Filed Under:Agent Broker, Agency Management

Extreme Makeover: The Independent Agency Edition

With agency principals rapidly aging out of the system, the insurance industry needs to completely rethink its approach to the millennial generation.

In an industry in which the majority of the workforce is older than 40 and many workers are facing retirement, there is no doubt that recruitment and retention efforts need an extreme makeover. For the insurance industry to attract and retain the best talent, we need to be unified in our efforts to engage the next generation of insurance professionals.

Engaging the Next Generation

More than 100 industry leaders asked The Institutes and The Griffith Insurance Education Foundation, at the close of The Griffith Foundation’s Insurance Education Summit, to lead this charge in September 2011. Three main objectives must be accomplished through the Engaging the Next Generation initiative:

  1. Learn what millennials want from their employers
  2. Create a unified industry message
  3. Create one place for students to access information on the industry.

To learn what millennials want from their employers, The Institutes and The Griffith Foundation conducted a Millennial Generation Survey in February 2012. The survey explored attitudes about jobs and what appeals to members of the millennial generation. It also focused on attitudes about the insurance industry and insurance jobs specifically.

Related: Read the article "5 Steps to Effective Agency Recruitment" by Mark Shlien.

The survey revealed a need to increase awareness of career options in the insurance industry. Only 5 percent of millennials said they were very familiar with the insurance industry and the types of careers it offers. Revealing a disconnect, 61 percent of respondents said they would like jobs that include analyzing risks and recommending solutions, yet fewer than 1 in 10 said they were very interested in working in insurance.

A large opportunity exists to increase interest in working in the insurance industry. Almost half of the millennial respondents (49 percent) said they found it extremely or very appealing to work with people to solve problems, and about one-third said they found it fairly appealing.

The use of websites also is important to increase awareness of options in the insurance industry. Millennials’ top resource for information about industries and jobs is their family and friends (56 percent), followed closely by the Internet. In addition, millennials are more likely to use social media sites for industry information compared with older generations.

The second objective of the Engaging the Next Generation initiative is to create a unified industry message. The Engaging the Next Generation Group, part of The Institutes, acts as a centralized location to gain feedback from the industry regarding messaging. This group also reaches out to the industry through a series of activities to spark conversation and engagement. The Institutes, the CPCU Society and The Griffith Foundation planned these activities, which included publishing articles and blogs. Visit the Engaging the Next Generation group and provide your feedback. 

The final objective of the Engaging the Next Generation initiative is to create one place for students to access information on the industry. The Institutes and The Griffith Foundation are developing a web-based platform to include links on the site to industry employers and their internships and career opportunities. 

Attracting Talent

To attract new talent, the insurance industry must overcome three main barriers:

  1. General awareness of the industry
  2. Specific career option awareness
  3. Negative perception of the industry.

The Millennial Generation Survey revealed a lack of general awareness of the insurance industry. One main purpose of the insurance industry is to help people in their times of need. Positioning the insurance industry as a benefit to society would appeal to millennials, who value social responsibility and like to know their work is making a difference in the lives of others. 

Millennials also value job security and opportunities for rapid career growth. In the current economic climate, many college graduates are struggling to find employment. The insurance industry offers one of the highest placement rates as compared with other businesses. Nearly 100 percent of risk management and insurance majors receive job placement before graduating, according to the December 2011 “Flipping the Switch” article that appeared in American Agent & Broker.

Although the insurance industry is hiring, there is a lack of awareness of the specific career options available. The perception of insurance jobs is based on the limited experiences millennials have had with the industry—mostly with car insurance. The Millennial Generation Survey showed that millennials associate insurance careers with sales positions. Internships can help overcome the lack of awareness and attract new talent by providing access to the variety of career opportunities in this industry.    

Related: Read the article "Employees: Your Greatest Asset and Your Greatest Challenge" by Christopher Tidball.

For those who have some level of awareness of the insurance industry, the perception is not positive. Most people believe insurance jobs are boring. To overcome negative perceptions about the industry, we need to highlight the many benefits of a career in insurance.

The Motorists Insurance Group created the Accelerated Career Training (ACT) Program to provide training in property-casualty insurance and risk management. “The ACT Program is geared toward reaching out to Midwestern universities with the idea of making students in their junior and senior year aware that our organization has this program,” said John J. Bishop, CPCU, CLU, chairman and chief executive officer of The Motorists Group and member of The Institutes’ board of trustees. “In the last 6 to 8 years, we attracted about 75 recent college graduates through the ACT Program. A number of people we have hired through this program have moved on to enter the agent/broker workforce.”  

