The low pay problem gets compounded with the small insurance agency factor IMO. Decent programmers and ambitious ones out of school might consider taking low paying positions in a dot-com type atmosphere, either with great potential for startup rewards, or surrounded by brilliant engineers with backgrounds top-tier companies. Or a newer programmer might consider low paying jobs for big-name companies, even if it's through a contractor, to get some good experience on their resume.
Doesn't sound like any of those potential payoffs are applicable to you. And learning to make tools for a few insurance agents to sell and manage insurance isn't exciting enough that a bunch of people are going to be lining up to do it.
So without being able to offer any of the non-pay perks of the IT industry, why would someone want to come work for you for far under market rate?