What's YOUR plan?
It’s the one issue that directly determines the fate of thousands of insurance agencies, but few principals like to think about it. Some avoid thinking about it at all costs. Others bristle at the very mention of it.
The dreaded “P” word: Perpetuation.
Such hesitancy could be expected from top agents not wishing to spend valuable time pondering the sunset of their careers. They’re busy selling—and objects in motion, after all, tend to stay in motion. But it’s ironic that so many people who have built a successful business out of selling protection against possible loss scenarios now find themselves hesitant toward putting a plan in place to ensure the stability and futures of the very agencies that took them so long to build.
Yet the facts are these, and they are inescapable: According to recent estimates, the number of employees older than age 55 in P&C insurance is 30% higher than any other industry. With so many veterans retiring, the industry needs to fill nearly 400,000 positions by 2020. The situation is especially dire for independent insurance agents and brokers, where the average principal is pushing 60 and many firms lack formal business perpetuation plans.
In short, if you haven’t yet thought about the development of your own succession plan, you’re already behind the curve.
This sense of unpreparedness speaks to a larger issue: The pressing need for the insurance industry to redouble its efforts toward attracting, recruiting and mentoring young talent. The industry’s pathway to its future can no longer be a rope bridge: If the insurance business is to perpetuate itself and thrive, training the next generation of those who will someday lead it is critical—and a shared responsibility at both the carrier and agency levels. Owning up to that sense of responsibility—to yourself, your family and the industry—starts with deciding who your successors will be.
It’s time to ask, when you are gone, what will your legacy be? Will you prepare for the future by willing years of institutional knowledge and insight (and in many cases, a successful agency worth millions in annual premium) to a responsible person or persons whom you deem appropriate to follow you, or will you spend your remaining years hoarding it and watch it pass into history?
To put it more bluntly: They’re your assets. Do you want them to survive you, and benefit both your loved ones and your business?
If you chose the former, the time is now to start adopting the mindset of succession.