Overcoming The New Agent Failure Rate: What It Takes to Succeed

April 20, 2020

Developing young talent to become successful young agents is not easy.

Chris Burand, president of Burand & Associates, an insurance agency consulting firm, estimates that the new producer failure rate is as high as 70% to 80%. Other estimates have pegged failure rates for new agents as high as 50%.

“The industry has an incredible failure rate for new producers,” acknowledges Aaron Brown, risk management specialist at TrueNorth Cos. based in Cedar Rapids, Iowa, an Insurance Journal Top 100 Agency. At 37, Brown is the oldest agent on his specialty construction team. Brown started in the insurance industry at just 17 years old with Nationwide agency. The reason: “It paid better than Subway.”

Starting his insurance career early led Brown to thinking about what makes or breaks a young agent. What tools do they need to be successful? What’s missing to help young producers? And what’s led to his success over the past 20 years in the agency business?

First, he enjoyed selling. “We were dialing for dollars, cold calling after school,” he said. “And it was fun for me. I actually really enjoyed being on the phone.” Brown said the agency owner spent a lot of time coming in and talking to him about coverages and claims examples and why it’s important to take care of people and how it can affect people financially. That relationship led Brown to his first industry mentor — a critical part of succeeding in the agency business, he said.

“The advice I’d give to anybody starting off today is make sure that if you take on a position in a sales role, make sure that you have a direct, one-on-one mentor,” he said. “Everybody’s got their different training programs and things like that, but I think you really have to have a one-on-one mentor that is actively growing their book of business.”

Some 70.3% of respondents reported having a mentor in this year’s Young Agents Survey. Many respondents stated having multiple mentors over the course of their career, offering feedback on everything from emails, phone calls and meetings to education, coverages and even work-life balance.

“Feedback is key and you have to be eager to learn more,” one young agent wrote.

“Have lots of mentors,” one agent wrote. “Learn from everyone around you in this industry. Always be a sponge, soak up the information around you.”

For some, parents have proven to be excellent professional mentors as well as life mentors.

“My mother was an agency owner and we worked together exclusively for five years when I first began my career. She was a recipient of the CIC designation and always displayed ethics and professionalism in business practices. She was also skilled in the art of customer care,” one young agent noted.

“My father, who started an agency from scratch … I’ve learned almost everything I know from him.”

Critical Thinkers

Another key to success — critical thinking skills, Brown says. Brown, who’s built of team of successful young agents specializing in niche construction accounts nationwide, looks for people with drive and the ability to think critically.

“What I mean by the ability to think critically is that as an agent, you’re going to get beat up those first couple of years; it’s going to be emotionally taxing on you. But if you can think past that and think, ‘Where do I go from here?’ This person said no, but ‘how am I going to change what I’m doing today to focus more on that person’s needs?’ Or if they have a problem, ‘how can I critically think around a situation and come up with a solution?'”

Those young agents who can move beyond that “no” and will utilize their agency team to really help them be successful will win, Brown says. “Those people that have that [critical thinking skill] do very well,” he added.

Critical thinkers find the answers, whether it’s finding an answer for a client or finding an answer for themselves, he said.

“What I tell everybody when they start, is that the guy that’s paying $10,000 a year, $100,000 a year or $1 million a year, their personalities and their buying is the same; the differences are very minor.

“So, don’t be scared to call that person who you think might be out of your comfort zone,” Brown said. “If someone would have told me that years ago, I think it would have helped tremendously because it took me four years to write an account where the client’s paying excess of $200,000 in premium. But today we have 23, 24, 25-year-olds writing those on a monthly basis.”

One of those successes is 26-year-old Will Teubel, a risk management specialist at TrueNorth, who landed his first $50,000 telecommunications account. “So during quarantine we ended up binding a $50,000 revenue telecom account,” he said. “It was pretty cool.”

Brown advises other young agents to have confidence in their value proposition and bring solutions that prospects value. While youth can be a challenge, young agents armed with knowledge can win accounts.

“You need to bring more value to trump that (incumbent) relationship,” Brown says. “So how do you do that?” With education and specialization, he adds. “When you talk to someone, they’re going to size you up whether you’re contacting them in-person or you’re over the phone,” Brown said. “So, one of the things that we’ve done to help our agents instill trust is education. The more educated you are on what you’re presenting, the more confident you’ll be.”

