Unemployment may still be high because companies aren’t hiring, but one sector is the exception: Firms specializing in high-tech manufacturing are begging for workers because skilled labor simply isn’t there. According to a recent New York Times article, factory owners have been steadily adding jobs since the beginning of the year and would love to hire more, but can’t fill many openings because there’s a mismatch between the kind of skilled workers they need and the applicants out there.

Part of the problem is that young people don’t see manufacturing as a career path. And why should they? U.S. manufacturing has been on the decline since the 1970s. But the ugly reality is that a robust economy can’t be built on service and retail alone. Our staggering trade deficit is evidence that America doesn’t make tangibles anymore — we just buyand sell stuff to each other, and most of that stuff is made in other countries.

The other side of the equation is that in spite of the wonders and ubiquity of technology, not everyone wants to spend 40 or 50 years sitting in a cubicle punching computer keys. Neither of my Depression-kid parents ever finished high school — they were factory workers. Their idea of nirvana was a “nice, clean office job,” and for that you needed an education. The irony is, in those golden post-WWII days, my uneducated parents probably made a better living on the factory floor than most people working today’s nice, clean office jobs.

Back in the day, there were technical schools where kids who weren’t “college material” could learn a trade. Today, when you need a B.A. or B.S. to be considered for a receptionist job, kids who want to go into manufacturing need a college education. Unfortunately, much of the grant money for tech majors has dried up, according to Wisconsin Public Radio.

On the bright side, there are organizations that are working on educating young people on this viable career path — and insurance is helping out.

I recently spoke with Janice Allen, national program director at CNA, about the CNA Foundation’s $15,000 funding of Nuts, Bolts & Thingamajigs (NBT), a program sponsored by the Fabricators & Manufacturers Assn. International (FMA). NBT centers on a national summer camp program for grammar and high school kids during which they spend 2 weeks at a manufacturing facility, learning about the business, and end up actually making something to take home. The camps, which start in June and run through August, are connected with community colleges in the area, which partner with local manufacturers to host the programs. 

“The idea is to get the kids interested at an early age and consider manufacturing as a vocation,” Allen said. “Even if they don’t go into manufacturing, they will have appreciation of what it means.”

CNA’s involvement is a multiple win for the insurer: because they are the endorsed business insurance carrier for FMA, the sponsorship helps build their relationship with the association, demonstrates commmunity involvement, and assists in developing a pipeline of new employees to keep the manufacturing industry viable. “In an industry where the workforce is aging, and where it’s hard to find replacements, there is no stronger thing we could do to support that,” Allen said.

Given the current deadlock  in Washington on any meaningful job creation and training programs, the CNA/FMA partnership seems to be a workable solution to a very real problem.

Let’s face it, the news isn’t good, no matter where you look. Unemployment figures refuse to budge, oil continues to pump into the Gulf, the stock market is wobbly, the EU is in financial disarray, and politicians spend more time finger-pointing than doing anything about it all.

That’s the macro-level bad news. On the positive side, independent agents are still holding up their end of things. And all I can say is, you guys must be really busy. AA&B and National Underwriter recently called for nominations for our first joint Agency of the Year awards, and although we received plenty of requests for submissions forms, in the end many took a pass on the July 1 deadline.

Although this may be a reflection on our selective criteria, I suspect there’s more to it than that. Based on what I hear from individual agents, things are simply too hectic at their agencies for them to take the time and thought required to respond. A good news/bad news thing: The good news is you’re busy, the bad news is staff cutbacks have probably left you too shorthanded to do much else besides just get along.

AA&B columnist Chris Amrhein recently commented to me about the lack of feedback on my posts at this blog, and I theorized that the crappy economy is keeping all of us too busy for niceities like forum comments. As an insurance educator, Chris is constantly out and about in the field with you guys, and he believes that independent agencies — small businesses serving small businesses — are run by inherently optimistic entrepreneurs who hate cutting back or operating in “survival mode,” but are forced to based on what’s happening in the larger economy. It’s “Chicken Little” syndrome, with agents at the mercy of the tidal wave of bad news begetting more bad news.

Not surprisingly — and tying into Chris’s original observation that my blogs that get the heaviest response deal with social media — the antidote seems to lie in technology. Chris calls Apple the performance exception to the current malaise rule:

In this economy, how can one company consistently continue to charge more, for arguably similar or possibly inferior technology, and still blow results through the roof? Perhaps (Steve) Jobs hasn’t gotten the message what he’s doing just won’t work anymore in this economy. Lord knows there are analysts and pundits daily trying to get him to see the light, but the fool just won’t listen. I wish some on our industry and others would be so foolish.

