Written by: James Caragher, CPCU, CIC
The most frequently asked question I get: WHERE do I find new producers? This is a matrix of WHERE your new insurance producer candidates are today. Every person in the work force today fits into one of these 4 quadrants:
The left side is the insurance industry – producers on the top left and everybody else who works in the insurance business – the non-producers – on the lower left.
The right side is the rest of the world. Everybody who works outside the insurance business. Outside of the insurance business, you’ve got sales people – the top right box – and you’ve got non-sales people – the lower right box.
Looking at it another way, the top of the matrix are sales people; the bottom of the matrix are non-sales people.
Let me point out that the quadrants are sized the same on the chart but, of course, that’s inaccurate. If we sized the quadrants to scale – based on the number of available producer candidates in each quadrant – the top left quadrant of insurance producers is the smallest of the four and the bottom right quadrant for non-insurance, non-sales people is the largest of the four. The left side of the matrix – insurance people – is much smaller than the right side – non-insurance people. Finally, the top of the matrix – sales people – is much smaller than the bottom – non-sales folks.
To summarize WHERE to find a new producer, I’ve color-coded (green, yellow, or red) based on the risk factors for hiring candidates from these sources.
Non-sales people – in insurance today or not – are red zone hires because they pose above-average new producer failure risk. These people (most of the working population!) pose a high “sum of new”, in other words, if you combine the risk factors of someone new to sales plus new to the insurance business, plus new to your firm, that’s a high “sum of new”. You need to build in a higher expectation of failure. You’ve stacked the odds against new producer success. Even non-sales people in the insurance business already (for example, underwriters, claim adjusters, and customer service reps) are often insurance technicians that cannot sell.
Current insurance producers – “recycles” – are yellow zone hires with moderate risk level – it depends a lot on the economics of the individual you find. The temptation is that they are already in the profession, have technical knowledge (though that is NOT a key success criteria for producer recruiting), and may bring over an instant book of business. Just beware of the over-sized expense of hiring another agent’s producer who has to wait out a contract covenant period to bring over their clients (really, how many will actually move?). And if you’re their 3rd or 4th agency, you need to wonder why they are going to be successful and stick with you for the long-term. Finally, recycled producers are a very small and aging talent pool.
Non-insurance sales people are green zone hires – low-to-moderate, manageable risk and a large talent pool to pick and choose from. Our recruiting experience – and the much larger potential candidate pool compared to producers already in the insurance industry – suggests that agents need to go outside the insurance industry to successfully recruit new sales talent from other industries.
The ideal new insurance producer candidate is a successful business-to-business (B2B) sales person from outside the insurance industry with ~2 to 8 years of sales experience. The best predictor of future sales success is past sales success. It doesn’t really matter what product or service they sell, though it helps if it’s consultative and a long sales cycle. What matters most is that they love to sell for a living, they are great at it, and they know how to self-generate leads and to prospect. It’s a bonus if they bring a natural network and prospect pipeline because it helps to get off to a fast start.
These new producer candidates pose a highly manageable risk – with huge upside potential. And, if you think about it, doesn’t it make sense? The insurance producer role is at its core a sales role. Go find a great sales person who loves to sell and maybe even knows people in your market, and then support their gap in insurance technical knowledge with the people in your agency.