Brown’s young age is what led him to his specialty in high hazard, multi-state telecommunication contractors. “Because I wasn’t best friends with all the general contractors, and I wasn’t a member of the country club, I started going after people that weren’t in those groups.”

That led him to a niche. “My value proposition and the way that I understood their [telecommunication contractor] language and their industry led them to trust me more than their relationship with their local agent.”

Competitive Spirit

Michael Stoops, owner and founder of Metropolitan Risk Insurance Brokerage & Risk Management in Irvington, N.Y., wanted to create a better way to develop new agents when he opened the doors to his agency in 2010.

“The biggest issues that I saw with new producers’ training was that most agencies just hire them, give them a business card, give them a little bit of training, and then they’re left to their own devices to figure it out and prospect on their own,” Stoops said. “Some of them do well, and some of them don’t; a lot of them fail.”

Stoops knew from his own experience as a producer that there had to be a better way. “I just saw the industry was doing a really, really poor job with producers,” he said.

Stoops also began as a Nationwide agent years ago but says he “learned pretty quick” that the captive agency model was a “dead model.” He transitioned his business to an independent agency model, where he and his two partners built a successful “generalist” independent agency producing about $50 million a year in sales. But 10 years ago, Stoop decided to make a change.

“I just saw that the value that most agents were providing was already minimal. They were basically processing the transaction of insurance and that was basically all they ever did. But when you get into middle market space, what I found was over the years they all wanted to save money on insurance. But they all went about it the wrong way.”

Stoops invested in building several different risk management platforms or deliverables to help clients and producers provide better service and value. Then he set out to hire new producers.

Most agency owners do not support their young producers, Stoops says, which is why so many fail. “About 75% of new producers fail; in our agency for the last five years, our success rate of new producers is 75%,” he said. That’s because Stoops gives his new recruits what he calls “warm leads.”

He says, by building his own database, or CRM tool, and stocking it with 2,000 warm leads, young agents are able to succeed early and often. “I hire kids from a local college right down the road to come in and research all of these companies for me; help me put them in the database. They capture a lot of different statistics.” That data is then handed over to his producers.

“The system has automatic drip email marketing segmented by industry, segmented by certain business statistics and the program just runs in the background,” he explained. “We spend a lot of time and a lot of money doing video marketing, too. … So, we’re constantly touching and dripping on these potential prospects,” he said. “So, when producers come in to the database to start marketing on a Monday morning, the database already figures out for them who they should be calling.”

That has led to much higher success rates for his agents.

And when it comes to hiring new producers, he mostly hires young agents, he says.

“My personal preference is I don’t like to hire seasoned producers,” he said. “I like to hire green and new to the industry, maybe with a little bit of sales background so they understand how competitive it is. It is hand to hand combat in a lot of ways,” he said. And one trait he looks for in young agents — a background in athletics. “Have they played sports, have they competed in some fashion?” he said. “Do they enjoy athletic competition and are looking to replicate their sports experience in their professional lives?” Athletes tend to be resilient and that’s a key trait for success as an agent, he added. “Because you need to be really resilient in this business and you can’t be sensitive.”

Alex Jelenevsky, an agent at Metropolitan Risk, fits that description. He played baseball in college and jumped into the insurance industry after graduating. “As a college athlete I spent a lot of time putting in the work necessary to see the positive results and it paid off. That was one of the draws to a career in insurance,” he said. “I saw that right out of college I could put in the work to possibly be successful.”

While playing sports can be an advantage, Jelenevsky says it’s not an end-all to finding a successful career as an agent. “The number one thing I would say to other young agents is find a mentor,” he says. “Find someone who can help guide you through the process. … A true mentor is going to really help set you up for success.” Seek them out, he says.

TrueNorth’s Tuebel, agrees.

“Find your mentor, find someone who’s actively selling and work with them so that they can provide you with guidance and advice on how to get it done,” Tuebel said. “Find the right team, the right people, the right company who’s out there trying to grow and partner with them. … I’m where I am today because of the people around me. I can’t emphasize that enough.”

Topics Agencies Training Development Risk Management

Was this article valuable?

Here are more articles you may enjoy.

From This Issue

Insurance Journal Magazine April 20, 2020
April 20, 2020
Insurance Journal Magazine

The Young Agents Issue – with Survey Results; Markets: Directors & Officers Liability; Webinar: Cannabis Coverage Update