As a career, insurance is:

  • Rewarding. Insurance professionals help people rebuild their lives after a disaster. Insurance also provides a foundation for businesses and communities by protecting them from devastating losses. Positioning insurance as a career that helps others would appeal to millennials, who value these qualities.
  • Challenging and exciting. It offers glamorous options such as providing risk management for concerts and events or insuring celebrities. It also offers innovative options such as providing risk management for construction work, buildings, cyber risk, marine insurance and healthcare. Insurance jobs can even include working for special investigation units.
  • Successful. A career in insurance prepares individuals to be successful in business. The insurance industry offers rapid career growth and leadership opportunities. Many of the top business professionals are insurance executives.
  • Flexible yet stable. Many insurance jobs offer a healthy balance between work and personal life. Although many other industries were negatively affected by the economic downturn, the insurance industry has remained stable.

The web-based platform being developed by The Institutes and The Griffith Foundation can convey these messages to millennials. Employers also should offer internships to provide a firsthand experience with meaningful work in insurance. 

“The importance of attracting the next generation is a hot topic,” said David S. Medvidofsky, CPCU, CIC, CRM, vice president of internal audit at The Main Street America Group and president of the CPCU Society. “We have found that maintaining a laser-sharp customer focus and highlighting the societal value of insurance as a means to rebuild lives following a loss, have increased employee retention and satisfaction. It also has increased our attractiveness to prospective employees.”

Retaining Talent

Not only does the insurance industry need to attract new talent, but it needs to retain that talent. According to a Deloitte study, “Talent 2020: Surveying the Talent Paradox from the Employee Perspective,” employers face three main challenges to retaining talent:

  1. Engage employees with meaningful work
  2. Focus on “turnover red zones”
  3. Create trust between employees and leadership.

The study found that employees value meaningful work over other retention initiatives. Managers should set objectives for their staff that are aligned with the company’s goals. If employees are unable to see the connection between their work and the organization’s strategic goals, they will pursue meaningful work elsewhere.

The Deloitte study also suggested that employers focus on “turnover red zones,” defined as “employee segments at high risk of departure.” According to the study, employees with fewer than 2 years on the job expressed the strongest turnover intentions, with millennials reporting the highest turnover of any generational group.

Related: Read the article "Flipping the Switch" by Jason Terrell.

Professional development is the key to retaining top talent. The Millennial Generation Survey, conducted by The Institutes and The Griffith Foundation, revealed that millennials are more interested in opportunities to learn compared with older generations. They also are more interested in career advancement. 

The Institutes offer a variety of professional development opportunities to assist employers with retaining their employees. Our survey of Chartered Property Casualty Underwriter (CPCU) designation completers revealed a direct connection between professional development and career advancement:

  • Ninety-one percent of CPCU designees saw an increase in job opportunities.
  • Eighty-five percent of program completers said earning the designation fast-tracked their career progression.
  • Seventy-four percent believed earning the designation helped them gain a promotion.
  • Seventy-five percent felt it helped them gain a salary increase.

For the insurance industry to retain top talent, employers need to be willing to invest in their employees—their most important asset.

The final challenge facing employers, according to the Deloitte study, is the ability to create trust between employees and leadership. Employees who trust their leaders are less likely to leave the organization. Leaders can build trust by fostering an environment of open communication, where employees are free to share their thoughts and feel their input has value.  

According to Joelle Murchison Hayes, vice president of enterprise diversity and inclusion at Travelers, organizations must provide opportunities for employees to get involved. “We have a very strong commitment to our community, and many of our employees take on leadership roles in volunteer organizations that are company partners,” she said. “We also recently launched employee resource groups that we call Diversity Business Networks. These serve to assist in both the attraction and retention of talent by acting as support networks which allow employees to network, participate in professional development opportunities and serve as resources when business needs dictate.” 

Next Steps

So where do we go from here?

Attracting and retaining talent in the insurance industry is no easy task. We must unite our efforts to create one unified voice for the industry. In addition, employers need to create internships and a career path for millennials as they join the industry. The Institutes and The Griffith Foundation have accepted the challenge to lead the Engaging the Next Generation initiative. We look forward to collaborating with the industry to generate the awareness critical to ensuring the industry has the talent it needs to succeed today and into the future.

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