At CNO Financial Group, the plan is to trim both the number of agents coming in the front door and the number of agents leaving out the back door.
Company executives gave few details about their small-scale pilot programs for agent retention except to say that conversion into “successful new agent status” has gone up at the company, which targets middle-market consumers with net worth of $250,000 or less.
Experimenting with different compensation levers has also helped, said Gary Bhojwani, president of CNO Financial, headquartered in Carmel, Ind.
The thrust is to “reduce the front door if you will, reduce the raw number of brand-new agents we bring on every year and increase the success percentages and increase the retention,” Bhojwani said in a conference call with analysts last week.
The highest sales come from agents that are referred into the company and already have insurance agency experience, but have an interest in expanding their expertise into the securities area, company executives said.
Bankers Life: Agent Count Drops, Premium Rises in 1Q
At CNO Financial subsidiary Bankers Life, which sells life, health and annuity products through the captive agency channel, the average producing agent count dropped 6 percent to 4,404 agents compared with the year-ago period due to fewer first-year agents, the company reported.
Average producing agent count is considered a predictor of future sales and Wall Street analysts track the measure closely.
First-quarter collected premium rose 4 percent to $688 million compared with the year-ago period, the company reported.
New annualized life insurance premium dropped 18 percent to $18 million, but total collected premium on annuities rose 10 percent to $258 million, Bankers Life reported.
Analysts expect to learn more about agent initiatives and widening the product mix available through different distribution channels at CNO Financial’s investor day June 5.
Recruiting new agents, the lifeblood of life insurance sales, never hurts so long as they stay and the help the insurer grow.
Washington National Premium Rises
Agent growth appears to be helping CNO subsidiary Washington National, which sells life, annuities and Medicare supplement through independent agents.
Average producing agent count in the first quarter grew 6 percent to 950 agents compared with the year-ago quarter on strong recruiting and retention, the company reported.
First quarter collected premium rose 5 percent to $173 million compared with $166 million in the year-ago period, the company said.
A declining unemployment rate may make it even more difficult to recruiting the right kind of agent – which has always been a challenge.
In 25 years in the business, “I haven’t yet encountered an environment where people are knocking on our door, dying to become agents,” Bhojwani said.
But by targeting recruitment efforts and refining the ways in which we compensate agents “we think we can find the right folks that want to do this for living,” he said.
CNO Beats Street
CNO Financial last week reported first-quarter net income of $62.3 million.
On a per-share basis, the company said it had net income of 36 cents. Earnings, adjusted for non-recurring gains, were 34 cents per share.
The results surpassed Wall Street expectations. The average estimate of four analysts surveyed by Zacks Investment Research was for earnings of 31 cents per share.
The insurance holding company posted revenue of $1.07 billion in the period.
CNO shares have climbed roughly 8 percent since the beginning of the year. In recent trading, shares hit $21.30, a climb of about 5 percent in the last 12 months.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected]
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