The worldwide economic collapse has every industry reeling, and insurance is no exception. Here in Florida, agencies large and small are making adjustments. Because of decreasing premiums and exposures, some are pulling back from hiring; others are laying off employees. And while a handful of aggressive companies are exploring new products and services to build revenue, many are simply in a holding pattern, waiting to see which way the insurance industry winds blow as the year progresses.
Like many companies, Insurance Office of America (IOA) in Longwood has experienced downsizing, although its layoffs have been "minimal," and conducted to ensure efficiency and stability, according to Corporate Recruiting Manager Marnie Blaser. IOA is Florida's largest privately held insurance agency with 23 branch offices in eight states, and the nationwide downturn has touched the company on both professional and personal levels.
"We have employees with family members who have been laid off. We have long-time clients who have closed their doors. We have carriers threatening to leave the state of Florida," Blaser reported. "Our agency does have a strong foundation, and we are relying on that foundation and a positive outlook to take us through the uncertain days ahead. We are working smarter, not just harder, and seeking new solutions to the newly developing challenges."
However, Blaser said that as tough as it has been, "I don't believe the insurance industry job market has been as dramatically affected as other industries."
Streamlining the Office
At Sihle Insurance Group in Altamonte Springs, staff is down six positions just since January. According to Operations Manager Greg Nulph, who oversees Sihle's human resources, four employees, all in support positions, were laid off because they were not performing up to expectations, and the others resigned to take other jobs and were not replaced. Given different economic conditions, that might not have been the case.
"Like everyone else, the economy has affected our income, which is driven by commissions related to premiums, which drives payroll and receipts. Business is down, especially in construction where we have a lot [of clients]," Nulph noted.
Scott Kotroba, president of the insurance career Web site GreatInsuranceJobs.com, and OrlandoJobs.com, a local job search board for Central Florida, says the slimming-down strategy is mirrored across the state. He reported that insurance has taken a much larger hit in the last few months compared to the last year. "Many companies have gone into a wait-and-see pattern," Kotroba said. "Obviously the industry is not immune to layoffs, but more times than not those layoffs are an opportune way to 'clean house,' either by eliminating non-performing departments or people, or reversing bad business decisions. Although for the most part companies want to hire, and many need to, they are hesitant to be the first to jump back in."
A February survey by Kotroba's companies on hiring projections in Central Florida tallied 80 open insurance jobs, at least half of which were commission-only sales jobs. The study also showed that the companies surveyed were poised to hire 355 more employees by the end of 2009.
Another bright spot of the report was the revelation that the insurance industry is one of the few fields currently hiring for entry-level sales jobs. "The insurance industry is well-positioned as one of the leading industries to hire entry-level sales people," Kotroba said. "Agencies have in-depth training programs to cultivate promising talent, but not every new recruit is well-suited to this industry, so agencies are smart to have detailed measurement tools in place to determine future success."
Some employees who may not excel at sales may be directed toward the support sides of their agencies, a practice which in other years has worked well. Unfortunately, the support staff is at the wrong end of today's budgetary cuts. Slimming down on expenses while continuing to provide a continuous level of service to existing customers and seek out new revenue streams is the recipe for survival that smart companies are using right now.
Pitching In
To help offset the loss of support staffers, Nulph and Blaser both said their sales agents are pitching in. "Some agents have put more office time in to help their accounts feel as confident as possible," explains IOA's Blaser. Nulph, at Sihle, added, "The work still falls mostly on the account managers and staff, as the sales agents jobs are to get out there and sell, but everyone pitches in when needed."
Blaser says this back-to-basics approach can bring about a positive perspective.
"Everyone is aware that the changes made are an effort to keep the company strong and productive. We have all worked to be careful with the consumption of office supplies and electricity, anything that will help the organization run more efficiently."
GreatInsuranceJobs.com's Kotroba believes the strength of the sales side of insurance will be its savior. "Companies have done a lot of marketing over the years that has been successful bringing in business for the sales teams to manage, but in these times, they need that same sales team to go out and cultivate that business," said Kotroba. "That's why we see such large projections for hiring in this industry throughout 2009."
Despite the economic challenges and cost-cuttings taking place at most companies, Blaser reported that IOA has made no changes to pay methods, scales or commissions. Kotroba believes that is key to attracting sales people with excellent lead generation and networking skills, the kind who will help their agencies survive this economic downturn. "The major allure of the sales side of the insurance industry is money," Kotroba said. "Compensation plans for successful sales people are very lucrative. The only limit on your success is you."
Sara Bridget Au is a marketing consultant for www.GreatInsuranceJobs.com.
EDITOR'S NOTE:
In a previous posting of this article, the company affiliation of Greg Nulph was incorrect. A different company was cited in that earlier story. We regret the error.
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