Specialization Poses Unique Challenges

Additionally, she said many states are imposing their requirements on both resident and nonresident agents, adding, "I hope that is not a trend."

Another area gaining increasing attention from regulators–who often dictate education requirements through continuing education mandates–is ethics. Over 30 states, she noted, require some amount of ethics training in every license renewal period, with the requirement falling generally between one and four hours.

Ms. Davidson said she has heard of an instance in which as much as 20 hours of a CE training was taken up by product-specific training and ethics instruction. "They were left with just four hours of general continuing education," she noted.

That kind of thinking may be part of the problem, however, according to Steven Horner, of the organizational consulting firm Horner and Associates in Harleysville, Pa.

"Everyone's so obsessed with CE [requirements]," he said, arguing that for many agents, the focus of CE is meeting the mandate for time rather than the content of the training itself.

"They end up going to things for the locations or the convenience," he said, contending that many agents aren't looking at what they need to learn, instead choosing training sessions because "it's fun to go to Florida in February."

However, Madelyn Flanagan, vice president of education and research for the Independent Insurance Agents and Brokers of America, disputed the idea that agents are focusing on the specifics of particular products rather than the big picture.

Instead, she argued that for many, the more specialized training builds on a basic foundation of industry knowledge. "Many agents feel like they have a good understanding of the basics," she said, and now look for more specialized instruction to understand "more bells and whistles" from new and more complex products.

Among the main reasons for taking classes devoted solely to sophisticated products, she said, is that offering more advanced products often carries with it the potential for greater errors and omissions risk.

Additionally, she said, "more and more agents are being good risk managers," and have to look beyond the basics of the insurance industry.

The Internet is playing a significant role in helping agents find the information and education they need, according to Ms. Flanagan, who said the Web can help agency owners ensure their producers are keeping pace with developing products, issues and industry trends.

The IIABA offers a "Virtual University" for agents–a system Ms. Flanagan said can be used by agency owners to create a curriculum for their firm or a specific producer. The system offers what she called "the ability to build your track of learning, online."

Doing so would not necessarily involve taking courses soley online, but an agency owner could set goals and requirements for the producer–such as classes to be taken either online or on location–and news or other articles for the producer to read.

However, the problems of increasing specialization extend beyond agency offices. For those working for carriers, "new people are not being taught the business, they're being taught the desk," according to Mr. Horner.

Many carrier employees aren't being trained to understand how insurance and the overall industry works, he said, because it's "easier and quicker" to simply teach them the few operations they may be involved in.

Additionally, he said the training being given to carrier employees leaves gaps in what he calls the "soft" areas–such as communications and leadership–that could have an effect on a company's bottom line.

For example, "we don't teach the underwriter how to say 'no' so that the agent is not alienated," he said.

Similarly, he contends, while companies may have well-trained adjusters, if those adjusters aren't skilled at dealing with a policyholder making a claim, then the company may lose that business. "A claims adjuster may know the coverage inside and out," he said, "but if they tick off the insured they lose the customer."

As another example of the dearth of "soft skills," Mr. Horner said he has heard of many instances in which a producer has become very upset with an underwriter, and not because the underwriter told them no or made a mistake.

"It's not for a lack of technical skills," he said. "It's not that the underwriter said no; it's how they said it."

In fact, he added, many carriers are relying on employees to already have their own knowledge set when they start work, by bringing in people who have been in the business. "My experience is that carriers just aren't bringing new people in"–meaning they also don't have to provide training, he said. "Instead, they're basically stealing from each other, and at some point that's going to blow up."

While carriers are getting more technically well-trained and experienced people right now, Mr. Horner noted that many of those workers are rapidly approaching retirement–meaning there could be a vacuum of talented and trained personnel in the near future.

"The boomers are starting to retire," he noted, "and the carriers have not invested to bring in new people."

The National Association of Surplus Lines Offices has recognized the need for attracting younger people to the industry and is responding with education and recruitment programs.

"We see that it's already hard to find people just by typical methods," said Steven Gross, co-chair of NAPSLO's communications and technology committee.

To deal with the situation, NAPSLO has established a program aimed at educating students about potential careers in the insurance industry.

"We just wanted to try and bring more young people into the industry," he said, adding that NAPSLO members felt that not enough was being done to "bring new blood" into insurance.

The group established a Web site–www.insurancecareersnow.com–and has sent representatives to various schools in an effort to spread their message.

Additionally, NAPSLO has been working with college-aimed Web sites to reach out to students, and earlier this year sent a "blast" e-mail to over 10,000 juniors and seniors promoting the Web site and careers in insurance. That e-mail–which Mr. Gross noted was sent in May–has generated over 1,000 returns from the target audience.

"We're trying to tell them that [insurance is] actually a good industry," Mr. Gross said. "It's not something you need to be a business major for. There are a wide range of opportunities."