Raid on the competition: agencies readily admit they recruit good producers from competitors as the talent pool shrinks.

When insurance companies and agencies go looking for new producers, they rely mostly on referrals and word-of-mouth recommendations, and they find the best places to look for those new recruits are other insurers and agencies, according to a recent Best's Review survey.

"Our best producers mainly come from three origins," said one survey respondent. "They used to be good producers in other insurance companies; they were good sales [people] for another product, but they demonstrate their ability in insurance as well; [or] they had no sales or insurance background, but they are willing to learn new things quickly."

Respondents, 72% of whom are agents, brokers or advisers, also named colleges, wirehouses, banks and their own organizations as fertile recruiting ground.

In addition to referrals, some had success with seminars, networking activities and advertising in national publications that are insurance related. Job fairs, employment agencies and advertising in newspapers don't work, they said.

To keep good sales professionals, respondents advocated "fair, realistic and consistent compensation," "good support team and market availability," "training opportunity" and "providing them with every opportunity to help grow a book of business and later let them take care of a portion of the business and add to it on their own."

Micro-managing was named most often by respondents as a technique that didn't work to retain good producers. One respondent explained the problem as "my-way-or-the-highway strong-arm employment methods and treating the agents without respect [in] considering their opinions pertaining to what is actually happening on the street level."

Changes that insurers and agencies are seeing in agent recruiting include

a shrinking talent pool and more demand for ownership of the book of business. "Today we must recruit individuals who are more sophisticated about financial matters and capable of moving into the adviser role vs. only sales orientation. [It's] much more about process than product," one respondent said.

Highlights of the survey results are shown above and on the preceding page.

How have you recruited your best producers?

"Personal contact with known good producers from other organizations."

--Agency, brokerage or adviser organization

"Referrals and online recruiting."

--Other insurance-related company or organization

"Advertising in national publications that are industry related."

--Other insurance-related company or organization

"Sharing with them how money works and giving them an opportunity to make more by owning their own business."

--Agency, brokerage or adviser organization

How do you retain good sales professionals?

"I do the initial research and field testing on new products prior to introducing them to the agents. Also, I start them out at a reduced commission with the promise, and follow through, of a raise in commission following good work ethics and persistent results. I retain all my agents as independent contractors, which allows them to move out on their own whenever they wish."

--Agency, brokerage or adviser organization

"Give experienced people a lot of decision-making authority and advanced responsibilities and leave them to the job. Give less experienced people a lot of direction and assign a mentor so they never feel over their head."

--Agency, brokerage or adviser organization

"Providing service staff to support them. Provide markets that they can sell. Send them to a school where they can get help on coverage and sales information."

--Agency, brokerage or adviser organization

"Award, bonus, money.... Low fixed salary, resulting in low fixed expenses, and high variable salary, according to performance."

--Insurance company

What's changed about recruiting agents?

"Agents are demanding more from the agency in the way of support and equity in their book."

--Agency, brokerage or adviser organization

"The talent pool is shrinking, and talented producers have restrictive non-compete contracts."

--Agency, brokerage or adviser organization

"I found that you must now recruit outside the insurance field. You must now cross-recruit from medical sales and other fields if you want to develop a successful team."

--Other insurance-related company or organization

"There are fewer and fewer people interested in this profession, as it is getting tougher to make a decent living on commissions alone in a small-town market."

--Agency, brokerage or adviser organization

"It is becoming more and more difficult to find young people with a strong work ethic. Our business requires commitment and sacrifice in the early years and it is difficult to find this in today's generation."

--Agency, brokerage or adviser organization

Where Respondents Work

Agency brokerage or adviser organization          71.9%
Insurance company                                 19.3%
Other insurance-related company or organization   12.3%