Leading the Pack

Industry-wide discussions about broker succession two years ago have planted seeds that are now starting to blossom in the form of emerging broker leadership training programs.

Everywhere one looks, a new program is being developed or introduced that offers specialized training for young brokers — in particular, young brokers who are demonstrating the talent and ambition required to take over as the principal of a brokerage.

“There is an older Baby Boomer generation that is in senior management sector now, so there’s definitely a huge issue with succession planning,” observes Carey-Ann Oestreicher of the Insurance Institute of Canada. “I think that a lot of people [in the brokerage community] are more in tune with that and thinking it’s not that far down the road anymore, and that they need to be thinking about succession planning. People are definitely putting a huge focus on that from what we’ve seen. Even with the people participating in the [Institute’s Chartered Insurance Professional] courses, you can definitely hear in their feedback an interest in taking their knowledge to the next level — management level thinking, how to lead a brokerage or take a senior account executive position at one of the big brokerages.”

The broker community’s need for this knowledge is well-documented. In May 2008, the Institute published results of a large demographic study it conducted that specifically related to Canada’s property and casualty insurance industry. The study found “the research justifies the industry’s concerns about recruitment, retention and succession planning in the broker and adjuster communities.”

Specifically, the study learned that “for brokers and agents, [the study] demonstrates that one-third could retire within the next 10 years; significantly more could retire if they are in the management cadre.”

Recognizing the need for leadership training, the industry’s response has been specific and targeted. Insurance companies, broker associations and the institute all recognize that leadership training means much more than simply re-hashing the nuts and bolts of good sales technique.

INSURANCE COMPANY PROGRAMS

“Brokers today are continually getting bigger, and the leadership now needs a much different skill set,” observes Shawn DeSantis, senior vice president of personal and commercial insurance at RSA. “It’s human resources, it’s finance, it’s pure motivational leadership, it’s strategy, it’s sales. So these brokers are moving out from what started as a sales business into a much more sophisticated business, and therefore their leadership needs to get more sophisticated.”

Drawing on his own executive development training two years ago at Oxford University, DeSantis has worked to establish the ‘Making Partner’ program at RSA. Launched in 2008, the program partners with Queen’s University to offer specialized classes in leadership to brokers (it’s not exclusive to RSA brokers). Brokers consistently cite the program as among the most comprehensive leadership training programs available.

This year, a group of 17 ambitious and motivated brokers, participants in the Making Partner program, were brought together for three days at the Donald Gordon Conference Centre at Queen’s University. While there, they took full-day classes on topics such as financial planning, leadership and business strategy.

In the business planning strategy session, for example, the students were asked to consider what differentiates one product (the course instructor used the example of a camera) from another, and ponder whether it was possible to create an insurance product that a competitor could not easily imitate. The question led to an interesting discussion about the nature of the insurance product, which one broker in the class described as a “grudge buy” for consumers. How, one broker asked, could you get consumers as excited about buying insurance as they would be about buying something tangible like a camera?

DeSantis said the 17 people pondering such questions each received the endorsement of their brokerage principals, who wrote letters in support of the young brokers they viewed as the most likely to succeed them. The students selected for the program were drawn from across Canada and generally have a minimum of 10 years of professional experience. RSA has made a five-year commitment to the Making Partner Program and expects to educate about 250 future broker principals during this time.

Intact Insurance (formerly ING Insurance Company of Canada) offers a three-and- a-half-day program called the Executive Leadership Program. The program brings together the company’s partners and executives with like-minded, entre- preneurial brokers to gain insights into what kinds of strategies brokers might employ. An atmosphere of candor is encouraged, says Stephanie Zee, Intact’s vice president of sales and business development. She says the “refreshing” openness is critical to establishing a network among future broker leaders, as well as to building a body of specific knowledge that individual participants can relate to their own experiences.

DeSantis says sophisticated leadership training programs for brokers definitely benefit from the substantial financial resources available from global insurance companies like RSA. But this is not to imply that broker associations are sitting by idly, waiting for insurance companies to offer brokers leadership courses.

BROKER PROGRAMS

Dan Danyluk, the president of the Insurance Brokers Association of Canada (IBAC) said his association has been looking at the broker succession issue for a number of years. Like the insurers, brokers recognized they needed a more sophisticated skill set to lead than simply to become good producers. This realization took the form of a business strategy program launched two years ago, developed by brokers for brokers, called the Canadian Professional Insurance Brokers program.

“We do a great job right across the country of doing technical training,” Danyluk says of existing training courses for brokers. “If you want to know what to with wood stoves, there’s training. If you want to know what to do in insuring condominiums, there are courses. What we really moved to is that how do we make sure that, as members of the profession, our personal skills are stronger. That’s why you’ve seen the development of some of the leadership initiatives.”

Currently, IBAC is probing the opportunity to establish an MBA-level of training for brokers in business strategy and strategic engagement.

The Insurance Brokers of Ontario (IBAO) has just recently launched its own form of young broker training in the art of leadership, called the Future Leaders Program. Randy Carroll, the CEO of IBAO said the program developed in 2007 in response to the association canvassing both brokers and companies in Ontario, asking them what skills young brokers will need to become broker principals in the future. The program’s promotional literature promises to help brokers develop effective communication skills intended to grow the business, develop positive working relationships within their brokerages, motivate others and define them as leaders within the office and the industry. The program offers one-on-one coaching throughout the term of enrollment.

“From a provincial base, what we heard from our members was: ‘We’ve got all of these things we’ve done with perpetuation: you’ve told us how to put a perpetuation strategy in place, what we need to do to look at succession, you’ve got the financial piece, the human element, you’ve talked about the family — but you haven’t really done anything for us to help educate our future potential leaders,'” Carroll says. “We invested $100,000 to date to come up with what we think is a very vibrant, well-thought-out and detailed approach to leadership as it relates to the insurance industry.”

INSURANCE INSTITUTE PROGRAM

It’s not surprising that the Insurance Institute, w hich helped to quantify the demographics that suggest the need for all of this leadership training, incorporated a leadership course into its Chartered Insurance Professional (CIP) curriculum four years ago.

“What the Insurance Institute offers within the CIP program [is] the Broker Professional Series” Oestreicher says. “In particular, there is a course, C-132, which covers practical issues in broker management. That course looks at assisting brokers in developing expertise leading to senior roles. The curriculum includes topics applicable to senior accounting executives, partners and broker- owner planning — all of the different things like HR issues, sales, financial management, succession planning and professional liability.”