South Central Insurance Employment: Oil, Economy Fuel Texas Hiring

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Across the nation, employment levels in insurance agencies and brokerages declined at a faster rate than the overall U.S. employment level since the recession began in 2007. The good news: Some independent agencies across Texas say hiring in agencies is on the rise in 2012.

As of December 2011, employment at insurance agencies and brokerages nationwide fell by 33,000 or 4.9 percent since the recession began in December 2007 compared to an overall U.S. employment decline of 4.1 percent during the same time period, according to the U.S. Bureau of Labor Statistics.

Toni Washington of the Independent Insurance Agents of Dallas’ Staffing Services says that trend is changing throughout Texas and the South Central states.

“Agencies began staffing last year and the hiring trend really increased from March to September 2011,” Washington told Insurance Journal. “For the first time in a long time hiring continued through the fourth quarter of 2011 and 2012 has seen a steady stream of open positions.”

Washington sees commercial lines and personal lines account manager positions in high demand as well as new producers, accounting and policy processors.

“The temp-to-hire model is very, very popular right now as well,” Washington says.

Mike Schneider, president of Cravens Warren Insurance in Houston, agrees. He says demand for account managers in both commercial and personal lines has increased in agencies, including his own.

“In the past several months, we’ve hired two in commercial account manager assistant roles,” Schneider says, adding the agency is actively looking for a third, and possibly a fourth hire in similar positions.

“We are also looking for a commercial sales person, and possibly a personal lines sales person if we can find the right person,” he added.

In Texas, a change in how certificates of insurance are administered has heightened the workload for commercial staff, one reason for the rise in hiring, Schneider says.

“Texas recently changed the way certificates of insurance have to be handled and we found it to be quite a bit of additional work, which put a little bit of pressure on the staff in most agencies, including ours.” The change is not the only reasons agencies are adding commercial lines account manager positions, but it is a contributing factor that’s creating some demand across Texas, he says.

Cravens Warren has about 30 employees and writes about $35 million in premium, with $4 million in revenues, mostly in commercial business.

Schneider says that despite the tough economy business has been good for his agency.

“We had a good year last year in terms of new business sales,” he says. “We feel fortunate to be in Houston, and in Texas, because the economy on a relative basis is still strong.”

Most agencies are perpetually looking for good producers, but Schneider says the outlook for growth in Texas is good and that means the search for producer candidates is heating up.

“We are pretty bullish on the future,” he says. “We feel like the economy is going to be stable enough in Texas for us to continue to try and grow.”

Big city agencies are not the only hiring game in town. Smaller cities have pumped up agency hiring too.

Michael Bosworth, owner and president of Bosworth & Associates in Tyler, needed to hire for two open positions in account manager roles in his East Texas agency in the last few months.

West Texas agencies are hiring as well, says Brenda Smith, president and owner of Mims & Smith Insurance Agency in Midland, Texas.

Midland, where the economy relies heavy on the oil and gas industry, has experienced a surge in growth recently and that means agencies are hiring. “When the oil business is booming, the town is booming and all businesses receive the benefit of that economy,” Smith says.

Networking for Candidates

Referrals can be a lifeline for independent agencies when it comes to writing new business. Referrals for new hires can be just as important.

A couple of months ago, an extremely seasoned commercial lines account manager gave notice that she would be leaving Bosworth & Associates. The agency, which has revenues of slightly less than $3 million, and employs a staff of about 22 employees, has almost no turnover so finding a replacement to fill the position would be critical.

This account manager handled an extremely large book of business, Bosworth says. “We didn’t have anyone at that point trained that we felt comfortable to move into that desk internally.”

With months to find the perfect candidate, Bosworth felt confident his search would uncover a qualified commercial lines account manager in Tyler, a small city with about 100,000 residents.

That search ended up in a dead-end.

“We went to all of the major online job search markets. We also went to the local newspaper. We couldn’t attract anybody,” he says. “We probably had fives responses in four weeks, and of the five we were not willing to interview anyone based on their resumes and qualifications.”

Bosworth decided to do something that had never been done in the agency’s 70-plus year history in hiring — he listed the name of the agency in the job advertisement.

“We had never put our name in the ad itself; we always tried to keep it confidential,” he says. “We had 0 responses (to the ad). What a slap in the face!”

For Bosworth, a lucky networking encounter led to a perfect match.

While attending the Independent Insurance Agents of Texas’ annual Joe Vincent Seminar in Austin in February, Bosworth began chatting with a few marketing folks from Dallas-based insurance firms.

“They were talking about someone, an account manager, that wanted to move to east Texas, and asked if I knew of anything,” Bosworth says. The person in question ended up being a perfect fit.

“We interviewed her that day and hired her. She had 20-plus years’ experience and fit exactly what we wanted,” he says.

Smith agrees the best job candidates often come from referrals. She says an affiliation with agency peers helped her firm find a new employee recently.

Mims & Smith and Bosworth & Associates are part of the agency network Combined Agents of America (CAA).

“Being a part of Combined Agents of America has been a huge advantage because we have agencies located all over Texas and in Oklahoma and Kansas,” Smith says.

CAA helped Smith with a recent customer service position.

“We’ve had the pleasure of hiring a great CSR when she moved here from another town where she worked for one of our partners,” Smith says.

Lack of Talent

Finding a job candidate to fill a commercial lines account manager position was challenging, and the search underscored an industry-wide hiring problem — the lack of qualified people in insurance, Bosworth says.

“Even with unemployment at 8.9 percent, our industry is such a narrow, technical industry that it’s hard unless you bring folks in from the very beginning and start the process from the bottom of the ladder and train them all the way up,” he says. “But to put somebody in the middle of the agency is pretty difficult.”

Bosworth says the lack of experienced job candidates in the hiring pool — particularly account managers and producers — is a problem most of his peer agencies have encountered as well.

“In order to get growth you have to find qualified staff; and finding qualified staff is definitely one of the hardest things to do,” he says. “Sometimes it’s a lot easier to grow the agency than it is to grow the staff. That’s crazy.”

The large amount of retiring baby boomers in insurance is not helping either, agents say.

“As the boomers age out, we are constantly looking for that just-right young person to fill the roles in the independent agent and become the future leaders, managers and owners,” Smith says. “Perpetuation is important to all agents, and the best option is to mentor someone within your own organization to take that role when you’re ready to sail into the sunset.”

The aging-out of baby boomers in the workforce is a problem for most insurance organizations, says Washington.

“This is a real concern and agents are looking for entry level candidates to hire and train,” Washington says. Washington says senior level employees, and even retired insurance professionals, are training the next generation of agency staff. “We are also seeing candidates extending retirement and coming back and working part-time hours.”

But training a newcomer can take years as the learning-curve for insurance expertise, and the costs, are steep, agents say. Finding the right candidate is a must.

“It’s costly for agencies to hire a producer, train them in insurance and see them lose interest or be unsuccessful in a few years,” Smith says.

CSRs and account managers, a vital component to the independent agency system, are no different. “It takes a good five years to develop a strong CSR, so finding a career-minded person is the key,” Smith says.

Getting referrals from respected peers is always best, but not always easy.

Anytime an agency can network and find a referral from another agency that it respects is best, Bosworth adds. “You will feel better about your employee because they come highly recommended from someone that you trust — that has a huge impact on the hiring process.”

Employment prospects vary greatly by employer, region and job specialty. For a closer look, Insurance Journal editors interviewed property/casualty industry leaders in their respective regions and will be filing the following reports this week: