Insurers Help Tutor Agents To Fill Gaps, Spur Growth Carriers offer generic training programs, figuring to earn bigger piece of expanding pie

Agent training programs provided by insurers, which once consisted largely of proprietary programs, have come a long way toward the agents way of thinking, offering courses to train staff and help agencies grow, one agency owner contends.

Changes in insurer training can be linked to a softening market, according to Paul Barrios, chief executive officer of Cloverleaf Insurance Brokers in North Miami, Fla.

“Remember, weve been in a hard market,” he said. “Whats happening is they are going to start relaxing underwriting, theyre going to let people in, they want growth,” he said.

Mr. Barrios said he took a training program with Travelers that helped him view his business differently and implement important changes to his agency.

For example, he said, he now knows when to turn away business when a company offers extremely low rates. One carrier, he said, offered rates lower than any other. Mr. Barrios said he turned away the business because he questioned whether the carrier would still be in the market in a years time. Losing a carrier would mean scrambling to find new coverage for his clients.

“The Travelers program was unbelievable,” he said. “I couldnt wait to get home and implement some of it.” He was so enthused with what he learned that he now helps train other agents with the Travelers program, he noted.

The program is offered by Travelers personal linesselling under the Travelers name, which is a member company of the newly merged St. Paul Travelers.

Skip Daigle, vice president of agency development and sales in Hartford, understands what agencies face. Although he has been at Travelers for 30 years, he empathizes with the agency side. “Its a tough business to be independent and grow your agency,” he said. “[Travelers] learned in the late 1980s that we were not helping the agents grow.”

He continued that most insurers, “ours included, would look at book transferswhere one carrier tries to get another carriers book of business within the agency. Sure, Travelers wants to do that, but we also want to make the agency bigger.”

Now, he said, the company is dedicated to helping the independent agent take back market share.

“Thats a change in philosophy,” he said. “Weve gone toward a more long-term approach. If we can help the independent agent grow and take back market share, our position in the agency gets enhanced just because their pie gets bigger. That was rocket science on the part of our company. Most carriers just dont do that.”

In partial response, Travelers developed a five-day workshop on agency operations, which is free to agents, who pay only for their transportation costs. “We absolutely mention nothing about Travelers in the whole workshop. Its all about helping the independent agents grow,” he said.

Those who attend the workshops include “mom-and-pop representatives and people from the brokerage houses. It takes the whole spectrum of the independent agency process,” he said.

The entire workshop is spent helping the independent agent identify, understand and act upon his or her philosophy. “Some are growth, some are harvest [profit],” he said. “Those are typically the defining philosophies. We get them thinking about anotherlong-term profitable growth.”

All agency functions are measured, he noted. Afterward, participating agents typically “outperform their peers in the region and countrywide 3-to-5 percent in policy growth.”

Although most business owners talk about long-term profitable growth, “very few people know how to execute that strategy,” he noted, “because we all get caught up in the short term.”

Setting up an agency or a company for growth is easy, initially, “because you just change your pricing,” he said. “If you are the company, you reduce your price and you can grow. And if you are an agency and you want to grow, you sell lowest price and you hire more [customer service representatives].”

But what happens in these situations is that “pretty soon you run out of profit,” he continued. “So the carriers now have to increase price and the agencies have to get rid of staff. They go back and forth on this pendulum, and its not only disruptive, its destructive within our industry confines because you never get off of that short-term philosophy.”

How can this type of situation be remedied in an agency? He gave an example, which he uses in the program. “Do you think you can grow personal lines if the CSRs are overworked? Its probably not possible.”

Yet he said when he asks a room full of agency owners if their CSRs have enough time during the day to do their job, “nearly all would say yes.”

The CSRs, on the other hand, “say absolutely not.” How to determine who is right? The CSRs workload and available time are objectively benchmarked, he noted.

So the addition of a new agency automation system, intended to enhance productivity, can become a distraction. “And who does it distract?” he asked. “The CSRs, who are already overworked. So you have six-to-12 months of training and learning curve, and many carriers dont understand that.”

Mr. Daigle said the response has been so great that agents have requested many more workshops. As a result, the process has been expanded regionally to a shorter workshop.

In 2003, 172 took the workshop and this year “we will do north of 200,” he said. In total, more than 1,000 agencies have gone though the training, “and some of them didnt even have a contract with Travelers at that time. But again, our philosophy is to help the agency grow.”

