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By Cyril Tuohy

Sam Pugatch, 30, assistant vice president of DeWitt Stern Group in New York, was a finalist in this year's Power Broker®contest in the Fine Arts category and is exactly the kind of insurance broker who brings technology-based value to his employer. Two years ago, he and a colleague had the idea of building a Web-based program for rare book dealers and art collectors.

So up went the Web page, and in came the queries; closed went the sales, zoom went the profits.

The business to DeWitt Stern from the antiquarian book market has grown about 20 percent annually in each of the past two years, Pugatch said.

Having been weaned on the Web, data networks and electronic communication, young brokers are full of ideas of how to use the Internet to sell more policies, and that kind of value is worth its weight in gold to brokerage houses.

Insurance brokerage houses and agents crave talent that can show C-suite chieftains ways to use technology to cut costs and maximize revenue by selling more commercial policies to a diverse, fractured group of buyers.

The ability to harness the Internet comes naturally to brokers under the age of 40, even when a broker like Pugatch landed at DeWitt Stern "with no fine art background whatsoever," he said, or couldn't tell the difference between an impressionist and an expressionist, or had never heard of priceless collections named the Barnes, the Frick and the Phillips.

The Transparent Generation

Among the standout producers under age 40 -- 14 women and 26 men -- who landed in this year's crop of Power Broker® winners and finalists, it's a good bet that every one of them knows how to use advanced functions in some or all of the Microsoft Office software suite, a Web browser, email, instant messaging, apps and Google maps.

We're talking about young sales professionals like Tammy Mission, 25, with Heffernan Insurance Brokers in Walnut Creek, Calif.; Steven Fisk, 31, with Barney & Barney in Aliso Viejo, Calif.; Sarah Stephens, 32, with Aon in San Francisco; Ruth Watson, 31, with Willis in New York; and Eugina Visor, 34, with Marsh in Charlotte, N.C.

Mission, a 2013 Power Broker®in the Nonprofit category, and Larissa Gallagher, a finalist in the Automotive category with Aon Risk Solutions in Southfield, Mich., were born in 1987.

In 2002, when Mozilla launched its browser suite version 1.0, Mission and Gallagher were 15 years old.

Young brokers cherish their relationship with technology. It has changed them and their clients, and technology has likely changed them all in ways they often don't realize, as workforce experts have often noted.

"My generation is different in that we grew up with Internet and technology, and we have a lot of transparency," said Mission, who comes from a family of small business owners and entrepreneurs.

Mission, who has been at Heffernan for nearly four years, said technology had made her more flexible. She is more comfortable with the information transparency brought on by the Internet than many of her peers in the baby boomer generation, she said.

The 9-to-5 routine doesn't work for her. Nor do the strict dress codes, or the rigid vertical corporate structures. The strait jacket imposed by the enterprise "doesn't yield a very efficient product, and that's all very unappealing to me," Mission said. "We're very flexible, we're fast, innovative, creative. We can do business in jeans, and we can be very effective. Hard to say where that seed was planted."

And, of course, it's not unusual, at least in and around San Francisco, for many of the insureds to be doing business -- often tens of millions of dollars' worth of business -- in jeans and T-shirts.

Brokers in their 20s, like young entrepreneurs in their 20s, are as comfortable with FaceTime as their 50- and 60-year-old peers are with face time over lunch at a restaurant.

Members of Gen Y are as comfortable transferring $30,000 from a bank into a mutual fund using an iPhone as their older peers are using a paper register to balance their checkbooks.

Very soon, they will demand the same kinds of electronic services of their insurance companies, and if carriers and brokers don't deliver in the way they want, these young buyers will just take their business to a broker or an underwriter who does.

Like many young professionals in their 20s, Mission said the insurance industry's rap as being one that is slow to change is a "fair assessment."

It's really the industry's inefficiencies that get her hot under the collar, though: A client emails her a coverage endorsement, which is sent to the carriers, which is then forwarded to the processor, whereupon Mission has to make a note to herself to follow up.

"There's a huge technology gap that's missing in insurance," Mission said. That approach has got to go, and if the industry doesn't do it now, future brokers and carriers will see to it that it does.

There's no shortage of surveys revealing that the insurance industry is slow to adopt technology. And to be fair, the industry isn't entirely to blame. It is heavily regulated and it sells a unique product: a future promise to pay.

