Tag Archives: reagan consulting

A Contrarian Looks ‘Back to the Future’

A recent week started with reading a page by Paul Carroll from his Innovator’s Edge platform. The title question was: “Will Apple enter insurance? Google? Microsoft? Amazon?” His opening statement was, “Apple’s market value crested $1 trillion last week, and its big tech brethren Google, Microsoft and Amazon aren’t far behind, all are valued north of $800 billion…”

I wasn’t shocked until he said, “All have extensive data about customers. And all have the size to tackle mind-bending problems that insurance faces – by contrast you’d have to combine AIG, Prudential and Allstate just to surpass $100 billion in market value…”

A day later, someone sent me Reagan Consulting’s “The Golden Age of Insurance Brokerage.” As I read through this short update, I could almost hear, “Happy days are here again” playing in the background for the brokers. The following captures the essence of this document: “We are living in the Golden Age of insurance brokerage. There are so many good things happening, it is hard to keep track of them all.” This was followed by six bullet points providing evidence of why the brokers are so happy. (No mention was made of insurance buyers, who may not be as HAPPY!)

A friend then sent me a link to “The Death of the Old School Agency,” by Michael Jans. This is a more in-depth view (30-plus pages) of the world as it may or will be.

From the executive summary, we learn that today’s agent faces a new world of:

  • Rapid changes in consumer behavior and expectations
  • Emerging, existing and well-funded competitive channels
  • A rising millennial generation with different expectations, both as consumers and workers
  • A pace of change unlike anything they’ve ever seen before.

Depending upon who, what and where you are, this report will bring good news or bad news, but nonetheless – it is news that (I believe) every agent needs to hear, consider, ponder and then decide on.

Agencies tomorrow are not “your daddy’s Oldsmobile.” Ask someone older than 40 to explain the phrase. This was the beginning of the end of a legendary line of General Motors automobiles and probably a foreshadowing of the collapse of General Motors.

I encourage you to study all three of these documents – they are well-written by very successful folks. Their ideas should be carefully considered, and, if properly adapted to your circumstances, all can improve your results. That is – as long as the world goes as “we the people” in this industry think it should. What follows is my contrarian view – less “raining on your parade” and more clearing the air as you look to the horizon in tomorrow’s consumer-driven economy. We are not in charge. We today are wagering on our individual and industry’s future. Place your bets. The market will pick the winners.

See also: 3 Myths That Inhibit Innovation (Part 3)  

This contrarian will offer his ideas by looking “back to the future.”

There will remain great opportunities in our future, but these will require transformational change. From today’s selling in an industry that is product-defined and product-driven, to a new client-defined and client-driven marketplace where we will facilitate our client’s buying – solving their problems and meeting their needs. In the competitive nature of tomorrow’s world – we’ll have to use artificial intelligence (AI) to anticipate these needs and deliver solutions before our clients “go shopping.”

Some of the people, gifts, expertise, disciplines, skills, etc. we’ll need will be much different than the mechanical process we use today. We will need communicators (verbal and nonverbal), empathizers, artists, inventors, designers, storytellers, caregivers, consolers, big picture thinkers, storytellers, caregivers and “techies.” This is not an all-inclusive list. (Consider reading “A Whole New Mind,” by Daniel Pink.)

Warren Bennis offered the following wisdom decades ago: “The factory of the future will have only two employees, a man and a dog. The man will be there to feed the dog. The dog will be there to keep the man from touching the equipment.”

Consider the following – brief observations from one man’s experience:

  • In 1978, Fireman’s Fund/Famex Agents offered a GM-endorsed insurance program for dealers. I was the SW Louisiana agent. In those days, the No. 1 concern of GM and its dealers was that GM would reach 65% market share and the federal government would break GM up into separate companies, Chevrolet, Pontiac, Buick, etc. GM’s arrogance, the dealers’ complacency, foreign competition, a poor product and a marketplace wanting change reshaped their world. GM never made it to 65% market share. I believe the insurance industry is ripe for a similar transformational experience.
  • In 1994, I was speaking to a bank in St. James Parish (Louisiana) about change. I said, “Today, GM, Sears and IBM are the kings of their respective jungles. I believe, in my lifetime, one of these companies will fail.” I was laughed off the stage. Fourteen years later, I was vindicated with the bankruptcy filing by GM. I personally believe that I’ll also prove right on Sears.
  • In June 2008, I was an instructor for attendees in a risk and insurance class at the KPMG Advisory University in Chicago. This was a continuing education week for KPMG consultants. A rookie consultant asked, “How does an insurance company fail?” I explained with the Champion Insurance story.

Then he asked for an example of a “rock solid” insurance company. I said, “AIG.” The KPMG senior partners in the room nodded in agreement. Less than 100 days later, AIG was functionally bankrupt, requiring a $182 billion bailout by the government. None of us saw that coming. (I’ll bet you were surprised, as well.)

