February 21, 2012
Risk & Insurance
The Vanguard of Brokerage 3.0
By: Michelle Kerr
Ask 50 young brokers how they came into the profession and you're likely to get 50 wildly different stories. A chance encounter on a golf course or in an elevator is just as likely to have put someone on the path to insurance brokerage as a family recommendation or a campus career fair. Some might even scratch their heads trying to remember how they got there at all.
There is something they have in common, though. They're all damn happy to be there.
The rising stars of the brokerage industry talk about their careers with adjectives like "exciting," "dynamic," "innovative" and "robust" -- not words you'd historically find in the same sentence as insurance. And that's exactly what they want to change about the business. They aim to banish, once and for all, any lingering, outdated notions about what it means to be an insurance broker. Risk & Insurance® asked a few of them to open up about the industry's increasingly youthful face as well their hopes for its future.
MIXING IT UP
Top young brokers, like their predecessors, share a love for helping clients solve problems. But there are other aspects of the business that have a distinct appeal for this group. One is the ability to meld different interests and utilize multiple skill sets.
Morgan Anderson is a perfect example. "I realized coming out of school that a lot of my friends were going into real estate," Anderson said. "I thought, 'Gosh, that seems like it would be fun to do.' "
But Anderson, whose family owned a regional brokerage firm for 40 years, had inherited the family passion for risk management as well. He began exploring options for having it both ways, and found it. Anderson is the real estate and hospitality practice leader for Orange County, Calif., with Arthur J. Gallagher Risk Management Services Inc.
Marsh's Allison Havourd fulfilled her childhood dream of obtaining a law degree and then spent time working on Capitol Hill. Later recruited by Marsh, she realized immediately that she could have a career that offered the rewards of helping others without abandoning her love for the law. "Once I got here, I never looked back," said Havourd, vice president in the broker's Financial and Professional Liability practice for financial institutions.
Scott Kannry holds a legal degree as well. Employed with Aon soon after college, Kannry felt drawn to the legal side of the brokerage business. To satisfy that pull, he entered a dual JD-MBA program at Northwestern University. Now a vice president with Aon Financial Services Group in New York, Kannry said he appreciates how the unique environment of brokerage allowed him to carve his own niche.
He went into the JD-MBA program knowing that he didn't want to practice law, "but that it would make me a better businessperson," he said.
Kannry considered his options after graduation, but he was quickly frustrated by the opportunities he saw in the banking and consulting fields. Posts for which MBAs are hired are so specific that they didn't allow him to straddle both worlds. "I wanted to find a job where I could really leverage the best of both worlds," he said. "That's why I came back to insurance."
GOOD FIT FOR TOP TALENT
The distinct structure of the brokerage industry also allows young producers a lot more autonomy and flexibility than they might find elsewhere, and that's particularly appealing for these driven, high-energy members of generations X and Y.
"It's an industry where you can shine from a younger age," said Josh Roach. His peers in other industries don't get the same level of exposure to clients, "nor the responsibility and accountability that comes along with it." Roach, based in Hong Kong, is senior vice president, Asia practice leader, in the Private Equity and M&A Services unit with Marsh.
Kannry said he's made similar observations about his peers as they launched careers in law firms or as they began their post-MBA work at consulting firms or banking firms.
"The next few years of their lives, they're reviewing documents or developing PowerPoint slides and so forth," he said. "It's very structured in terms of what they're able to do, it's just that type of environment. But with insurance, the level of flexibility and responsibility that I've been given is really unparalleled."
Brokers in their 30s, some of whom have young families, appreciate that they have something else that's tough to find in any other industry these days: job security and stability.
"My friends who work in banks are concerned about their jobs," Roach said. "For them, 2012 won't be the year of 'Will we get big bonuses?' it'll be a year of 'Will we keep our jobs?' "
That's encouraging more job seekers to give brokerage a second look. Roach recalls a recent encounter with a group of MBA students who spoke excitedly about the insurance industry and its ability to provide job stability.
The group, he said, were the sort of hot young talent that would typically be drawn to the Morgan Stanleys or the Goldman Sachses of the world. "But, in fact, they saw that a career with one of those institutions could be potentially unstable," he said. The bottom line is that no matter what, people still need insurance.
Stability aside, it's the challenge and vitality of the work that keeps young talent on board. They quickly embrace the insurance brokerage business, no matter what drew them there in the first place. It's an ideal career choice for the best and brightest, the type with a low tolerance for boredom.
"Every day there's a new issue that crops up," said Los Angeles-based Charity O'Sullivan, senior vice president at Marsh. "Our clients are so diverse and I'm helping them achieve their goals ... it keeps things interesting. I'm not just working for one company that does one thing. I'm working for 30 or 40 companies that operate in every aspect of our society."
Despite gains, the brokerage business and insurance as a whole still struggle to shake off what Havourd calls their "stuck-in-the-mud" reputation. Changing perceptions is vital to ensuring that the industry can continue to attract fresh talent. The old mindset of "This is the way we've always done it, so this is the way we should continue to do it," just doesn't fly anymore.
What's probably saved the industry from falling behind is top leadership's willingness to change, Anderson said. "They've had to open their minds," he said, "and to look at young talent and see past their youth. They've had to be willing to really look at their strengths and capabilities."
As a result, the industry has been able to keep its doors open for growth and reinvention. Younger brokers, Kannry said, thrive on innovation and want to help the industry evolve. They operate from a mindset of "creative destruction." That's what has been helping the industry remain progressive and ahead of the curve.
Chances are, there's a whole lot more "creative destruction" around the corner as well. Jason Peery, an account executive at Aon Risk Solutions in Los Angeles, said he sees another shift in the works as more universities are offering degrees in insurance and risk management. Graduates taking positions at carriers and brokers are far more informed and prepared than their peers only 10 years prior.
"There's a growing pool of young brokers in our office that are extreme go-getters," Peery said. "They have degrees in risk management, they have the CPCU already taken care of, they're amazing. The folks that I'm interviewing now are coming in with Harvard degrees and all kinds of credentials that my generation didn't have."
The more successful the industry is at maintaining a steady infusion of young talent, the better it will be for clients and for the health of the insurance field as a whole. "The younger ones have the energy and they're fearless," O'Sullivan said. "It keeps everyone on their toes and that's a good thing."
This strong showing of ever-younger producers is also driving firms to adopt and embrace new technologies at a faster pace than ever before, Havourd said. She sees a distinct difference in the way her younger peers operate, even though they're only a few years behind her.
"They're so tied to technology -- they're reliant on it," Havourd said, and Marsh has really had to embrace that.
"We now have electronic databases and we're talking about electronic filing. It's all happening very fast and that's largely being driven by this younger group and the way that they work."
Now is the time to eliminate the age gap in the brokerage business, younger brokers said. If that can be accomplished, there may no longer be a need to designate the "Under 40" brokers.
"We want to make it where it's no longer the oddity that you're under 40 and you actually seem to know something," Anderson said. "That's really going to strengthen insurance and risk management on all fronts."
At the end of the day, it's the 20-somethings and 30-somethings working in brokerage firms right now who will be responsible for shepherding the industry into its next phase.
Their response? Bring it on.
"We're helping the world and economies around the world evolve on more solid footing that the generations before us," Kannry said. In the process, he said, they will have turned the brokerage industry into a premier destination of choice for professional talent.
"We're the ones who are saying we understand this business, we like this business, and we're going to continue to make this business better," Anderson said. "Our generation will be seen as the ones who made insurance a career, and not a fallback position."