly managed corporations or downsizing. They don’t want to put their fate in someone else’s hands.

The problem with that is our industry does not make it easy to create and grow an independent agency. There is very little, if any, training available on how to start an agency from scratch. Even if someone had the specific business knowledge necessary, gaining access to markets without giving away some of your independence is impossible. Most carriers are hesitant to appoint a start-up agency and the alternative is to get markets from an MGA/GA or an aggregator.

The alternative is to go to work for an existing agency gaining experience and knowledge that will make you attractive to a carrier or two. The young producer’s ability to build a significant book of business will also make them very attractive for an appointment. But then the bad news! You signed a non-compete/non-piracy agreement and the business you wrote must stay with the agency where you work. If you are lucky maybe there is a buyout provision that will allow you to buy your business back from the agency and take it as a starting point for the new agency you are opening. The question is can you be successful starting your own agency while making the payments on your book you are buying. Since new agencies usually don’t see much cash flow in the first 90 to 120 days will you have the necessary funds to make it all work?

Maybe you get lucky and end up working as a producer for an agency interested in giving you ownership in your book at some point and for a designated cost. Better yet maybe they see you as the answer to their perpetuation of the agency and will work out the arrangements so you can grow in experience, knowledge and book of business ultimately buying out the retiring owner and taking over.

As an industry we need to find creative ways to attract young producers allowing them to work towards being the master of their own destiny. I believe there are a number of ways we can make the necessary changes but the current industry leaders need to want to make it happen.

Besides those young people who want to own and run their own independent agency there are a number of quality young candidates interested in a career inside a successful agency. The unemployment rate is high. There are many young college graduates that can’t find a job in their chosen field or even a good job offering a decent salary with benefits and the chance to advance on a professional career path. Independent agencies can offer those jobs and need to employ these young people to ultimately replace the aging baby boomers. Wouldn’t it be great to have this new young talent be mentored by the career professionals they will ultimately replace? Here again specific industry training is needed but it is readily available and in a cost effective way.

These new young employees bring a fresh perspective and significant knowledge of how to use technology to improve the quality and speed of the service you provide your clients. They like to get involved by offering their suggestions and creativity. They are upbeat and look for the positive ways to achieve their goals. Not only can they learn from you, you can learn from them. So do we as an industry reach out and grab these young people making them a part of our agencies? Do we create opportunities for those that want to be entrepreneurs? Do we hire and train these bright young people making them the leaders of our agency staff? The alternative is to watch the sand in the hourglass flow completely out and then deal with the inevitable tsunami about to hit our industry.

I love this business because I understand the significant role it holds. It has been very good to me and I have many friends and acquaintances from my years in it. I want to see it grow into the future. I hope there are others like me out there that feel the same way and want to do what is necessary to achieve its continued success. The potential demise of the independent agency system because of an inability to attract young talent would be a great tragedy!