So if the industry's not as fast as adopting what is new, perhaps it can be forgiven. It comes at technology from a very different place.

Relationships Redefined

The close relationship younger brokers have with technology isn't without flaws, and the pitfalls can sometimes be glaring. Misspellings, bad grammar and incorrect sentence structure can make brokers look downright silly.

"You should not email like you're text messaging," said 36-year-old Debbie Goldstine, vice president and account executive with Lockton in Chicago and a 2013 Power Broker® winner in the Automotive category. Goldstine said she still carries a BlackBerry because she likes the keyboard. She is hesitant about going to the iPhone because of its glass keyboard.

"My generation as a whole lacks some writing skills," Pugatch said. "I just don't feel like people write well anymore."

Young brokers who have been in the industry for several years, said there's an irony about using technology. Technology, they said, encourages relationships based on transactions instead of relationships based on service, which makes up the core of all commercial insurance transactions.

Brokers and clients who are more comfortable checking boxes and clicking through a policy are at greater risk of missing nuances of language and meaning, and the choices faced by clients in making one decision over another.

That's where older veterans of insurance distribution really bring value to clients, the brokers said.

Younger brokers are used to doing so many things that some of its members even suffer from attention deficit disorder, said Visor, a Power Broker®winner in the Utilities category and a former U.S. Navy nuclear officer now working for Marsh's utility practice.

Older brokers have had the time to mellow, preferring instead to take the time to book lunch or dinner, which is easier for them to do, of course, as they have already built up their book of business and less concerned with bringing in new accounts.

Brian A. White, 34, vice president with the specialty insurance broker Alliant Insurance Services Inc. and a finalist this year in the Public Sector category, marvels at the ability of senior brokers to hold on to clients for 20 or 30 years.

Is it that veterans have learned what young millennials do not yet know? That insurance is a service, not a technology, and that clients use a broker because they want to do business with a particular intermediary.

Older brokers may be a bit hesitant and fearful in the face of new technology, agreed Numa "Bumpy" Triche, 39, regional executive vice president with Arthur J. Gallagher & Co. in Metairie, La. and a Power Broker® winner this year in the Marine category. And though many veteran brokers don't sit on the technological cutting edge, they know enough to make technology work for them to get the job done and use it in such a way as it works for them.

Dan McGarvey, managing director at Marsh in Greenville, S.C., is a Power Broker® winner in the Utilities category. He backs up his PowerPoint presentations in 10 different ways when two or three will suffice, Visor said.

Visor herself prefers backing up presentations on hard drives and thumb drives, but not to the cloud. For now, hard drives are more secure, she said.

Nor should we forget that technology is vulnerable to network attacks, software often suffers from incompatibilities, and cell and WiFi signals go dead for no reason or arrive garbled. Who hasn't been frustrated by the churn of technological change as it caters more to the narrow obsessions of a small elite, at the exclusion of everyone else?

Who wants a relationship with a broker who cares more about cloud security than how a client's son or daughter performed on the baseball diamond?

Brokers who rely on technology alone to retain clients are in for an unpleasant surprise, White said. Ultimately, technology can only go so far. It can never replace a face-to-face meeting, and plenty of experts have noted that technology is no substitute for picking up subtle body-language cues between people.

Many of those cues often give brokers a hint about the state of their clients. Veterans know how to interpret what is left unsaid by clients, or what is explicitly stated but not meant to be taken literally.

In the end, the relationship between broker and client is a two-way street whether technology -- for better or for worse -- comes between them or not.

Brokers are in a symbiotic relationship with clients. "One has no growth without the other," White said.

"We've grown in lockstep with them and I feel that's a very important part of building a relationship with them and that's what people in the business for many, many years have figured out," he said.

Young brokers said the answer is to integrate the technology while nurturing the relationship, as technology and the bonds of a particular relationship will change -- often for the better but not always -- over time.

There will come a point when the young brokers won't be as familiar as they are with today's software and tablet hardware. There will come a time when email, texting, social media and the Internet face obsolescence. There will come a time when the relationship takes precedence over speed.

And, yes, there will come a time when younger brokers aren't so young anymore, a time when today's Gen Yers will age into tomorrow's veterans, and learn what the senior brokers already know.

Of course, today's veteran brokers, having faced the tests and challenges of time, already know all that.

CYRIL TUOHY is managing editor of Risk & Insurance®. He can be reached at ctuohy@lrp.com.

February 19, 2013

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