P R A D

Experienced producers – “free agents” moving from one firm to another – were by far the largest category of producer hires, representing 55% of the hires over the past five years. Is there another professional services industry that hires so few from outside the industry or from college? In light of the fact that our industry is aging, and that nearly half of a typical agency’s business is handled by producers age 50 or over, this is alarming. Is the industry facing a perpetuation crisis?

35% % of Hires from Outside the Industry (including college)

Below is a breakdown of the background of producers hired over the past 5 years.

Background of Producers Hired

Experienced Producer

55% 10% 65%

Insurance Industry - Not Sales Total Insurance Industry

Outside the Industry

29%

College Hire

6%

Total Outside the Industry

35%

Grand Total

100%

Source: Supplemental survey

Averages Do Not Tell the Full Story

The industry success rates are very revealing. However, what these results fail to show is the bigger picture of the full range of experiences. To address the bigger picture, we have looked at firm-wide results for the 562 agents and brokers in the baseline survey and further focused our attention on the results of firms that hired three or more producers in the past five years in commercial lines or employee benefits. This provides a clearer understanding of the results of firms with significant hiring experience.

Disparity in Producer Hiring Success Rates

84%

56%

22%

Bottom 25% Average producer success rate

Top 25%

Source: Baseline survey

Beyond the 56% average success rate for the hiring of producers, we also see that the bottom 25% of firms are only achieving success rates averaging 22%, while the top 25% of firms enjoy an 84% average success rate.

4 Producer Recruiting & Development Study