Recruiting and Developing Young Producers

1. Recruiting and Developing Young Producers Tom Doran

2. Pursuing Young Sales Talent • People are an agency’s greatest asset • Finding those people is often the agency’s greatest challenge • There is an opportunity to include more young individuals in the search for talent • What can we learn about hiring and developing young producers from those who do it well?

3. Producer Recruiting and Development • The Case for Hiring Young Producers • The Economics of Producer Hiring • Best Practices for Producer Hiring & Development

4. 2009 Young Producer Study

5. Successful Young Producers • Hired under the age of 30 • Hired within last 10 years • Selling Commercial P&C or Employee Benefits insurance • Successful

6. Young Producer Study Process 206 54 91 BASELINE SURVEY IN-DEPTH FIRMS IN-DEPTH PRODUCERS • Assessed baseline level of young producer hiring in the industry • Identified firms with success hiring young producers as well as strong sales cultures • Completed detailed survey on hiring and development practices and production results • Identified young producers who have been successful • Detailed survey • Personality and behavioral assessment • Interview

7. Baseline Survey Results Frequency of Young Producer Hires Success of Young Producer Hires

8. Key Findings • College recruiting is working

9. College Recruiting Frequency

10. College Recruiting Success Months Until Validation Year Three New Business

11. Successfully Recruiting Colleges • Investing in on-campus recruiting • Establishing an internship program • Hiring in classes Why recruit at colleges? Because that’s where the talent is

12. Key Findings • College recruiting is working • Well-rounded individuals trump academic superiority or sales experience

13. Look For the Raw Athlete 58% 41% 48% • Percentage of Successful Young Producers who were involved in at least two campus activities and who worked during school • Percentage of Successful Young Producers who were involved in at least two campus activities, had a leadership role in at least one student organization and who worked during school • Percentage of Successful Young Producers who were involved in at least two campus activities, worked during school and maintained a 3.0 GPA or higher

14. Variables Influencing Success

15. Key Findings • College recruiting is working • Well-rounded individuals trump academic superiority or sales experience • Young producer economics can be attractive

16. Comparing Returns

17. Capturing Returns • The economics of Young Producer hiring don’t appear riskier or weaker than the economics of producer hiring in general • Young Producers give agencies an opportunity to diversify risk in producer hiring • Young producer hiring can be a low-cost organic growth strategy

18. Key Findings • College recruiting is working • Well-rounded individuals trump academic superiority or sales experience • Young producer economics can be attractive • Young Producer hiring is a different game

19. Attracting Young Producers • Compensation opportunity is tremendous • For younger producers, cash is more important than equity • Ability to build relationships with clients • Freedom and flexibility • Gratification: “Winning” Reaching the Target Audience Messaging 46% Percentage of Successful Young Producers entering the industry via family, friends or “accident”

20. Managing Younger Producers • Young producers generally need more extensive training in the insurance industry and in sales • Mentoring programs are critical • 97% of the firms in our study had mentorship programs • Most programs lasted up to three years or longer • Hire in classes to foster competition and efficiently spend training dollars

21. The Economics - The Cost of a New Producer

22. New Producer Five Year Cash Flow Return on Investment

23. New Producer Five Year Total Return on Investment (with asset value included)

24. 2 Reasons why Reinvesting in Agency is so Positive Financially • State and Federal Government subsidize people investments • Asset value is larger than most people realize

25. Four Key Principals in Recruiting and Development • Recruit in the Right Places • Recruit at the Right Rate • Set New Hires Up for Success • Make Quick Mistakes

26. Recruit in the Right Places - Producers Current Sources Success Rate 62% All categories, 2013 BPS Study Are You Recruiting in the Right Places?

27. Recruit in the Right Places - Producers Easier to Teach Insurance or Sales? Source: Group of Large Agents

28. Recruit in the Right Places - Producers • Maturity • Business Acumen • Compensation Requirements • Active Management Required • Life Experiences • Network Challenges of Under 30 vs. Over 30 What is Your Agency Best Equipped to Handle?

29. Recruit at the Right Rate – Effective Investments in Sales Talent Net Unvalidated Producer Payroll Source: 2013 BPS, Agencies with Revenue between $10.0M and $25.0M

30. Set New Hires Up for Success - Producers On a scale of 1-10, what factors have had the most impact on your success? Source: Young Producer Study Update Mentoring is Perhaps Most Important

31. Make Mistakes Quick - Sales How Soon Do You Know If a Producer will be Successful? Source: Young Producer Study

32. Make Mistakes Quick - All • Culture • Economic • Clients • Carriers • Productivity Three Key Principles Impacts of Non-Performance • Hire and Fire Day One • Clear and Measurable Targets • Frequent Performance Assessments Misses Have Broad Impacts

33. To access Reagan’s Young Producer Study Update – Three Years Later, go tohttp://tinyurl.com/kjjnf75or visit our webpage atwww.reaganconsulting.com

34. Tom DoranSenior Vice President & Principal Tom joined Reagan Consulting as a consultant in 1993 and became a principal in the firm in 1995.  He holds an undergraduate degree in Computer Information Systems and a Masters of Business Administration from Georgia State University. Before joining Reagan Consulting, he worked in the computer industry, both as a software developer and as a management consultant. Tom’s areas of expertise include merger and acquisition representation, agency valuation, ownership perpetuation planning, agency valuation enhancement and strategic planning facilitation. Tom is a regular contributor to Reagan Consulting’s industry studies and is frequently published in various insurance industry publications. He also speaks on a regular basis to industry trade groups and associations on a wide variety of topics concerning the insurance distribution system. 404.869.2534 tom@reaganconsulting.com