What Do Producers Value More–Product or Support?
The task of attracting a steady stream of quality insurance producers to an insurance company can be a daunting one. With the wide array of services and support agents need for a successful sales career, where does a company begin?
Not surprisingly, product remains king. A recent LIMRA study of affiliated and independent insurance producers identified a competitive product line as the most important element when choosing a carrier. Other core elements such as the financial strength of a carrier, competitive compensation as well as timely and consistent underwriting are also considered essential. Carriers which are perceived as having serious flaws in any of these core areas will see their producers place their business with a competitor.
But support and services can be the differentiating factor when a producer is choosing a carrier. The study found that one third of producers felt that training was the most important support component; while one in five identified some aspect of technology. The rest of producers surveyed valued support in the areas of business development, point of sale and operational.
LIMRA found that affiliated agents are much more likely to receive training than independent producers. Also important to note is the frequency with which independent producers are receiving their training from an independent intermediary: a Brokerage General Agent (BGA) or Independent Marketing Organization (IMO), as opposed to the product manufacturer/ insurance carrier (Figure 1).
This has implications for how companies staff their training departments. It is also an important factor as companies continuously recruit for new talent to distribute their products. The adage “you only get one chance to make a good impression” comes to mind here. Companies appointing affiliated agents to do business with them are able to make a favorable impression and get these producers off to a good start with a high quality product and sales training program. Coaching and mentorship programs, while offered much less frequently, can have a significant impact on the long-term success of producers.
Independent agents are far more likely to receive training from an independent intermediary at this stage of their career, although we know that the majority of them got their start in the business as a career agent. Still, the natural question for companies marketing in the independent distribution channel remains open: are the BGAs and IMOs they are contracted with doing an adequate job meeting producers’ needs in this important area? In the three areas of training LIMRA evaluated, affiliated producers are happier with the quality of the training they receive. Sixty-seven percent of affiliated agents think that their primary carrier’s product training is very good or excellent; this rating drops to 54 percent for independent producers.
Companies who rely on BGAs and IMOs to provide training pass up the opportunity to manage their company’s message in the process. While there are undoubtedly cost savings realized with this strategy, there are hidden costs associated with offloading this important function to an outside organization that should be considered. Less than 60 percent of independent producers think that the product training they are receiving from a BGA or IMO is very good or excellent; in the area of sales training, the percentage drops to about half.
Why should companies be concerned about this? Enter the importance of relationships. Once the hurdle of satisfying producer needs in the areas of product, strong financial ratings, competitive compensation, and underwriting have been overcome, companies need to work hard to distinguish themselves from the competition.
The quality of their training program is a good place to begin. While difficult to quantify, the importance of relationships that form between producers and the staff at the companies they represent cannot be overlooked. The training producers receive both when they are first contracted and on an ongoing basis can go a long way toward determining whether they become firmly entrenched in the company’s culture or if they try their luck with a competitor.
By Denise C. Marvel, CLU, CHFC for InsuranceNewsNet Magazine. Denise is assistant research director, LIMRA Distribution Research, is responsible for research related to wholesalers and independent marketing organizations and other independent distribution intermediaries.