The workshop has received such a positive response, according to Mr. Daigle, that a book is in the works”Breaking the Code: Procedures Must Match Philosophy”scheduled to come out by the third quarter of this year. “Were going to try to keep it free,” he added.

Meanwhile, at The Hartford School of Insurance, Shirley Woods, its director, said the company has a blended learning approach combining self-study with classroom training.

Because more young people are entering the profession, she said, more Web-based training has been integrated into the programs. The classroom training programs vary from three-to-seven weeks and are designed to help producers and CSRs “hit the ground runningto be able to produce new business as soon as they get back to their office,” she said.

The company trains independent agents and brokers in a number of locations, but primarily in Hartford and Orlando, Fla., although “this year we also started taking our training on the road,” she noted.

The Hartford program consists primarily of entry-level training for new producers and CSRs in commercial and personal lines. “We started in 1998 in response to agents need for training,” she said. “That year we trained about 150 producers. This year we anticipate training more than 750 new producers and CSRs.”

Ms. Woods said classroom activities combine roll-playing, exercises and lectures to prepare the students for when they are on the job. The training is industry-based rather than proprietary, “because we think that is what best serves our independent agents.”

The first thing they are taught is a comprehensive course about the insurance industry in general, “jamming months worth of content into a seven-week training program,” she said.

Participants stay in Hartford for two-to-three weeks. After they take the course, they are equipped to “go out and produce business,” she said. “Theyve got the confidence, the knowledge and the skills to go out, start meeting with clients, and to start producing business for their agency.”

Attendees use role playing to learn to communicate with clients and to better comprehend technical concepts.

They also learn to market to their carriers and to effectively communicate with their underwriters, “regardless of what carrier they are dealing with, to get the best possible proposal for their client.”

Commercial insurance, she added, is a “complicated industry and we find that people who dont have the technical expertise cant be as successful.”

The program helps agencies prepare their people for the rough-and-tumble world of insurance sales and service, she said, noting that many agencies are having a difficult time hiring experienced staff. “We found the need for our training has really increased in the past few years,” she said.

Ms. Woods said that younger people coming into the industry not only want the training, “they feel they deserve the training.” In fact, agencies that dont offer training may be more likely to lose new employees, she added, noting that “agents are telling us this training actually improves their [employee] retention.”

All of the programs are approved for continuing education credits in all states, but ongoing CE programs are not offered in this program, she noted.

A few advanced training seminars are offered each year, however, which are approved for CE credit. An example of an advanced topic is business income”a complicated topic that even those in the business for awhile dont always understand,” she said. “This helps them to explain the benefits of those types of coverages to insureds.”

Paul Pruett, vice president of global sales training and strategic marketing for the Chubb Group of Insurance Companies in Warren, N.J., said Chubb also offers a high-level program to agents.

On a local level, Chubb conducts up to 400 CE classes a year, typically on a specific product or insurance coverage, he said.

The other area is an agency education division that provides programs for agency owners or principals, agency managers, and new producers for “our strategic growth agencies throughout the United States and Canada.”

This year, he said, seven producer schools will be offered, including Chubbs premier programthe Chubb Producer Development Schoolwhich lasts a year, available in the spring and fall.

Although each of the divisions are approached differently, training for the manager and the principal consists of advanced management, operations management, sales management and individual skills such as negotiations.

“We believe that the partnership to educate our agent does create a closer bond between our agents and us,” he said. “Agents who attend these classes tend to be our fastest growing and most profitable agencies.”

He estimated that about 10 percent of Chubbs agenciesabout 400go through the carriers training programs.

The year-long premier program is divided into four parts. The first features e-learning modules, the second is two-week classroom training, the third is a combination of e-learning and telephone conferencing, and part four is back in the classroom. He said this program is a generic industry training and that Chubb products are not taught until phase four.

Phase one covers the fundamentals of ISO commercial coverage, although six months of work experience are required of attendees so that they have some basic knowledge of the insurance industry. This way, by the time they get to the classroom portion, which teaches basic sales and technical training, they have a baseline of knowledge about the business.

He said Chubb has learned that the training and the willingness of an agency to “commit some human and some financial resources to partner with us in training an individual differentiates agencies,” making for a higher growing, more profitable agency.

He added that Chubb is not looking to replicate training and only provides training that is not offered elsewhere.

Reproduced from National Underwriter Edition, June 25, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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Insurers Help Tutor Agents To Fill Gaps, Spur Growth

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