What is the best part about working in insurance? For a group of millennials speaking with Insurance Journal at a July roundtable, the answer was simple.
“The people,” roundtable participants agreed.
On the other hand, when asked about one challenge they’ve encountered so far in the insurance industry, roundtable participants gave a similar answer.
“The people,” they joked.
Insurance operations and service company ReSource Pro held the roundtable at its offices in Manhattan, where a group of six millennial-generation insurance industry employees selected by ReSource Pro met to discuss opportunities they’ve encountered in their careers and how they hope to see the insurance industry evolve in the future. The participants were chosen by firms that work with ReSource Pro.
Joking aside, panelists agreed that one key to the insurance industry being able to tackle the challenges it faces regarding age gaps and succession issues is in its roots as a people-focused industry.
“I think a lot of people overlook the fact that the insurance industry is built on relationships and that’s what makes it so much fun,” said Patrick Costello, a principal at Evolve MGA, a San Francisco, Calif.-based cyber insurance specialist.
The problem with getting a younger generation through the door as an older generation retires, however, is that insurance is “kind of a well-kept secret,” said Pierce Leonard, Senior Advisor of CoverStartups at CoverWallet, a New York, N.Y.-based online business insurance management platform.
“I didn’t really know what I was getting myself into, to be honest, but I started as a risk analyst for Aon and then started working on complex accounts, supporting senior management, and was able to get a 30,000-foot view of the insurance industry—just how big it is and how much it really isn’t that talked about,” he said. “It’s just not something that is run-of-the-mill conversation, but it is a very exciting industry.”
Indeed, other roundtable participants recalled similar experiences in finding insurance as an unlikely career path.
“Going through college, my whole life, I wanted to be in criminal justice,” said Patty Manke, CFO at Smith Brothers, a Glastonbury, Conn.-based independent insurance firm. “Then, I decided my freshman year that maybe I want to do business. Finance was one of my majors, and I figured insurance would be beneficial because even if it did fall through, I would know it for myself. I ended up really loving insurance. That probably sounds kind of strange to say that you love insurance, but it just hit the right button for me.”
Costello found he loved insurance as well after entering the industry because it was his family’s business.
“My great-grandfather was an insurance broker, his son was an insurance broker, and his son was an insurance broker,” he said. “My dad was a huge role model for me. He ran his agency for 30 years, and it was very easy to see how much fun he was having.”
Pat Hastings, an operations consultant at ReSource Pro, added that after beginning his career in the industry, he was drawn to learn more about it.
“I realized insurance is everywhere, and there’s so much involved with insurance, and yet it was something I had zero idea about,” he said.
Behind the Curtain
Indeed, panelists agreed that although the unknown aspect of insurance can make it exciting to learn about, it is also one of the main issues leading to a critical age gap and trouble with succession planning.
On the other end of the age spectrum, more workers continue to work past traditional retirement age, Insurance Journal reported earlier this year. And, according to U.S. census data, 19 percent of Americans age 65 and older are still working today—the highest rate since 1962.
Manke said she’s seen succession issues becoming most prevalent in smaller mom-and-pop agencies.
“They’re getting to the point where they want to retire but they can’t because they feel like they have to stay in it for their clients and their employees who have been there probably 20-30 years as well,” she said.
With this in mind, Manke said younger generations need to better understand how insurance works so the industry can continue to plan for the retirement of older workers and also grow its workforce.
“I think that’s where the misstep might be: People just don’t know what they don’t know,” Manke said. “They don’t peek behind the curtain.”
Manke and others said they believe the insurance industry needs to start by marketing itself better at the college level to draw younger employees toward the idea of pursuing an insurance career.
“I just think it’s one of those things that when you’re going for a business major, you always lean toward accounting or marketing,” she said. “You don’t really think about insurance, and I don’t know why that is.”
Jamie Manners, an account manager at Hardenbergh Insurance Group —a Marlton, N.J.-based, family owned and operated insurance company—agreed, adding that she’s observed many larger universities may not even have a specific major for insurance.
“If [the industry] can get out in front of young people at job fairs and things like that, it could explain that there’s a whole world out there if you pull that curtain back,” she said. “There are so many opportunities. [Students] just don’t know about them, I think, on the college level.”
Because of a lack of understanding, she stated many college students may not even see the need for insurance yet.
“I remember being a freshman in college, and the only thing I knew about insurance was I have to have my auto insurance bill paid,” she said. “That’s not fun. As a young person, you don’t appreciate what it’s there for—at least not yet.”
