A Touch of Grey
With 25% of working-age Americans
retired in two years, now is the time to begin training younger
Wholesalers have long been the silver lining for retail
agents with difficult-to-place risks, but “every silver
lining’s got a touch of grey.”
Beyond cynical, this line from the Grateful Dead’s
“Touch of Grey” (released in 1987 and surprisingly,
the only top 10 in the group’s storied history) serves as
an ode to the impending depletion of talent facing the industry
over the coming decade. According to the Bureau of Labor
Statistics, more than 25% of the working population will reach
retirement age by 2010. The expertise these folks will take
with them into their golden years is undeniable and, as
retailers may fear, irreplaceable.
Retail agents depend on the expertise of wholesale brokers
to provide the best products in the galaxy. Over time,
relationships develop, causing business to flourish while
creating lifelong friendships within the industry. But time can
also play another part, that of an undeniable enemy that
catches up with us all.
“Wholesalers sell expertise and experience to retail
agents. That’s our niche,” says Neil Kessler,
assistant vice president and director of business development
for Colemont Insurance Brokers. “Transition of this brand
over the next three to seven years is unavoidable. During this
time, we must be prepared for the retirement of an entire class
of brokers—those people who made what we do
Neal Abernathy, president and CEO of Swett & Crawford,
agrees that continuing the expertise available to retail agents
is a priority. “Myself and other members of the wholesale
community are getting into colleges, doing everything possible
to teach those at the front end of the age spectrum of the
significance of both sides [retail and wholesale] of this
Overseas partners are also feeling the strain.
At a November conference, Richard Ward, chief executive of
Lloyd’s of London, discussed talent depletion alongside
issues including climate change, terrorism and political
violence as “serious concerns” for our industry in
the years forthcoming. Frightening company.
Besides attrition issues, Ward believes “serious image
concerns” are to blame. “Nearly 90% of graduates
won’t consider a role in insurance, and 75% of recruiters
in the industry struggle to attract quality talent. The
collective brainpower of our marketplace generates its wealth
yet is much more difficult to identify, develop and measure
than its physical assets,” he says. “This has
certainly been used as an excuse in the past to neglect it.
This can no longer happen. Talent, knowledge and how our people
are managed are at the heart of our future success.”
Kessler understands the stakes. He and others at Colemont
have created a program to recruit and retain top talent.
Modeled after carrier training programs popular in the
’70s and ’80s, Colemont’s training requires
new hires to spend up to three years on a brokerage team,
mastering underwriting and marketing skills expected from the
wholesale giant’s retail partners.
“They work closely with our senior brokers on all
aspects of the relationship. We want them to understand that
these are the people we want them to become,” he
In addition, trainees must attend a national sales program
in Dallas, home of Colemont’s corporate headquarters.
“Young wholesale brokers need to understand the sales
culture to understand what retail agents face.”
Brokers from NAPCO frequent risk management programs at
colleges around the country with the goal of recruiting top
talent. David Pagoumian, NAPCO’s president and COO, says
the New Jersey-based brokerage has identified another source
for recruiting top talent: people leaving the military.
“Many of these folks have developed superior management
skills and experience and are looking to showcase their
abilities in the private sector. We feel such experience is a
tremendous benefit to our operation.”
New hires enter the “Five-Year NAPCO Plan,”
during which they work in teams with veteran brokers and train
through shared experiences, creating the team mentality
essential in placing more complex risks.
At Swett & Crawford, new hires benefit from the way the
wholesaler organizes the service function into practice groups.
Working in teams, Abernathy says, helps alleviate fears for
both junior brokers and their retail partners, who know there
is always an experienced broker involved.
Time is not always an enemy. There is a glimmer of hope that
a new generation will further wholesalers’ efforts to
identify with a greater segment of the retail community.
Abernathy hopes young agents and brokers will bring to the
industry a new outlook on the wholesaler segment—one that
does not view wholesalers as a market of last resort. “We
write business because we believe we can get the best deal for
the retail agent and the insured,” he says.
Efforts such as these should relieve retailers’
concerns that the absence of an individual will jeopardize the
relationship that it’s taken both sides time to build.
Indeed, there are wholesalers who choose instead to focus on a
different line from that same great song “Touch of
Grey”: We will get by.