How likely is it that new agents will succeed? A thorough analysis of records of licensed Department Insurance agents has revealed that only 6% survive for more than 4.3 years. Let’s examine the facts and discover why success stories and retention rates for insurance agents are so low.
Many of the myths surrounding recruiting new agents for insurance should be dispelled. The United States has over 1,500,000 licensed life and health insurance agents. In my estimation, this is an excessive surplus of more than a half million agents. Numerous new life and insurance sales agents have been poorly trained, are not able to find enough clients, or were wrongly hired. The life and health insurance agency system would be more robust if 550,000 trainee agents were fired.
Some agencies advertise in the newspaper, while others use college job fairs to recruit new agents. When both methods are analyzed, they produce almost identical results. These results show that almost 85% of agents will quit insurance sales within the first 18 month. There are two types of insurance agents: those who can fill out an application and those who can solicit and sell life or health insurance products.
This is where at least half of the blame lies for agents falling like flies. Agents who cannot go out on their feet and make a sale are hired by recruiters. Although almost all applicants can pass a pre-interviewer question interview, it does not guarantee success. Consider the candidate the insurance agency recommended for potential hiring. This is usually a new sales manager with less than 4 years of experience. He may be a good salesperson, but that does not necessarily mean he will be able to successfully recruit. The college campus recruiter and the sales manager work hard to exaggerate the potential agent’s dreams of success and a steady, long-term career in insurance.
A 25% increase in non-survival is due to insurance agent recruiters who provide false concepts and poor training. Sales agents who are newly licensed expect to easily make incomes of between $40,000 and $70,000. My research shows that less than 7% of these new agents ever reach this level. If most insurance agencies didn’t subsidize their younger agents, the new agent’s income would have been below $20,000. One agent will soon be replaced by another licensed agent. So when the policies are renewed, the departing rookie will have written policies for a few of his friends, neighbors, or other outsiders. The insurance company collects all premiums and does not incur acquisition costs. This concept is known as “putting meat in the freezer” at an insurance company.
Recruiters who are sent to colleges campuses by job fairs often do the worst jobs. College recruiters often present a scripted script to high school seniors. They extol the benefits of becoming an insurance professional. The college recruiter often gets a bonus for every recruit. Survival chances may have been quicker if the potential agent had been thoroughly screened.
How can you predict a success factor? First, you need to realize that the agent may be in financial debt and struggling to make ends meet. Agents who are able to sell and have the determination to become financially stable enough to live on their own must be considered. This is acceptable if the college grad comes with a wealth family. In today’s world, however, many college graduates do not fall into this category. Their family is usually middle-class, with their parents living in middle-class neighborhoods and earning a middle-class income. A lot of student loans were taken out by the new college graduate, who is now an insurance agent. This agent must repay these loans in order to live comfortably.
Why are the odds against this agent so high? The majority of career agencies are located in swank suburbs of major cities where the median family income is the highest. The state. These agencies target high-income individuals and small businesses. 90% of the training goes into targeting these clients. However, the large agency only has a few insurance professionals who earn over $70,000 per year.
It is almost impossible to break the comfort zone established in the initial 4 years of a salesperson’s career. The salesperson feels most comfortable selling potential clients to people who have the same income or environment as them. However, the career insurance agency wants large premiums and trains career agents to sell large policies to well-known people. The agent is blamed for failing to sell enough policies or not working hard enough. It would have been a good idea for the agency to start working with a new agent on a $40,000 clientele and gradually increase the level. The career agent can then work up. Being one of only 6 insurance agents to survive the first four years is a reward.