Very true. But assuming parity between its products and its competitors, what really sets Apple apart? For one thing, Apple is a master at perpetuating its brand, especially to young buyers. Not only that, but Apple gets there first, wherever “there” happens to be. Combining innovative products with ubiquitous branding equals unsurpassed market penetration.

The lesson to be learned for us? Don’t let today’s economic headaches keep you from looking at tomorrow — where the markets are, what are the emerging industries and business needs, and how you can help solve your clients’ newest problems. And of course, don’t underestimate the power of carving out a unique identity for your business and exploiting it to the max — especially through social media, where the new buyers live.

Don’t let “survival mode” get in the way of your future. Even if it hurts a little, take some time right now to think outside the box for ways to move your business out of today’s hard times and into the future.

Last week I had the pleasure of attending an independent agent seminar presented by Hales & Co. and hosted by National Underwriter and AA&B on “creating and enhancing shareholder value.”

Don’t let the Hales tag fool you: although M&A was a large part of the discussion, it was by no means the only topic. In fact, the all-day event pretty much ran the gamut of all the challenges independent agents face, from complying with the new healthcare reform law and other legislation to building a stronger brand.

The main message I came away with was this: Being an independent insurance agent is not for wimps. Not only are you stuck competing in the worst economic mess since the Great Depression, but you also have to worry about complying with state and federal regulations, finding new business, tracking your insurers’ financial stability, and on top of everything else, staying on top of Facebook, LinkedIn and Twitter.

And now, to add insult to injury, you’re also a target for professional wrestlers.

In a story that sounds like something from the Onion, last week the St. Petersburg Times reported that Hulk Hogan (real name: Terry Bollea) has sued his insurance broker, Wells Fargo Insurance Services, claiming the broker should have offered him an umbrella policy, which would have protected him from lawsuits when his son crashed his car, catastrophically injuring a passenger in 2007. Although he had a third-party auto liability policy with a $250,000 limit, Hulk recently paid a confidential settlement in the accident, which the broker lawsuit seeks to recover.

The case goes to the heart of the broker-as-consultant issue, which holds the profession to a higher standard of ethics and expertise than a mere policy-pusher. According to the Times article:

Didn’t Bollea have a personal responsibility to investigate on his own what he needed to do to protect his multimillion-dollar net worth?

“Not if you put your trust in your broker,” Florin (Hulk’s lawyer) said.

“This isn’t a personal responsibility case,” Florin said. “This is a professional responsibility case.”

 Every agency consultant, including those at the Hales event, extols the virtues of independent agents and brokers differentiating themselves in a tough market by becoming more professional and consultative. Unfortunately, as the Hulk case demonstrates, that professionalism can be a double-edged sword. If you’ve cut corners to survive the soft market and the recession, that frugality could come back to haunt you if you’re not covering all the bases with your agency services.

 As the industry continues to evolve in sophistication, don’t be surprised if you start seeing more of these types of cases.

And it would be really cool if they could be settled with a cage match.

And now, more unexpected fallout from the recession: senior citizen entrepreneurs.

If you’re not already seeing a demographic shift in the makeup of your small business clients, you probably will soon. A recent study by the Kauffman Foundation, a private organization which tracks entrepreneurism, indicates that to 24-to-34 age bracket of entrepreneurs behind start-up companies, which ruled during the dot.com boom, now has the lowest rate, surpassed by entrepreneurs age 55 to 64, whose start-ups increased 36 percent in 2008. In total, more than 80 percent of all startups were by people over 40 years of age.

This shouldn’t come as a surprise: older workers have been disproportionately affected by the brutal layoffs of recent years, and many close to retirement age have had their portfolios decimated by hard times — their age precludes them from getting another traditional job, and they and can’t afford to retire (just think of all those “consultants” out there).

But societal shifts could also be responsible: today’s middle-aged and older population is healthier and more active, and many are intent on “living the dream” with second or third careers instead of slowly driving Cadillacs in Boca. Many have worked their entire careers making money for someone else, and want to work for themselves for a change while they’re still able to.

The lesson for insurance agents and brokers is that this is just another page in an unfolding saga of how the American workplace is changing. Everyone in our industry is aware of the importance of understanding the Gen Y customer and employee; now it turns out that Gen Y is only part of the equation.

