Looking back at the beginning of his career in the late 1960s, Steve Stonehouse recalls when there were no perpetuation issues and insurance was a much simpler industry.
There were young agents aplenty. That was when he insurance companies hired tens or even hundreds of trainees at a time. Some of those trainees sought related work at insurance agencies they had come to know during their training, and thus new blood was infused into the industry.
Things have really changed.
More than 25 percent of independent agency owners and principals are planning to retire or change careers and sell their firms sometime in the next five years, according to a new survey conducted by Channel Harvest Research last year.
And there’s a growing chasm as that knowledge and experience leaves the industry, and leaders and innovators are not being replaced fast enough by youth coming into the industry.
“That pool of people, it’s not being funded by insurance companies,” Stonehouse said. “We’re not attracting as many young people as we should.”
Perpetuation is not a new subject, but Stonehouse, who just stepped down as senior vice president and zone officer of CNA Insurance, one of the largest insurers in the nation, views this as a time of opportunity for someone like himself to help guide younger firms.
As increasing numbers of agency owners and tenured professionals with foundational industry experience continue to seek the comfort of retirement, Stonehouse is swimming upstream, as it were.
He’s seeking to carve out a role for himself.
“I’m an operator,” Stonehouse said. “If someone had a business or agency and wanted me to run a chunk of it, I’d do that.”
Stonehouse is also considering as his next career move offering his services as a consultant.
He certainly has the background for it. Before spending 12 years as senior vice president and zone officer of CNA, in which he managed the property/casualty underwriting and marketing of eight offices in the Western U.S., he had several stints running insurance offices.
Stonehouse spent five years as senior vice president of Reliance Insurance Co., leading the commercial insurance division with offices throughout the U.S., primarily handling middle-market commercial business totaling $600 million in revenue.
Before that for nearly a quarter of a century he was a zone officer with Chubb Insurance. Stonehouse managed the nine offices in the West, which produced roughly $800 million in premium ranging from commercial to high-end personal insurance.
Part of his reason for leaving CNA was that CNA had plans to move from Woodland Hills to San Francisco. Stonehouse has roots in Calabasas, Calif., where he and his family have lived for 12 years.
Additionally, Stonehouse felt he had his fill of accomplishments at CNA during his tenure there. CNA, which was highly centralized when Stonehouse started, with a great deal of underwriting done in Chicago, has moved to becoming decentralized.
“Now most of the underwriting decisions are made in the field,” Stonehouse said.
While there, Stonehouse also helped CNA build out its physical footprint.
When he first came to CNA, there was a California office near San Francisco, in San Bruno, as well as offices in Woodland Hills and Brea. Now they have a consolidated office in San Francisco, as well as offices in the Southern California cities of Brea, Woodlands Hills, and Los Angeles, as well as in San Diego.
Stonehouse also handled the opening of offices in Seattle, Portland, Phoenix and Albuquerque for CNA.
“The business has grown and we’ve expanded the footprint and expanded the product offering,” he said.
For Stonehouse, who was born and raised in Western Pennsylvania, not far from Pittsburgh, insurance was his career of choice right out of college in 1967 – although he quit the industry three months after his first insurance job and spent three years in the U.S. Army, including a year of service during the Vietnam War, reaching the rank of 1st lieutenant.
And over the last 40 years, Stonehouse has seen a lot of changes.
“It used to be fairly simple,” he said of the industry, adding there were a few steady, major companies.
“Now it’s a lot more fragmented,” he said, then added, “but it’s more interesting. Now there’s a lot more interesting coverages. For instance, when I started there was no such thing as directors and officers insurance. Today, we have become more complex in the covereages that are offered, and that is what society demands.”
A demand Stonehouse would like to answer is from younger agents and agencies looking for leadership and those in need of someone with a solid background in insurance like his.
“There are some companies that need some help,” he said. “I think there’s a lot of coaching, or consulting work, for someone like me to do for both agencies and companies.”
Today there are brokerages that have no one employed who worked for an insurance company, which Stonehouse believes creates an opportunity for an insurance executive with a board background who has held many jobs and worked in multiple locations.