Three top insurance industry executives shared their vision of the challenges facing the industry now and in the months to come during a panel discussion at the 2007 Insurance and Investments Convention held in Montreal on Oct. 25. The industry’s public image and recruitment problems were among the top concerns.
Peter McCarthy, president and CEO of AIG Life of Canada and chairman of the board of the Canadian Life and Health Insurance Association (CLHIA), said negative media attention is damaging the financial services industry’s reputation. "The media is quick to talk of Vincent Lacroix, Portus, Norshield…" The media never tells the story of the husband who is killed in an accident and whose family members are protected by the life insurance benefit, enabling them to stay in their house, said Mr. McCarthy, adding that it’s always negative news that grabs the headlines.
Years ago, the CLHIA used to do some marketing work to enhance the industry’s public image, he noted. About a dozen or so years ago, however, the association decided to focus on government relations. It left the marketing of the industry’s public image to the insurance companies. "And unfortunately, we haven’t done a good job."
As a result, the CLHIA’s board of directors has decided to reflect on what it can do to improve the industry’s image, Mr. McCarthy revealed during the panel discussion. At this point, there is no specific marketing campaign planned. The board has just started discussions about this issue, he added.
The low public profile of the insurance industry is another aspect of the image problem. This low profile impacts the industry, particularly when it comes to recruiting young agents, said panel member Robert St. Denis, president and CEO of La Capitale. "The problem is that not only does our industry have a negative image, but in many places it is unknown. People do not know about us."
To combat this problem, La Capitale and 10 other insurers, which have head offices in the Quebec City region, recently formed an institute dedicated to raising the profile of the industry. A priority for the group will be to show college and university students what the industry has to offer. "It is becoming very, very difficult to attract young people into the industry."
When they’re eating supper together and the parents ask a young person what they’d like to do for a career, it is doubtful that the child will mention working in the financial services industry. "It’s not glamorous," so the first challenge is to "sell the profession," Mr. St. Denis explains.
Panel member Les Herr, senior vice-president, individual products at Empire Life, did not agree with the other panelists on the image issue. "I’m not so sure that we have an image problem. Is it fact or fiction? I’ve been in the business for 25 years and frankly, I don’t think our image has ever been better."
The financial services industry, he explains, has come a long way in improving its image since he started out in the business. Professional associations, compliance guidelines and continuing education have all contributed toward increasing the level of professionalism, he says.
He acknowledges that there have been a few high profile cases which have been widely picked up by the media, but this is true for other professions, he says, using as an example the "Lawyers are Rats" cover story published last summer by Maclean’s magazine.
Mr. Herr says he doubts that Canada’s big three insurers have public image problems, pointing to their advertising campaigns. "The insurance industry in Canada is probably one of the most respected in the world."
While he believes the industry’s public image is already strong, he adds that there is always room for improvement. "There’s no better way to build our image than through our advisors, through the work we do with advisors. If we’re professional and do a good job, consumers will see us as professionals."
Meanwhile, Mr. Herr fully agreed with the other panelists that recruitment problems are a major concern. "There are only two or three major companies recruiting in colleges and universities in any major way…10 to 15 years ago, most companies, if not all, were recruiting," he observed.
Explaining how insurance helps people is key to attracting young people. They might say ‘Eww’ to selling insurance, but ‘yes’ to ensuring people’s financial security, Mr. Herr said. "We have to get out and tell Canadians and potential recruits what is so good about our industry and why they want to be there."
Mr. St. Denis emphasized the need to support and provide a framework for new recruits brought into the industry through the independent channel. "We have to give them the tools they need so that they can quickly reach a minimum level of income. We can’t leave them alone with a phone book like in the old days," he said.
Mr. Herr agreed with this viewpoint and said that new recruits have always needed financial assistance to get started. He thinks that this is the reason why few companies are actively recruiting. Particularly during the last 10 years there has been "quite a void" in industry recruitment. "As a result, we are where we are in terms of the numbers of new brokers in the business."
To fill the recruitment gap, Mr. Herr says that insurers and managing general agencies must come together to find a model that will bring in sufficient numbers of new recruits to make a difference. "It won’t be easy and it won’t be cheap, and will come with some success and will come with some failure. But I think we have enough creativity and enough intelligence in this industry to come up with a model."