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When Jonathan Crystal, executive vice president of Frank Crystal & Co., talks to colleagues in the insurance field, he always asks them how they ended up in the industry.

"It's always either happenstance or some degree of a family connection," he said. That's something he well knows, as the son of the current chairman and CEO, and grandson of the founder of one of the largest privately owned insurance brokerages in the United States.

As his company has grown -- and as it prepares for the long-forecasted mass retirement of the baby boomer generation -- Frank Crystal & Co. has increasingly seen the need to build an entrepreneurial, creative and professional sales force that can thrive in the firm's fast-paced, performance-based culture, he said.

"We could no longer rely on a handful of good producers to drive the top-line revenue growth, so we had to institutionalize the whole top-line growth strategy," said John C. Smith, executive vice president and leader of the organization's national Business Development unit and member of the firm's executive committee.

That's why the New York-based global company, which has more than 400 employees in 10 offices around the nation, recently built and rolled out its own custom program to train and develop new sales associates over a 12- to 18-month period.

"It's no off-the-shelf program," Smith said. "We really designed it for what our needs are, short and long-term needs. ... We have a very extensive curriculum that we put them through, but what's unique about it is we are partnering them up with senior professionals in the organization."

The mentors of the new associates help coach their mentees through the process of identifying and calling prospects, developing relationships and managing opportunities, he said.

That process includes an "economic relationship" between the mentor and mentee, he said, with commissions being split between the two for the duration of the training program.

"We are making an investment," Crystal said, "in helping to transfer some of the experiences and expertise of the senior professionals in our industry to our next generation of professionals." And that is necessary, he said, in the "industry context of a diminishing pool of experienced professionals."

It's a growing trend for mid-size brokerage firms to develop such training programs, said Julia Kramer, senior vice president, leadership and management resources at the Council of Insurance Agents & Brokers, a membership-based trade association based in Washington, D.C.

"The big brokerage firms have done it for many, many years. They have the resources to," she said. "Now, our midsize firms are catching on. Many of them are developing recruitment programs focused on less-experienced or non-experienced candidates."

At Frank Crystal, Smith said, the organization looked for high-energy, relationship-oriented individuals who had up to five years of experience in some sort of sales capacity, but not necessarily insurance. They wanted individuals who were willing to "invest in themselves ... to take a step backwards to enter a new industry."

The new hires -- who were in their late 20s and early 30s -- also needed to "reflect the culture of client service and professionalism of an organization like ours. ... That was the highest criteria," he said, "to find people who were able to fit right in to the history and legacy of the organization."

The process of crafting the training program began in November 2011, Smith said. Partnering with an outside sales-training organization, the team at Crystal developed an extensive curriculum, including orientation about the company and industry; internal and external education on various types of insurance coverage; and preparing for licensing exams.

The organization had wanted to bring in six new associates to start off the program when it officially began on May 1. It found five that fit its criteria.

"We went through a pretty extensive screening process," said Crystal, who is a member of the executive committee and leads the firm's national Private Client Services group, "but one of the benefits of the recession has made it somewhat easier to bring talented individuals into our firm who might not otherwise think about joining the insurance industry."

One of the reasons so few young adults think about insurance brokerage, Kramer said, is the subject "is typically not introduced to people in any formal fashion anywhere in their lives unless they have family members or friends in the industry."

"We are not well-known as an exciting go-to career," she said.

One of CIAB's objectives, she said, is to change that. In particular, it works with high school and college faculty to educate students about "the very exciting and very lucrative career known as insurance brokerage."

Too often, Kramer said, when universities offer classes on risk management and insurance, they ignore the intermediary or distributor side. To develop future industry leaders, CIAB members offer their services at schools for lectures and career days, and the organization has a scholarship program for students interested in pursuing industry careers.

In the past, she said, people in the industry would "cannibalize our own people" by bringing in experienced professionals from other firms. With the baby boomer retirement "definitely happening," that's not a viable long-term solution anymore, she said.

About half of the "top producers [of insurance agents and brokers] are nearing retirement -- and nearing means within a decade," Kramer said. "It's coming and it's coming fast.

"Right now, I feel that our leaders in this industry are opening the doors, opening the windows and really scanning the horizon for what our risks are and what our next steps should be," she said. "I really see it as a ... re-energizing of our brokerage industry in terms of the workforce and the workplace."

In many organizations, Smith said, training and development initiatives get put on the shelf in a down market. "That's a 'nice to have' expense and, when things get tough, they kind of park it on the side. We have a much longer view."

The new entry-level initiative, Crystal noted, is only part of the organization's broad commitment to developing and training all levels of employees. "If we are not continuing to invest in our people, this firm is not going to have the future that we expect to have."

--By Anne Freedman

August 22, 2012

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