As a 34-year veteran of the life insurance industry, I have seen so many changes that what is presented as new today was old 25 years ago. One notion that comes to mind is that the career agency system is dead and the market will be dominated by "independent" distribution channels. Obviously, this has not come to pass but it is a fact that fewer agents are being recruited the old fashioned way. It is also true that many of the now identified "independents" had their beginning, and are still affiliated, with the career agencies and companies.
I began my career as a financed agent in the Memphis Agency of Union Central Life Insurance Company, now a UNIFI company. I was attracted to the financing program, the training program, and the educational career path laid out for me. All of this was supported 100% by Union Central's training department, branch manager and field supervisors. They were all dedicated to growing "green pea" agents and making them successful one day. We sold Union Central's product line up: life insurance, disability income, annuities, group major medical and pensions.
About 15 days into my career a prospect asked for something other than what Union Central had on the product shelf: individual health insurance. That was the day I became acquainted with a brokerage distribution channel in Memphis, Tennessee which was, and is still, known as Agency Services, Inc.
I was a career agent 100% financed by Union Central but was directed by my agency manager to go outside the company to solve the client's problem. I was fortunate enough to find a brokerage firm that had the same philosophy of doing business as we did. The short version: solve the client's problem and everything else will take care of itself. This has worked for me for 34 years and I am pleased to say that I am still aligned with this brokerage distribution channel.
In 2006, there are so many changes going on that I wonder sometimes what business I am in. What has not changed for me is that I am in the same agency in which I started in 34 years ago, only now I am the general agent. The agency today doesn't look much like the one that I started with in 1972 because we have adapted to the demands of the markets we serve.
We have in-house specialists for all the things we do for our clients and we have customer service models with built-in redundancy to provide backup. We still have a live voice that answers the phone (it's a throw back I know) and business casual for me is a sport coat and tie on Friday instead of the regular business suit.
We generate our revenue, and struggle with lower compensation, over many more product lines than in the beginning. This is not new, as margins have been squeezed for years. Our focus, however, has always been on solving the client problem. Despite all the changes and squeezed margins, we continue to prosper.
Today, it seems that more companies are changing their service models to reflect more competitive pricing, or to help the company meet shareholder profitability expectations. The result of this philosophical shift is more responsibility on the agencies and producers to provide customer satisfaction, and less company provided resources with which to do so. The company-sponsored training programs have been scaled back as well, shifting agent training costs to the individual agencies. Heightened customer expectations, coupled with the decreased level of support, is one of the most challenging issues facing our industry today.
