Fall Conference – What You Missed Too

Last week’s post discussed a presentation that I attended at IIAG’s Fall Conference on how to create an engaged workforce and how to use metrics to identify and resolve problems with an agency’s performance.  The other presentation that I attended at the Fall Conference was about the 2014 Best Practices Study of independent insurance agencies that was recently released.  It was given by Shirley Lukens of Reagan Consulting, which is responsible for putting together the study.  Ms. Lukens referred to herself as the “mother of the study”, which began in 1993.

The Best Practices Study looks at the top performing agencies nationwide in six categories based on annual revenue, from agencies with less than $1,250,000 to agencies with more than $25,000,000 in revenue.  It identifies how the agencies in each revenue group are performing in various areas, including income and expense distribution, revenue and profitability growth, employee production and compensation, and technology expenses.  In doing so, it sets standards for those areas that other agencies can use to determine how they are doing compared to the agencies in the study.  The closer your agency is to meeting those standards, the greater its competitive edge will be.

Like the speaker in the other presentation I attended, Ms. Lukens recommended that the employees of an agency should be involved in determining what could be done to improve the agency’s performance in those areas where it failed to meet the standards set by the Best Practices agencies.  The study offered some surprising information about what those agencies were doing to increase their organic growth rate, which is one of the two main components of agency value (the other being profitability) and according to Ms. Lukens the more important of the two.  In addition to the well-known practice of rounding out accounts by cross selling insurance products to them, the study found that the best practices agencies were using more advertisements and were hiring more new producers.

It was surprising to me to hear that roughly half of all new producers hired by the best practices agencies came from outside the insurance industry and that there was not one particular type of outside experience that stood out.  With respect to the hiring of young producers, the study found that having a regular presence on college campuses and providing internships to prospective employees were very important predictors of a successful hire.  However, having a degree in risk management turned out to be not so important.  One other important factor that makes sense when you think about it was to hire two or more new producers at the same time.  By doing so, a natural competition is created, which can lead to a reduction in training time and costs.

Ms. Lukens mentioned that Regan Consulting would be releasing a Producer Recruiting and Development Study on its website sometime this week that would contain information on the best practices for recruiting and developing producers.   While there, you may want to take a look at the 2013 Best Practices Study, excerpts of which can be found by clicking here.

If you would like a copy of Ms. Lukens presentation, which contained much more information about the results of the 2014 Best Practices Study, please let me know and I will send it to you.

Fall Conference – What You Missed

I attended the first day of IIAG’s Fall Conference in Macon and sat in on two interesting and informative presentations.  However, before I get to them, I want to give you some more information on last week’s blog post about the importance of Millennials to the insurance industry.  In that post, I referred to a panel discussion in a webinar sponsored by Applied Systems.  I recently learned of a report titled “Why Millennials Matter” that was prepared by Applied Systems based on an independent survey and Millennial agent interviews.  That report addresses the consumer side of the Millennials and insurance issue. (Click here for an overview of the report’s findings and a link to download it.)  I also came across another article that offered suggestions on how to recruit and retain Millennials as employees of your agency.

According to Marit Peters, who lead one of the presentations I sat in on at the Fall Conference, one way to get and keep employees of all generations is to provide a workplace that engages them.  To do that, it is necessary for agency owners to practice what is known as servant leadership.  Such leadership focuses on the people of an organization and not its financial and other numbers.  If the employees of an agency think that the management staff actually care about them as people, they are more likely to be willing to do what is asked of them and even more.

Servant leadership begins with an inversion of the traditional pyramid of management hierarchy that puts the agency’s customers at the top followed by those employees who have the most contact with the customers.  In this model, management’s primary duty is to provide those employees with whatever is needed to serve the agency’s customers as they want to be served and to solve any problems and remove any obstacles that may arise.  To do so, there must be two-way communication between management and employees about the nature of the problem or obstacle and how best to solve or remove it.  Above all, management should not “shoot the messenger” in this situation.