Additionally, Melissa Morle-Jovellanos, a client executive at Harrison, N.Y.-based independent insurance broker York International Agency, said she’s observed misconceptions among young people who don’t consider the many roles available within the insurance industry.
“I think people think ‘insurance’ and they automatically think of the agent instead of the brokers and the carriers,” she said. “I don’t think there’s enough knowledge about what we do. The perception is more on a retail-focused position.”
Costello said that with these challenges in mind, he believes the insurance industry has an opportunity to do more around catering toward millennials and marketing itself to younger talent as older talent retires.
“If you’re at a dinner party and you say you’re in the insurance industry, the reaction you get will be very mixed,” he said. “I think people don’t necessarily understand how it works.”
Hastings added that in visiting various insurance organizations, whether it’s agencies or carriers, he’s seen that many are implementing a large variety of attempts to engage younger employees.
“I think some people do it better than others,” he said. “I think that as far as leadership in companies goes, sometimes if you try to fake it, it doesn’t look very genuine and it’s not engaging. Then, in other companies where it is a part of the culture, you can tell. People really buy into it, and that’s part of the reason they stay.”
He explained that genuine engagement goes hand-in-hand with teamwork.
“I think the teamwork aspect of it is something that should be promoted more in the discussions when you’re telling people early on about insurance,” he said. “There’s a huge teamwork aspect of it that I think younger people would appreciate.”
In addition, Manners said there needs to be more support for young people going into their first jobs, whether it is at an agency or a company.
(Related: Hardenbergh Insurance Group’s Manners Talks Technology and the Evolving Insurance Industry)
“In my experience of my first two to three years in this industry, there wasn’t a designated person that was a trainer,” she said. “You were kind of thrown in with a more senior person that was obviously very busy. They didn’t have a lot of time to train you, and that can get discouraging. I could see where some people would leave the industry because they didn’t get the proper training initially. At least on the agency level, I just think there should be more of an administrative position that handles supporting a new hire through year one. I think that would go a long way.”
Hastings said that messaging is also important when it comes to bringing younger generations into insurance.
“I was in an agency two weeks ago, and they said, ‘Our average tenure is 22 years,'” he said. “Well, that scares some millennials, but for others, it’s like, ‘Stability. That’s great.’ So, it’s the message that you’re sending too. Maybe they’re looking at 22 years as a great thing, but that could be scaring everybody under 25 away from them. Messaging is big.”
Overall, “open-minded progressiveness” is what’s needed when it comes to trying to attract younger talent to the industry, Costello said, and panelists agreed.
“Having your management team be open to change is important—asking your employees their opinions about what’s going on, what kinds of things they want to see change in the next year, and genuinely listening to them and taking action on it,” Manners said.
Keeping Up With Technology
Much of this change, panelists said, will need to start with technology.
“I think your agency has to be adaptive,” Morle-Jovellanos said, stating that recently, York International Agency began using a program in which all of its applications are on an online-based system.
“It’s just an easier way for us to communicate, because even our clientele is getting younger,” she said. “A lot of our clients are millennials. They don’t want to receive paper applications, so it’s all about adapting.”
Manke added that along with this, the products the industry has to offer will need to change.
(Related: ReSource Pro’s Hastings Discusses How He Hopes to Impact a Relationship-Driven Insurance Industry)
“Cyber is such a huge topic of conversation now,” she said. “I think as our agencies have to adjust, change, automate and capitalize our efficiencies, we also have to make sure we stay up to speed on the insurance products that will then help protect us through technological advancements.”
Costello said even with advances in technology and adaptations that will need to be made as younger workers enter the industry, at the end of the day, insurance comes back to the people.
“I think a huge key is marrying technology with the people that are within the insurance distribution system,” he said. “Like we said before, insurance is a relationship business. Explaining a complex commercial product to a broker, I don’t think, is something that technology has the capability to do. We can’t take the brokers, the underwriters, the account managers and the producers necessarily out of the system, but I think making everything more efficient and streamlined is the key.”
Leonard said that as some of these changes are implemented and the industry continues to evolve, he hopes in the future, insurance will become a more run-of-the-mill discussion.
“We know insurance is there as a backstop for companies, but as the world changes and new technology emerges, you need insurance to be able to walk hand-in-hand with these new innovations,” he said. “Hopefully, newer technology that comes along will allow for more real-time assessments of data, risk analysis and encourage these innovations so people can create new things, and hopefully insurance will be part of that discussion. These are forward-thinking thoughts, but it’s what I hope we’ll accomplish in insurance because, frankly, people don’t talk about it enough.”