By Michael K. McCracken, CPCU, ASLI
I began my insurance career in 1977. I was hired as a personal lines underwriter trainee at the Huntington, West Virginia branch office of Buckeye-Union Insurance Company (one of the Continental Companies). I was joined by four other underwriter trainees at that time – another in personal lines, one in bonds, and two in commercial lines. The HR Director told us that the insurer wanted to fill its personnel needs, and that it had decided to go after bright, talented young people, instead of passively waiting for job applicants. She told us that her superiors were concerned about the “brain drain” at Buckeye-Union (and in the insurance industry in general) and that the company wanted to be pro-active in addressing the problem.
As the old saying goes, “What goes around comes around.” It seems that every couple of years, I read another article or two about the “brain drain” in the insurance industry and what can be done about it. Unfortunately, it seems that all I ever read is moaning and groaning; all I ever see is a lot of hand-wringing and finger-pointing. Rarely do I see any concrete, positive suggestions.
It seems that the problems range from the retirement of “baby boomers” to the “burn out” (and subsequent retirement) of underwriters, adjusters, and agents. It also stems from an over emphasis on sales and the cancelling or reduction of company training programs.
I’d like to make a couple of suggestions of my own and then share something that I read. In facing the “retirement problem,” I’d like to suggest this: top management should identify those in this group (age 57 to 62), who are doing good work. The insurers should then give these folks incentives – and I mean big incentives – to stick around a while longer. Create positions like “Master Adjuster” or “Master Underwriter.” Give them authority and compensation and ask them to actively mentor younger employees in the company.
Another event that seems to track the cyclical insurance profitability cycle is the staffing-up and then cutting-back of insurance company training departments. Trainers are the first to go when times get tough, but also the first to return when times get good. I believe that companies that have terminated or curtailed their training programs should reinstate them – yesterday! If a company – any company, be it an insurer, or grocery store, or car dealership – hires good people and trains them well, the benefits will be enormous in the years to come. There’s an old saying that applies to insurance data: “garbage in, garbage out.” In the employment world, a similar maxim might apply. “Poorly trained people in, poor results out.”
In a past issue of the National Underwriter, CNA took out an ad entitled “Building the Next Generation of Insurance Talent.” It talked about the lack of talented individuals for the “next generation” in the insurance industry. In that ad, CNA encouraged the insurance industry to do the following five things.
1. Support internships
2. Develop trainee and mentoring programs
3. Bench strength development by providing ongoing training to current employees
4. Improved producer and adjuster training
5. Encourage designation program participation
What do you think? Do you think CNA was right? What else can be done to stem the exit of talent from the insurance industry?