Time for New Image for Insurance, Agent Says : Sales: The system needs to change so more policies can be sold and maintained long term, according to a man who sold $1-billion worth.

Jon Baker helped finance a major Hollywood movie and hosted Princess Di, but he admits that there isn’t much glamour in his job title--insurance salesman.

“When it comes to a life insurance salesman and a used car salesman, a lot of people say, ‘I’d rather affiliate with a used-car salesman.’ So would I,” Baker said. “The industry breeds mediocrity.”

If it sounds as if Baker is trying to shake up the insurance business and remove its stigma as a boring profession that attracts greedy loafers, you’re right. He said the system needs to change so agents will sell more policies and maintain them over a long time.

It’s part of a formula that led Baker and his former partner, John Lander, to sell $1 billion worth of insurance in 1988.

“There is no magic dust,” said Baker, 47.

He started in the insurance business in 1970, working for Mutual of New York, but four years later he formed the partnership with Lander.

The two brought to this venture an assembly-line system for soliciting and meeting customers, planning policies, closing deals and collecting referrals all at once, using differing workers.

But Baker also had interests elsewhere.

In 1978, he got Lander to join him in providing financial backing for the motion picture “The Buddy Holly Story.”

While the movie received three Academy Award nominations, including one for best actor for Gary Busey, and won the award for best sound track, Baker said the venture turned out to be a financial nightmare.

“The picture went way over budget,” he said. “I was in constant warfare with the producer group. I’m surprised we ever got it in the can.”

The National Independent Theater Exhibitor sued Columbia Pictures over the distribution rights, but the case was dismissed. Yet the movie is still the source of litigation. Baker claims Columbia hasn’t fully paid him.

“Minnows who want to get into the water with sharks and piranhas get eaten alive,” he said.

Baker admits his outside interests strained the partnership with Lander.

The breaking point came in early 1989, when Baker turned his attention to the Royal Academy of Music in England. The year before, he had become chairman of a newly created foundation that would provide scholarships for Americans wishing to study at the academy.

In the fall of 1988, Baker was invited to London to meet with Princess Diana, who served as president of the academy. He then planned a reception for her in New York in February, 1989.

“All of December, January and February, I was consumed in this,” he said. “John (Lander) didn’t like it. His motivations were different.”

Lander was more focused on the insurance business, and so the two parted, each forming his own company.

Baker’s career in life insurance hasn’t always gone well. When Congress eliminated a tax break for corporate-owned life insurance in 1986, Baker estimates, his firm lost more than $3 million.

“Effectively, we went out of business,” he said.

But Baker and Lander rebuilt their company, looking for new avenues to sell insurance.

One fruitful idea has been to market insurance policies as a way for businesses to stem the rising cost of health coverage. Under this system, a company buys insurance on its workers, and when an employee dies, the benefits are used to help cover the company’s medical costs.

Baker acknowledges this scheme is a bit “ghoulish,” but says insurance salesmen need to find creative ways to sell their product.

“This industry is so screwed up,” said Baker, who now oversees 18 people in his office in Wellesley, a Boston suburb. “There’s an opportunity for those who know what they’re doing to generate an unlimited amount of production and revenue.”

In 1988, Baker said, this production generated $20 million worth of premiums for the two partners, which translated to $1 billion worth of insurance. Industry experts consider that a major achievement.

Baker has actively sought a high-profile image in the insurance business, which is heavily concentrated in the Northeast. At a recent conference of Boston-area life insurance sales representatives, he proposed lowering commissions for the first year, then raising them in following years while the policy remains in effect.

That move would encourage people to make more sales and keep the policies from lapsing, he said.

“His view is from the standpoint of a very comfortable agent,” said Jack Bobo, executive vice president of the National Assn. of Life Underwriters. Agents receive large first-year commissions because selling a policy requires a lot of planning with the customer.

“If they cannot be rewarded, the experience is that the planning doesn’t get done,” he said. Also, a cut in commissions could push agents out of the business.

But Baker said that’s exactly what the insurance industry needs.

“Failing and marginal producers,” he said, “must be terminated.”