Every independent insurance agency wants to find and keep good talent, but how exactly do you do that?
Paul Saich, CEO of Thoits Insurance in San Jose, Calif., has a plan. His company developed a formalized program about 14 years ago to train and develop recent college graduates’ skills. And the program has become such a positive experience for both the mentors and mentees, that it now is an important part of the company’s succession plan.
Thoits Insurance, located in the heart of California’s Silicon Valley, thinks of itself as a “run of the mill,” regional insurance broker. The company has about $125 million in annualized premium, mainly in the commercial sector. Seventy-five percent of its business is commercial; 15 percent is in employee benefits, the remaining 10 percent is personal lines business. Yet what distinguishes the company is that its approximately 70 employees have full ownership in the company through and employee stock ownership plan (ESOP).
Perhaps because employees have a personal stake in seeing their company succeed, they take a vested interest when new employees come onboard. As a result, the company has developed a three- to three-and-a-half-year mentorship program to train recent college graduates to become successful producers.
The first year, the “newbie” learns about the agency, working in personal lines, accounting, benefits and commercial lines to learn how the agency works and what people do within the agency. After the first six to 12 months, the newbie is paired with a more seasoned producer. Formalized sales training with this producer lasts two to three years, during which time the newbie and seasoned producer are “joined at the hip.” The newbie learns to prospect calls and write business together with his or her mentor. And when the mentor and mentee have produced about $250,000 in commission, which is handed over to the newbie, who then can go out on his own to start his or her own book of business.
Throughout the mentoring program, newbies also attend classes and have book study to learn the policy forms and work their way up to a Chartered Property and Casualty Underwriter (CPCU) designation.
Given that the mentorship program last about three years, the rapport between the mentor and mentee are essential, said Paul Saich, CEO. “I will not hire a newbie unless I have a good fit for them with a mentor,” he said. “These guys have to live with each other for at least a three-year period, and if they don’t live with each other, it fails. So they’ve got to get along.
“We’ve had a situation where it wasn’t a good chemistry,” Saich continued. “The mentor wasn’t doing his job, and I ended it and assigned the newbie to somebody else.”
Saich relies on the newbie mentorship program to work — in fact shelling out about $100,000 per year for each newbie, with four to five newbies being trained at a time — as part of his succession plan.
“We stopped the program for a couple of years, and realized we have to keep going because we’ve got to have capable producers to transition the business to,” he said. “As people retire or grow their book of business, they need to have other producers to step in to help them with that book of business. I think that’s why you see a lot of brokers fail to day, or have to sell today, because they don’t have that transition plan.”
The investment in mentees pays off, Saich said, because when the mentorship program succeeds, the company reaps dividends. “When the chemistry hits right, you do the [training] correctly, and you have an aggressive, motivated mentor mentoring a newbie, and if they’re able to utilize a newbie correctly, there’s a huge windfall of business that can take place,” he said. “One of our newbies is a very established producer today, and we were able to write anywhere from four to five hundred thousand dollars of commission each year that myself and him were paired up. That was because he was pushing me because he wanted to get to the point where he was a producer, and it’s kind of infectious.”
For more on developing a successful mentorship program for producers, visit:
Producer Development: Combined Agents of America Keeps It In-House, or, listen to a conversation with CAA members at https://www.insurancejournal.tv/videos/3826/. And read more about establishing a successful mentorship program at “Chemistry Crucial When Mentoring an Agent.”
Topics Training Development
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