As I wrap up this article, hoping I’ve stimulated a much more important discussion about the future, consider the following:

  1. Companies valued at $100 billion are “big” until measured against trillion-dollar operations in a world in transformation – especially if the giants have better technology and data!
  2. Apple, Google, Microsoft and Amazon (AGMA) are kings of their respective jungles. Yet these companies are not even as old as the majority of readers of this column (with the possible exception of Microsoft and Apple, founded in the mid-1970s). Why would we think that our “old and stoic” industry is “safe” and “promising” for tomorrow? Are we celebrating our past when we should be planning our future?
  3. Do you think that any of your clients who have recently received a rate increase will be as enthusiastic about the profitability of our industry and the future of the world of brokers as stated in the article offered by Reagan? I’ve rarely (if ever) heard a client celebrate the profitability of our industry when it is an expense to theirs…
  4. Generational changes, social media and our societal rethinking of issues of race, gender, ethnicity, family, values, economic models (socialism / capitalism), etc. may result in our going in directions that we, 10 years ago, would have never considered possible.
  5. Has our industry let the government get its nose into our tent/economic system. NFIP has been in this industry as long as I have. The private sector didn’t want to address the flood risk. Now, these nearly 50 years later, the flood program is a government program and not sustainable. Unfortunately, the government may be ready to have the camel stand up in the tent? Medicare for everyone is no longer a crazy idea. It may not work, but….
  6. If the insurance industry was being designed today to do what it does, do you really believe it would be what we have? If you answered yes, please reread the question!

See also: What Is Really Disrupting Insurance?  

Bookstores, travel agencies, video stores, etc. were important in our communities of yesterday – UNTIL THEY WEREN’T. Should we begin redesigning our own operations and industry and future before a competitive innovator does it for us?

How New Producers Can Get Fast Start

Starting a career as an agent or broker is not a sprint. It’s a marathon.

Just like a marathon runner intensely trains before running those 26.2 miles, the most successful insurance producers are those who formally hone their skills through training programs from their first day on the job. Starting early is critical, considering that only about half of new producers succeed.

Companies looking to train new producers should look for programs that not only teach new producers the technical insurance information needed to succeed, but programs that also focus on sales coaching and soft skills. Programs with mentoring to help new hires chart their career and learn their organization’s specific culture add a personal touch and embed accountability checkpoints.

One such program that hits on all of these elements is The Institutes’ Producer Accelerator, featuring Polestar, which coaches new producers via one-on-one guidance sessions and provides onboarding over a 25-week period. In successfully onboarding new producers and validating them more quickly than industry averages, we’ve gleaned a number of best practices to help companies put their new producer hires on the road to success.

Agency culture and priorities come first

Before a new producer unpacks his or her coffee mug on the first day, companies should already have a formal and individualized plan to best get the new hire up to speed.

For example, discuss specifics on who the new hire is and his or her background, and review what responsibilities the mentor and agency have in helping the new producer succeed.

See also: Why You Need Happy Producers (Part 2)  

That mentor-producer relationship is crucial to a successful program. In our Producer Accelerator program, this manifests in the new producer working closely with his or her mentor and eventually presenting an at-a-glance business plan that identifies production, retention, efficiency and profit goals, as well as specific, behavior-based, high-payoff activities to achieve them.

As new hires progress, they move from frequent one-on-one sessions with coaches to group webinars where they interact with four or five other new producers from around the country. This gives up-and-coming producers a chance to compare notes and share what’s worked (and what hasn’t) with peers in a noncompetitive setting. As producers gain experience and share best practices, they develop sales and technical skills.

The key is to provide a program where new producers do more than just sit at their desks reading for their first six months on the job. While on-the-job learning may seem risky, when new producers are paired with a mentor and coach, they have the support system needed to make sure they do the right things in the right way – what we call getting to the high-payoff activities.

The benefits to employers — and producers

When formal onboarding programs with interactive, mentor-based training are used, employers and new producers share the benefits of validating producers more quickly. In fact, they benefit agencies in three specific ways:

  1. Providing structure — Every agency wants new producers to be successful. The trouble is that principals and would-be mentors have books of business of their own and don’t always have time to devote to a new producer’s needs. Programs like The Institutes Producer Accelerator offer an agency’s leadership the peace of mind of having a plan in place for new producers’ success. And new hires, especially those just out of school, benefit from an established onboarding program. That structure is a huge benefit, especially for the generation coming into this career that is looking for more guidance than “Here’s your desk. Here’s your phone. Go.”
  2. Providing hands-on, on-the-job coaching — Providing new producers with one-on-one coaching with trained development consultants from outside the agency drastically increases producer success rates, according to research from Reagan Consulting. Confidentiality between coaches and producers is key to establishing trust and enhancing skills, just as we’ve found in our Producer Accelerator program.
  3. Providing clear goals with set deliverables — In addition to compiling and presenting a business plan, new producers should work with coaches and mentors to set production, retention, efficiency and profitability goals. This sets a clear path to agency success and gives producers a blueprint for charting their ambitions for the rest of their careers.

Moving from newbie to seasoned producer

For development coaches, watching new producers find their footing and succeed is nearly as rewarding for the coach as it is the agency and employee.

See also: New Channels, New Data for Innovation  

Speaking from personal experience, I think there’s no better feeling than getting a call from someone bursting with excitement because he or she just landed an account after working on it for months.

Even when producers discover this career path isn’t right for them, formal and extensive onboarding programs helps them realize that sooner rather than later, which benefits everyone–especially the producer. But a vast majority of new producers who go through our program are successful, as the program builds relationships and perseverance.

After all, successful producers aren’t affected by rejection. It’s a position that requires a commitment to building relationships, making connections and planting the seeds. If producers can focus on the right activities and persevere, we’ll give them the rest of the tools to make it.

Learn more about The Institutes Producer Accelerator.