Ms. Peters also discussed a process for creating an engaged workforce that starts with a “base camp” of six basic things that should be provided to all employees.     Each employee should know what is expected of them, have what they need to properly perform their duties, have the opportunity to do what they do best every day, regularly receive recognition or praise for doing good work, and feel that someone in management cares about them as a person and encourages them to develop their skills.  Ms. Peters made the point that the level of engagement of employees at work has a direct impact on the bottom line of an agency.  The more engaged employees are, the better customer service they will provide, which will in turn result in more satisfied customers who are more likely to stay as customers and refer others to the agency. (Click here for Ms. Peters’ presentation slides which include a process for problem solving and much more information.)

Next week, I’ll discuss the presentation on Best Practices that I attended.  That presentation provided great information on how to determine if agency and producer performance are what they should be, among other things.

Millennials – Why They Are Important To Your Agency

For starters, the generation commonly called the Millennials (born between 1980 and 2000) is larger than the Baby Boomers, so they will have a larger than normal impact on the insurance marketplace as they create families and start businesses.  Their impact can already be seen in the rapid development and use of social media (the creators of Facebook are Millennials), which has transformed the way that businesses now connect with their customers and potential customers.  The importance of being able to connect with those customers anytime, anyplace, anywhere was discussed in my post last week.

What better way to help your agency develop the systems and procedures necessary to meet the demands of its customers and potential customers than to hire employees who are knowledgeable and comfortable with the technology now used by those customers.  This need of agency owners plays into what is the key to recruiting Millennials as employees according to a panel on a webinar sponsored by Applied Systems this past summer.  The consensus of that panel was that “Millennials don’t want to hear about what your business can do for them—they want to hear about what they can do for your business.”  They want to feel like they have something special to offer and will be making a difference in the way your business is conducted.   They have been in the vanguard of the social media revolution and will be intrigued by the opportunity to make significant changes in the business world.

For agencies looking to recruit Millennials, the Applies System webinar panelists came up with four main motivators for them.  Millennials want to have ties to a community, to make a difference, hands on learning opportunities, and to make use of the latest technology.  In addition to the work environment, providing ties to a community and the opportunity to make a difference can be done by the agency’s involvement in community service and other projects that allow its employees to work collaboratively with others to improve their community.   Hands on learning opportunities can be provided by allowing a new hire to work in various parts of the agency’s business activities.  The agency must be committed to keeping pace with technological advances in the conduct of its business activities to satisfy a Millennial. (Click here for an article that gives examples of how agencies are providing these motivators for Millennials.)

The Millennials will be an important source of both customers and employees for insurance agencies going forward.  Those agencies who are successful in attracting this generation to their products and their industry will be positioned to thrive well into the future.

Any Time, Any Place, Anywhere

The above is the subtitle of the cover story in this month’s National Underwriter magazine.  It refers to what the author of that article says is how consumers now want to buy products and services.  Anyone who has ever used Amazon or another online retailer to buy something can appreciate the ease of such transactions and how that experience leaves a very favorable impression, so that the next time you need something, you think of them first.

The theme of the National Underwriter magazine article is that independent insurance agencies who want to survive and thrive will have to adapt their business practices to make their products and services available to their customers and potential customers any time, any place, and anywhere.  The first step toward doing so is to make an agency’s website mobile friendly, i.e., able to be accessed and used from a smart phone, tablet, or other handheld electronic device.   More than half the visitors to the website of Paradiso Insurance in Connecticut use its mobile optimized site, which generates a large part of its $6 million in annual personal lines premium.

The Agents Council for Technology has published a white paper on ways to make an agency’s website more dynamic and user-friendly.  It contains references to information on how to make the website mobile friendly.  Steve Anderson, who writes a weekly TechTips blog for insurance agencies, recently wrote about a service that allows an agency to insert interactive content on its website that provides useful information about various types of insurance coverages, which content is also mobile friendly. (Click here to read his post.)  He has also recently published a white paper on how to modernize an agency’s payment methods to better fit what today’s consumer wants and expects.  For those who want to add a personal touch to all this technology, he has found online services that will send handwritten notes for you. (Click here to read about them.)

For those of my readers who are going to this week’s IIAG Fall Conference in Macon, there will be a couple of presentations about the use of technology by agencies to enhance their business activities and protect against the dangers associated with such use.  One of those presentations will be by IIAG’s Agents Go Digital staff.  They can create and support websites and provide social media management services for agencies that don’t have the time or expertise to do those things on their own.  I hope to see some of you at the Conference.