P R A D

chapter 1 Introduction & Methodology

In 2012, Reagan Consulting produced The Sales Study . In it, we examined insurance agents and brokers that were achieving the greatest sales success and explored the three essential elements that set these firms apart: they equip producers for success, they create a culture of accountability, and they recruit and develop new producers. Of these elements, agents and brokers struggle most with the ability to recruit and develop new producers. Agents and brokers routinely identify hiring and developing producers as the biggest challenge they face – not just in sales, but in their business overall. Most have not properly assessed the level of hiring needed to sustain their growth objectives or to perpetuate private ownership. And when agents and brokers do hire, the success rate is far less than it could be. This combination presents a significant problem for agents and brokers and for the insurance carriers that depend upon them and is the genesis of the Producer Recruiting & Development Study . Our hope is that this study provides an impetus and a framework for agents and brokers to establish appropriate levels of producer hiring and to improve the ultimate success rate of those hires. To accomplish these objectives, we focused on actual hiring practices and outcomes for agents and brokers over the past five years. This time frame ensured a statistically relevant data set without overwhelming study participants with requests for historical producer data. We started with a baseline survey focused on hiring activity and success over the past five years. The baseline survey provided agency demographic information, the number of producers hired by product line, and the frequency of producer “success” (defined as validated or on track to validate). We also asked firms to provide us with a self-evaluation on the firm’s recruiting, hiring, training and development performance, as well as a self-evaluation on whether producer hiring over the past five years met, exceeded or fell short of appropriate levels. We received responses from 562 firms, ranging from small independents to the largest brokers in the U.S. In aggregate, these firms hired 4,641 producers over the five year period. 562 Firms participated in the baseline survey 4,641 Producers were covered in the baseline survey Methodology

1 Producer Recruiting & Development Study