In my recent blog about the multigenerational household, we discussed how the new economic realities are bringing back the days when Mom, Dad and the kids live under the same roof as Grandpa, Grandma, and other members of an extended family. The new configuration creates new risks for the family unit, and new opportunities for agents and brokers who serve them.

Similarly, start-up businesses headed by older entrepreneurs face a unique set of challenges, especially at a time when business loans are hard to come by and employee benefits are in a state of flux.

Are you prepared to serve these new businesses — or even start one yourself instead of retiring?

It’s a growing reality that many of you may be personally familiar with: the return of the multigenerational home. And it’s also an opportunity for insurance agents.

According to a recent Pew Report as reported in the Washington Post:

The number of people living with several generations under one roof in the United States is at its highest point in 50 years, as families cope with ruinous job losses and foreclosures…

During the first year of the recession, the number of Americans living in such multi-generational families rose by 2.6 million, or more than 5 percent, from 2007 to 2008.

Now 49 million Americans — 16.1 percent of the population — live in homes with multiple generations. Many include adult children in their 20s…

Young adults are less likely to be married than they once were. The typical age of first marriage is five years later than it was in 1970 — 28 for men and 26 for women…

In a tough job market, many still live with their parents. Pew’sanalysis showed that 37 percent of 18-to-29-year-olds in 2009 were either out of the workforce or unemployed, a nearly four-decade high. The figure includes some college students.

According to the report, the multigenerational trend has been growing since the 1980s, in part because of the economy, but also because multigenerational homes are common for many ethnic groups.

It certainly wasn’t weird for my family. My parents were married right after World War II, and due to the lack of jobs and housing, went to live with my Italian grandmother in her two-flat on Paulina Street in Chicago. Turnaround is fair play: when my parents moved to the suburbs, Grandma came with and lived with us for many years. At one point, so did my Uncle Jimmy and my cousin Millie. It was pretty fun having a childhood in what amounted to a boarding house. Likewise, after I married and had kids, and my mother died, my father came to live with us. 

But the recession is what’s really driving the current trend. One of my best friends currently has her late-20s son, his wife, and two toddlers living with her and her husband. Other households include unmarried, recently graduated children in their early 20s who can’t find jobs.

For independent insurance agents, this trend is just another way to solidify your relationship with your customers. With so many of you now writing personal lines coverage — or doing so to round out a favored commercial client — it pays to ask some probing questions come renewal time.

Things to think about:

• How many additional drivers are on the client’s auto policy?
• With more people living in the home — including the elderly and small children — should the customer increase his/her homeowners’ liability limits?
• Is anyone living in the household running an at-home business (child care, consulting, etc.)? What additional insurance coverages are needed to protect the homeowner and the consultant?
• Is the home being used for the storage of additional property, such as furniture, cars, or “toys” like boats and motorcycles? Is additional coverage needed to protect these items?
• Is everyone in the household covered under some form of health insurance? If not, can you advise them about changes in the healthcare law that will make coverage available to them? And for now, are there options available to them under COBRA or other sources?

The creative agent/broker can come up with many more.

What are your customers telling you about changed conditions in their living situations? And what other coverage questions come up in relation to a multigenerational household?

If you watched President Obama’s State of the Union speech last night, you’ll know that although priorities may have shifted, he still supports both healthcare and financial services reform — the most recent permutation of which includes the elimination of insurers’ antitrust exemption. Unfortunately, to politicians and people in general, ”insurance,” “health insurance” and “financial services” are three dirty words that mean the same thing: bilking the public.

You might say that ever since the 1999 Gramm-Leach-Bliley Act,  banks seem to have gotten the better end of the association with insurance.  And a study released this week suggests that banks are banking on insurance — specifically, agents and brokers — more than ever. A recent report by Michael White Associates LLC shows that insurance brokerage fee income for more than 7,000 savings banks and bank holding companies hit $3.05 billion in third-quarter 2009, a 11.7% increase over last year and the highest level in the last five quarters.  These fees include commissions and other fees earned from selling insurance products, as well as referrals for credit, life, health, property-casualty and title insurance.

The top 3 gainers for brokerage fees in the first three quarters of 2009 were:

1. Wells Fargo & Co., $1.38 billion, up 5.34% from the first nine months of 2008
2. Citigroup Inc., $771 million, down 19.27% from the year-ago period
3. BB&T Corp., $699.9 million, 11.8% gain from the year-ago period.

“Not that there’s anything wrong with that,” to paraphrase Seinfeld. We’ve interviewed many agents whose businesses are affiliated with banks, and most seem very happy with the arrangement. But in the course of the last year or so, as “financial services” has become synonymous with shaft, trickery and deceit, maybe it isn’t such a good thing to be lumped into that category.

