6
Questions Producers
Should Ask to Ensure
Their Company Fits
Their Goals
a publication of
Insurance industry producers are often Type A personalities and like to control their own destinies.
Many find themselves in the hands of a company that is successful and has a stellar reputation but
also has strong oversight, makes decisions that are not in the best interest of the producer, or has
a leadership philosophy that does not align with the producer’s. For those with an entrepreneurial
mindset, their current company might not be the best fit. Taking a step outside the traditional
model may be a great move for such entrepreneurially inclined producers.
When you reach the point where you realize you need to explore other options, there are six
questions you should ask yourself to determine whether another company and compensation
model better aligns with your personal goals.
Q1
Does my package fit
my financial goals?
In the typical corporate model, insurance agency producers have no equity in
their book of business, commissions are weighted heavily to new business,
and at retirement, they have no ownership. For those who do not have an
entrepreneurial mindset, this model works best.
Depending on many unpredictable influences, such as the current
wave of mergers and acquisitions, market conditions may necessitate
commission reductions, clients being moved around by management, and the
implementation of other strategies to accomplish steady revenue growth for
the firm, many of which could leave producers’ future trajectory changed and
outside their control. Additionally, without equity or ownership, a merger or
acquisition could leave a producer in a high-pressure situation with possibly
reduced compensation.
In contrast, the entrepreneurial model typically offers
high commissions for both new and renewal business, equity in
your own book of business, and stock ownership options. For
this model, retirement holds considerable monetary advantage
compared to the corporate model. For those who like to control
their own destiny, this model is a much better fit.
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Q2
Have I bought into
misconceptions
about other options?
While the corporate compensation model is fairly simple for
most to understand, there are many misconceptions about
the entrepreneur model—the most common being that, in
the end, it will cost you more. Nothing could be further from
the truth.
For the corporate model, many
office functions are taken care of by the
corporation, e.g., accounting, payroll,
technology, market access, tools, etc. With
the best agencies, these are also taken care
of in the entrepreneur model. Contrary to
false impressions, you are not left on your
own. You are able to be your own boss, have the support of
a corporation, and direct your own success and destiny.
Avoid misunderstandings about your options by
comparing the actual pros and cons of each compensation
model to determine the option that bests fits you. (For a
complete breakdown and comparison of both models,
download “The Secret Truth” infographic.)
Q3
Does my package
provide freedom for
work-life balance?
As author and professional speaker Mark
Tewart put it, “You don’t have a work life or
a professional life or a personal life; you just
have a life.” And he’s right. People are more
and more inclined to develop not only their
career but also their family life at the same
time. Ever since 9/11, people are less likely to allow
work to take over their life. That means you need to find
a company where you can have a healthy balance of
professional success and family interaction.
“Even in the busiest of schedules, the most
practical and effective way we can live is by aligning
our personal priorities of work, family, health, and wellbeing,” says Christine M. Riordan, provost and professor
of management at the University of Kentucky. “Such
realignment can bring huge gains in emotional and
physical energy, not to mention greater clarity and focus
at work.”
Consider how important it is to you not to miss
out on important family moments. For example, can
you take time to go to your child’s soccer game in the
middle of the afternoon without disapproving looks from
management? If not, you may need to do whatever it
takes to make a move.
Q4
Does my company’s
leadership style
align with my own?
You may think leadership style can be overlooked, but story after
story demonstrates that this is not the case if you seek a stable, longterm position in your company. Factors such as heavy or changing
management oversight or a culture less focused on customers can
present a real problem if you want to treat your customers well and stay
where you are for many years.
For example, shoe retail titan Zappos had an unstable
management style and alienated a massive number of employees. CEO
Tony Hsieh instituted “holacracy,” a style of leadership that replaces
traditional hierarchies of management with self-management, and after
a short period, it didn’t seem to be working. Hsieh then
instituted the next stage, called “teal,” offering those who
weren’t happy with the new direction an out that led to a
29 percent turnover in one year alone and the company
dropping off Fortune’s annual 100 Best Companies to
Work For list for the first time in eight years.
Great leadership is an important element of
satisfaction with your company, but is it important to be happy in
your job? A recent study by economists at the University of Warwick
found that those who are happy at work are 12% more productive. For
those who are unhappy, productivity suffered by a 10% decrease. For
commission-based producers, an increase or decrease in productivity
can have a considerable impact on their income, so happiness is clearly
an important factor for their success.
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Q5
Will your future be
secure if your company
is purchased?
In the current climate, it is exceedingly tempting for agency
owners to sell their firm and enjoy their retirement. From
the challenges of perpetuation to technology demands to
the high valuations being given, selling at this time is seen
by many as a win-win—for the owner, that is.
But what if you’re not an owner and you have no
equity in your book of business? The climate for you may
turn high-pressure quickly. Investors want to make back
their money, and without your agency’s top leaders, more
responsibility for driving new revenue falls to the producers.
In 2015, there was a 54%
increase in M&A activity in the
insurance agency space. Experts
say that this year will be more of the
same. Where will that leave you in
your company’s current model?
Q6
Does my company
allow me the freedom
to leave?
In the U.S., just 48.3 percent of employees are satisfied
with their jobs, according to The Conference Board 2015
Job Satisfaction Survey. Clearly many people want the
option to move should they deem it necessary. But if
you are locked into a noncompete that would make it
difficult for you to pursue the best options for your life,
it’s probably time to consider better options that, in the
long run, put you in a better position.
Nasty noncompetes are no fun. If you do not have the freedom
to come and go without steep and painful penalties, you may be in
the wrong organization. There are companies that not only do not
have a noncompete but will also work with you if you decide to make
a change. Smart leaders are not afraid to allow their top performers
to leave. They know that the key is not to lock everyone in place but to
build an environment no one wants to leave.
Are you in the right place at the right time?
It’s a question that can plague a person who is achieving a high level
of success but has a nagging sense that there is a better option
elsewhere. Ask these key questions to determine whether you need
to make a move. Then seek out the company that has the model that
best fits your needs.
WHAT’s NEXT?
See the last page for a menu and links to
Inforum’s other ebooks, tools and resources.
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About the Author
Robert Motley
Robert Motley, CIC, is a regional president with Insurance Office of America (IOA)
and has been working in the insurance industry for nearly 30 years. He began
his insurance career in 1987 and has built extensive expertise in sales as well as
management and operations.
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Don’t miss other helpful Inforum ebooks and tools:
Download “5 Trends That May Rock the
Insurance Producer’s Financial Future”
ebook to learn about the key trends that are
happening right now that will change your
financial trajectory.
Download “The Secret Truth” infographic
to see a side-by-side comparison of the
corporate and entrepreneurial model. The
bottom line just may shock you.
Download “The Insurance Producer’s 4-Step
Guide to Fast-Tracking the Next Move”
ebook to ensure you cover all the bases for
finding and comparing compensation models.
Includes important checklist, too.
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