Producer Profile: Selecting Producer Candidates with the Right Stuff

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By Jim Cuprisin, MBA, CIC, CRM, ARP

What is the right stuff? Who should independent insurance agencies hire to become new producers? To answer these questions, and many others, The National Alliance Research Academy surveyed insurance agency producers for the 5th edition of the Producer Profile study. This article contains some of the survey results regarding producer attributes.


Sources for Hiring Producers

How did insurance producers find their current job (or how did agencies find their producers)? Survey results show that there were several ways.

How Producers Found their Job
% CL Producers
Friend (Word of Mouth)
36%
Family Influence
21%
Agency Employee Referral
19%
Employment Agency
5%
Newspaper Advertisement
3%
Internet Job Site
2%
Agency Website
1%
Other
23%

Other included: I contacted the agency; worked for carrier and worked with agency; worked at neighboring agency; I was customer of the agency.

Most producers (76%) knew someone who worked in the agency or had a friend or relative in the agency business. The producer candidate considered a particular agency after talking to someone who was familiar with the agency. Knowing someone on the inside can certainly help a producer get their foot in the door, at least for that first interview. After that, the producer still has to make a great impression.

Nearly a quarter of the producers were influenced by a family member; many of these producer candidates had a parent or other relative as the agency owner. The opportunity to follow in their parent’s footsteps was often there if they wanted it.

Since most producer candidates knew someone in the agency or knew someone else who knew someone in the agency, a limited number of producers were hired without any referral or family influence. Therefore, the survey indicates that most agencies are hiring producers who have some connection to the agency; producer candidates with no connection are not getting hired as often. However, agency owners should keep an open mind and consider candidates who are “complete strangers.” With the difficulty of finding capable new producers, agency owners and sales managers need to consider a variety of strong candidates, whether they are salespersons in other industries or recent college graduates.


Education Level

What sort of education does a producer need to do well in the industry? Survey results help to answer this question.

Education Level
% CL Producers
Advanced Degree
5%
Bachelor’s Degree
67%
Associate’s Degree
11%
High School or GED
17%

Well over two-thirds of producers have college degrees; 5%, in fact, have an advanced degree, such as a Master’s or Doctorate. Conversely, about 17% of producers have no college experience. People with college degrees seem to be preferred, but for many agencies, college degrees are not an absolute requirement for the job. Producers need to be intelligent and hard-working; they can, however, learn on the job and take continuing education courses, like those offered by the CIC Program, to increase their insurance knowledge. Just as important, they can attend sales-oriented classes, like Dynamics of Selling or the Producer School, to get the training on sales skills and techniques that they need.


College Major

If a college degree is deemed to be important, what types of degrees do producers most often have? Survey results show the most common majors for insurance producers.

College Major (Undergraduate)
% CL Producers
Business Administration/Management
33%
Finance
11%
Political Science
7%
Economics
6%
Communications
6%
History
5%
Accounting
4%
Psychology
4%
Insurance/Risk Management
2%
Education
2%
Engineering
2%
English
2%

Business Administration/Management is the most popular major among producers who have a college degree. This degree provides practical business information that producers can apply on the job. Other related majors include finance, economics, and accounting; these three majors account for another 21% of the majors. All told, 54% of the degreed insurance producers have a degree in one of the business majors. Oddly, only 2% of the degreed producers have a degree in insurance/risk management. The insurance industry needs to do a better job of letting young people know, while still in high school, that insurance and risk management degrees are attainable. The National Alliance has developed the UACIC (University Associate CIC) and UACRM (University Associate CRM) programs to help insurance and risk management college students get a head-start in their respective industry.


Sales Experience

Some producers had sales experience in another industry before becoming insurance salespeople; other producers had no sales experience whatsoever. Survey results show the detailed numbers.

Sales Experience in Other Industry
% CL Producers
None
43%
General Retail
22%
Banking or Financial Services
11%
Computer or Other Technology
5%
Auto
4%
Real Estate
4%
Other
23%

Other industries included: construction, medical, and oil.

Nearly half of the current producers had no sales experience of any kind before becoming insurance producers. Apparently, the agency owners and managers who did the hiring felt those individuals had the qualities, personality, and motivation to become successful producers.

Of the producers who did have outside sales experience, general retail and banking/financial services were the two areas where producer candidates most often had sales experience. With only about half of the producers having had prior sales experience, many agencies were willing to take a chance and train someone who had no previous sales experience. The two-week National Alliance Producer School and the three-day Dynamics of Selling Program are excellent education choices for moving new producers up the learning curve at a faster pace.