Just this week, PCI CEO David Sampson warned attendees at the group’s annual executive roundtable that property-casualty insurance could very well get caught up in the “wave of political populism” that’s crashing down on banks, health insurers and other financial services institutions. So far, agents’ enviable position as trusted advisors to their customers has helped them dodge that wave. Let’s hope it’s a position we can retain through the rough times ahead.

With all due respect, I think the researchers at Careercast.com must be, as the Brits say, “having us on.”

That’s the only conclusion I can come to after looking at their much-touted “Best Jobs for 2010” list, just up on their Web site.

Not so much that they rank the job of insurance actuary as No. 1. After all, the rankings are based on a combination of “environment, income, outlook, stress and physical demands.” The fact that actuaries make good money, wear nice suits and sit at a desk would obviously rank the profession higher on the list than, say, anything seen on the “Dirty Jobs” show.

Nor do I take much umbrage over most of the other top 10 jobs, including the predictable computer software designer and analyst, accountant (they’re in demand in all economies) and dental hygenist (although I beg to differ with the “stress” element of that job — when my son was young he once threw up on one).

But guess what: ”Insurance agent” came in at an unenviable No. 103, right between “telephone installer/repairer” and “artist (fine art).” While the job of insurance agent might well include elements of both those jobs, I find it hard to believe that the job outlook for insurance agents is only one step above that of an aspiring paint-flinger. (It’s gotta be the stress level: 63.322 compared with 51.994 for artistes.)

Another position that handed me a laugh was that of “publication editor” (in the immortal words of Bozo the Clown, “Hey, that’s me! Wha-ha-ha-ha!”). Ink-stained wretches actually beat out insurance agents for job viability, coming in at No. 65. And although the fine print did concede that the hiring outlook for editors was “very poor,” this relatively high ranking completely ignores the fact that more U.S. print publications went down the tubes in the last two years than in the history of publishing.

I also had to laugh at other job entries that beat out insurance agents on the list — including “historian” at No. 5 (hey, all you business school students — ditch the MBA and start focusing on the Punic Wars!), “author” at No. 74 (riiiiight…), “janitor” at No. 83 and “bookbinder” at No. 91. Although ballerinas, astronauts, cowboys and pretty-pretty princesses didn’t make the cut, this list suggests that even your wildest kindergarten career fantasy would have been a better choice than what you’re doing now.

Still, you can take some comfort in the fact that you’re not in the career that came in No. 200: “roustabout.” No, not in the circus, but on oil rigs. Careercast.com describes it as a job with good earning potential, but with long hours, dirty and dangerous working conditions, isolation and high stress. Oh, wait…sound familiar?

When the countdown ends on 2009, it also brings an end to the first decade of the new millennium. It’s hard to believe how much our world has changed in those 10 short years, from global terrorism (still happening) to the financial meltdown to the ascendancy of the Internet. Let’s look at just a few:

Everything tech. Yes, the Internet was around at the turn of the century, but it wasn’t as ubiquitous as it is now. Since then, a whole generation has grown up with this technology, and that generation is our future employees and customers. While all this has made our lives a lot easier, it’s also phased out a lot of what we were confortable with and raised the bar on customer expectations. A mixed blessing, to say the least.

A world of new risks. The world is smaller, and the risks you underwrite are not like anything that’s been insured before. Acts of terrorism, environmental exposures, professional liability related to new technology standards and expectations — they’re all in the mix, with new risks coming at us every day. The challenge for our industry will be to keep one step ahead of anything new that comes along.

A bigger, smaller agency universe. The agency/brokerage M&A boom may have slowed to a trickle, but the activity of the past 10 years has altered the landscape forever. Big brokerages have gotten bigger by increasingly targeting the midmarket customers that have long been the bread and butter of the average agency. Conversely, the latest IIABA Agency Universe numbers suggest that smaller, startup agencies are on the rise, thanks in large part to the availability of sophisticated automation systems that allow them to compete with bigger players.

More eyes on the industry. Public/political scrutiny of the insurance industry is nothing new, but the seismic financial upheavals of the past 10 years — from the Enron fiasco in 2002 to last year’s subprime mortgage meltdown and AIG bailout and current healthcare debate — have put this most risk-averse industry in the spotlight more than ever before.

