A survey that found insurance agents and risk professionals are thinking more about retirement underscores the urgent need to train a younger crop of professionals to take over the business, according to one education researcher.
In a report titled “The Looming Professional Gap: The Aging of The National Insurance and Risk Management Workforce,” a survey found that while many agents may not be ready to leave their agencies now, a significant number have every intention of slowly fading into the sunset before retirement.
More than 3,000 agents and risk professionals responded to an electronic survey earlier this year asking them about their retirement plans, according to Andrew Grimes, research associate for the National Alliance for Insurance Education & Research, based in Austin, Texas (http://www2.scic.com/).
The survey targeted agents in the baby boomer generation (born between 1946 and 1964) and older, and resulted in the National Alliance's 20-page report, authored by William Hold, president of the National Alliance, and Mr. Grimes. It found that:
o The average age of insurance agents responding to the survey was 56 years old.
o The average that the agents surveyed are targeting for retirement is 66.
o However, the consensus desire among agents–59 percent of respondents–is to continue working on a part-time basis until the age of 70.
Mr. Grimes noted that this gives the agents planning to retire at 66 about 10 years to pass along their expertise to a new generation of producers.
Among the top factors that will go into retirement are financial well-being, followed by the cost and availability of health insurance. Rounding out the top-three is the ability to continue doing their job.
Yet agency perpetuation came in dead last, Mr. Grimes reported. In addition, 67 percent of those surveyed said their organization is not ready, or they do not know if their agency is ready, for the agent's retirement.
A major issue with passing on the agency to a new generation is that many agencies are small-to-medium in size, determined by the size of the population they service. Seventy-four percent of the agencies surveyed consist of 20 employees or fewer.
As agents consider retirement, the survey found that they are not optimistic about their prospects.
o Sixty-six percent said they will experience a lower standard of living in retirement.
o Thirty-one percent believe their living standard will not change at all.
o Eighty-one percent said the economic crisis had a negative impact on them. Indeed, many said they will have to delay retirement because of the crisis.
The prospect of working part-time has many–51 percent–wanting to work from home, while 74 percent are interested in telecommuting and working between 16- and 20 hours a week.
While many agents say they are not ready to leave, 67 percent of respondents said they are considering it, and that only underscores the need for a younger generation to get into an educational program and work with experienced agents to learn how to make sales calls and service clients, according to Mr. Grimes.
He added that education and course work are necessary to rounding out that experience.
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