Reason for Choosing Insurance Sales

People choose to become insurance producers for a variety of reasons, as the survey results demonstrate:

Reason for Working as an Insurance Producer
% CL Producers
Higher Income Potential
63%
Good Match for my Skills
39%
Referral or Recommendation
25%
Family Influence
24%
Challenging Work
24%
Chance—Just Looking for a Job
16%
Other
8%

The majority of those who became producers chose insurance sales because of the income potential. A significant number also felt that insurance sales was a good match for their skills. Other reasons were cited, as well. For the people who do make a long-term career of insurance sales, most are not disappointed with the money that they earn—at least one can assume so based on their average earnings. (Obtain the full study of the Producer Profile for compensation averages and distributions.)


Why Producers Stay—Most Rewarding

While the job can be quite challenging, being a producer also has many rewarding aspects, as the survey results demonstrate:

Most Rewarding Aspects of Being a Producer
% CL Producers
Helping People with Insurance Needs
72%
People Contact
69%
Earning a High Income
57%
Change and Constant Learning
51%
Professional Development
49%
Diverse Tasks and Duties
38%
Achieving Sales Goals
36%
Organizational Skills and Detail Work
13%
Other
4%

While the greatest number of producers originally chose insurance sales because of the income potential, that is only one of the rewarding aspects of being a producer. What is most rewarding is helping people and having continuous contact with people; around 70% of producers identified these “people” aspects as being the most rewarding. Earning a high income was still very rewarding for half of the producers. Other producers cited professional development and learning as being rewarding for them.


Why Producers Leave an Agency

Career producers may, in general, like their job, but they can develop reasons for leaving one agency and moving to another. Survey results show why they may switch agencies

Reason for Leaving Previous Producer Job
% CL Producers
Poorly Managed Agency
36%
Inadequate Dollar Compensation
24%
Inadequate Support Staff
20%
Personality Conflict
17%
Unfavorable Location
10%
Inadequate Benefits
5%
Long Work Hours
3%
Low Personal Production
3%
Other
43%

Other reasons included: agency was sold or merged with another; I relocated.

There does not appear to be one major reason why producers feel a need to switch to another agency. That being said, the highest number switched because they felt their agency was poorly managed. Without asking additional questions, we are left to ponder why they felt this way. Most likely, they may have moved to another agency looking for better support, better markets, and/or better organized sales and service functions.

Compensation was another factor for leaving. Their commission rates could have been too low and/or their benefits package may have been less than adequate. Personality conflicts and inadequate support staff were two other reasons for leaving.


In Summary

Agency owners often look for referrals when seeking candidates for new producers. However, potential candidates who do not personally know anyone connected to the agency may still demonstrate good sales potential.

The majority of producers have a college degree, and the majority of those degrees are in business-related fields. However, there are also many successful producers without a college degree, so while degrees may be preferred, they should not be absolutely necessary if the producer candidate has all of the other qualities needed for success. Like a college degree, sales experience is not absolutely necessary; about half of the producers in the survey had no sales experience before becoming insurance producers.

Many people originally chose insurance sales for the high income potential, but many more stay because they like working with people and helping clients find insurance solutions. When producers do decide to switch agencies, it is often because they feel the agency is not well run and/or their compensation is less than adequate.

Hiring producers is one of the most challenging activities an agency can perform; if done incorrectly, it can prove costly to the agency. Agency owners need to equip themselves with as much information as possible for this important hiring process. The National Alliance Research Academy helps to guide agency owners, managers, and producers by providing informative studies, such as Producer Profile, Growth and Performance Standards (GPS), and Dynamics of Selling CDs.


Learn More, Earn More

Producer Profile

The newest edition of Producer Profile is available now from The National Alliance Research Academy. Producers who attend Dynamics of Selling will benefit from proven sales tips and suggestions delivered by expert faculty. New producers should consider the two-week National Alliance Producer School. The Dynamics of Sales Management program is designed for the agency owners and sales managers who help train and manage agency producers.


Jim Cuprisin, MBA, CIC, CRM, ARP, is the Research Director for The National Alliance Research Academy and the Editor-in-Chief of Resources magazine. He has over 30 years experience in the insurance industry, which included working as an underwriter for two companies. Jim has earned his MBA and been with The National Alliance for over 25 years.

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