And while nobody can predict what the next 10 years will bring, it’s a safe bet that the trends we saw begin at the dawn of the century will continue to play a significant role going forward. And while 2009 was a good year in that we dodged a lot of bullets — from natural disasters to truly bad legislation — it’s inevitable that we’ll stand to take a hit from these and other problems in the future.

What were your biggest concerns in 2009, and what do you predict will dominate the headlines in 2010?

Businesses give plenty of lip service to ethics, but you have to wonder how many really take it seriously. Corporations are awash in sensitivity training, sexual harassment prevention workshops and other endless efforts to promote ethics. Yet many of these same businesses have also contributed to the financial mess we’re in today — by promoting salary and bonus policies that emphasize profit over common sense.

The issue of ethics, or lack thereof, is exacerbated in tough economic times. It’s no surprise that insurance fraud is up across the board for the first half of 2009, according to the NICB, or that crimes like burglaries and break-ins are on the rise in even the safest communities.  I currently serve on the national ethics committee of the American Society of Business Publication Editors (ASBPE), where the convergence of print and online content have blurred the line between editorial and advertisement – at a crucial time when advertising dollars are growing ever scarcer. When businesses are fighting for survival, the concept of ethics can seem like a quaint anachronism from a more profitable past.

Ironically, as times get tougher, ethics become more important — or should.  AA&B ran a “Last Word” editorial in April by a programs insurance broker who blamed the seemingly endless soft market for the cutthroat competition that was trumping professionalism and in-depth customer knowledge. She complained that unethical newcomers were passing themselves off as experts and using discount rates to entice formerly loyal clients, who, financially squeezed themselves, were seduced by cheaper premiums. Think of the E&O claims that await an agent or broker who doesn’t really understand a client’s risk!

On a larger scale, the lack of ethics in the financial services industry has not only put us into a global recession, but now has the Feds breathing down the industry’s neck for tighter regulation. Based on the industry’s past irresponsibility, this should neither be surprising nor unwarranted.

That’s why the CPCU Society‘s recent unveiling of “A Guide to Organizational Ethics Policy” couldn’t come at a better time.  The Society’s ethics committee collected 75 ethical codes of conduct from different insurance organizations and compiled a list of 12 steps an insurance business can take to ensure it is operating ethically.

Not surprisingly, the first and most impotant step is to “create an ethical mission of the organization,” a single sentence that broadly describes the organization’s goal. Sample statements include “Treat customers, vendors, employees, owners and regulators as we would wish to be treated,” or “Place the interests of those with whom we have business relationships above our own interests.” The other 11 steps boil down to communicating and enforcing this statement.

Does your agency have an ethics policy? Tell us about it, and why it was adopted.

Twitter and the blogosphere were ablaze this week with the buzz surrounding an Accenture study that found three-quarters of U.S. consumers prefer to buy insurance products through agents and other trusted sources rather than online.

The study of more than a thousand Americans at least 18 years old who own one or more insurance products showed that 73 percent preferred to buy auto and home insurance products from an agent, and 75 percent preferred to buy life products from an agent or trusted source, such as an employer or financial advisor. (The exception is “younger and more affluent” customers, who preferred to buy products over the Web: 39 percent of consumers aged 18 to 24 and 28 percent of buyers with incomes above $60,000 said they preferred online purchases, especially for auto and home products.)

This is a bit of welcome news for independent agents, especially the smaller Main Street guys who are struggling right along with their customers in this tough economy. Am I surprised? Not really, considering that some of the biggest players in the business world are the doing the worst right now.

For years, smaller agents have been bludgeoned with predictions that they’re headed the way of the dinosaur. Ironically, these are the types of businesses that are poised to succeed in the worst economy in decades, probably because they’ve always practiced the ”doing more with less” philosophy that big corporations have just recently been forced to adopt.

The National Federation of Independent Business’s index of small business optimism hit 86.6 last month, breaking a 4-month pattern of declines. And the American Express Open small business monitor of firms with fewer than 100 employees shows that 77 percent think that managing their firms over the last several hard months has made them better at managing their businesses in general.

NPR recently aired a segment on how half the current home foreclosures could be avoided through loan modification. Banks take a massive hit on foreclosed property, so it’s in their best interest to work with troubled mortgage holders to keep them in their homes. Yet amazingly, megabanks like Wells Fargo and Citibank are literally ”not set up” to deal with the problem, even though they saw it coming ages ago–and the bigger the bank, the bigger the problem.

It got me to thinking that the bailout mantra of “too big to fail” could have just as well been applied to the dinosaurs.

Small is beautiful!