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Independent Insurance Agents Face Looming Workforce Gap

by Precise Leads

June 1, 2017

If the insurance industry wants to fill 400,000 open positions, it must do a better job of recruiting millennials.

A rapidly aging workforce combined with a millennial generation apparently disinterested in pursuing an insurance career has led industry leaders to warn of an impending shortage of talent that may leave independent agencies bereft of qualified agents in the coming decade. With 693,000 insurance professionals age 50 or older — a 74% increase over the past 10 years — the U.S. Bureau of Labor Statistics predicts 400,000 job openings in the insurance industry by 2020.

The talent gap may hit the insurance industry even before 2020. Management consulting firm McKinsey & Co. pegs the average age of an insurance agent at 59, meaning one-fourth are in line to retire next year.

Even more alarming is prospect of trying to fill those slots with younger agents and executives at independent agencies and carriers when surveys indicate that millennials decidedly favor industries other than insurance. The Hartford’s 2015 Millennial Leadership Survey revealed only 4% leaned toward insurance as a career choice, which registered below construction, retail, and manufacturing (7%), but barely above wholesaling and utilities (3%). More popular choices were arts and entertainment (40%); education (36%); technology (36%); and healthcare (31%).

Replacing soon-to-retire boomers with in-house talent may not be the answer either. Although millennials will account for half of the workforce in just three years, only 27% of current insurance industry professionals are under age 35, according the BLS.

The insurance industry isn’t alone in confronting an imminent talent drain. A 2016 PricewaterhouseCoopers annual report stated bluntly that most U.S. employers are “woefully unprepared for the business realities of an aging workforce and face a potentially massive loss of skilled, knowledgeable workers. Companies that effectively recruit, train and develop dedicated future staff and leaders will differentiate themselves and set themselves up for success into the future.”

How to Recruit Millennials

The challenge of recruiting younger agents became a topic of discussion at a recent Agency Network Exchange LLC conference. ANE CEO John Tiene urged agency owners to embrace technology to appeal to millennials.

“The workforce crisis will be hardest on smaller insurance agencies with aging staff in their 50s today,” he said. “Fewer producers and personnel could have big impacts on revenue and customer service that will drive existing clients away. Tech-savvy agents who embrace mobile technologies and social media will be in a better position to compete for talent.”

In response, Tiene noted that insurance companies have initiated internship and training programs to provide younger people with an opportunity to “to explore careers in insurance and help attract talent from outside traditional channels.”

Noelle Codispoti, Executive Director of Gamma Iota Sigma, an international fraternity for students of insurance, risk management and actuarial science, said millennials choose careers based on the potential for professional development more so than salary. “Companies should be open to discussing not only compensation and career growth, but also the support they are willing to give the individual in terms of professional development, as well as the company’s community outreach efforts and commitment,” she said.

What Millennials Want

This labor predicament begs one question: what do millennials want in a career? One millennial working in the insurance industry described how the industry can make itself more attractive to people of his generation.

In an IA Magazine article titled, “Why Millennials Are Perfect Insurance Employees,” Tim Davis, Sales Manager at WorkersCompensationShop.com, wrote that the industry must market itself as a career where agents can truly help people. “Is there a better way to make a difference than knowing you can play a role in helping a person or business make it through the worst moments of their lives in one piece?” he explained. “What other industry can boast that it plays a role in every natural disaster on the planet? That’s the message the industry should lead with.”

But he also chides the industry for being behind the technology curve — a trend it needs to reverse in order to attract a younger workforce. “The transition has to happen — and the old way isn’t going to cut it anymore,” he writes. “No one can deny the potential of data, analytics, and other tech to make everything better, from the carrier experience to the agent experience to the customer experience — which means a millennial could play a big role in driving serious improvements across the entire insurance space.”

So as you recruit the next generation to guide your independent agency, emphasize the opportunity to do meaningful work that solves clients’ dire problems through insurance. Give them a role in shaping the direction of the business. At the same time, make sure you have the tech tools, whether it be internet lead generation, data analytics, or social media outreach, to enable this digital native cohort to prosper in the industry.

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