Why Insurance Agents Fail: What Not To Do as an Independent Insurance Agent (2024)

FAQs

Why do so many insurance agents fail? ›

The most commonly cited reason insurance agents fail is that they fail to listen to their customers and take the time to find the best product to suit their needs. Agents who bring the right solutions to customers build trust, and that helps them build a book of loyal customers.

This is especially true for insurance agents and producers. Sadly, the insurance industry seems to be starving for new talent. Young people, relatively speaking, aren't flocking to become insurance agents. For those that do take on the challenge, around 90% or so (depending on which report you read) fail.

Captive insurance agents work for a single insurance company, while independent agents sell policies from multiple carriers. They both sell policies to small business owners to help protect them against specific risks (like fire, theft, or data breaches).

They must be able to communicate with others easily without using technical terms or insurance jargon that could mislead clients. Agents must have the ability to listen and empathize with clients to understand what they need and want. On top of all these skills, good agents must put the needs of the client first.

Climate change, ESG responsibilities and cyber risks are just some of the key concerns facing the insurance market in 2023, the latest Annual Insurance Review from international law firm RPC has revealed.

Unpacking the insurance giant's collapse during the 2008 financial crisis. The collapse and near-failure of insurance giant American International Group (AIG) was a major moment in the recent financial crisis. AIG, a global company with about $1 trillion in assets prior to the crisis, lost $99.2 billion in 2008.

Lack of Confidence

Any contract between an Insurer and the Insured is a commitment of utmost good faith and as such requires honesty and trust from both parties. For this to happen successfully, the insurance companies must first win the trust and confidence of the insuring public.

However, it is not an easy job. You can expect a high rate of customer rejection, stress, and attrition rate. Still, all good insurance agents share some of the following skills and knowledge, plus core qualities in one way or another.

For example Independent Agent jobs pay as much as $17,612 (19.6%) more than the average Independent Insurance Sales Agent salary of $89,745.

What is a characteristic of an independent agent? ›

Independent agents receive commissions for the policies that they sell and are not considered employees of any specific insurance company. An independent agent may be contrasted with a captive agent, who can only sell the products of the company they work for.

Independent agents work with a variety of insurance companies to get you the best coverage at the lowest prices. An independent insurance agent has access to many markets to provide you with the policies you need. This access to choices can mean lower rates, less restrictive policies, and better coverage.

Most experts agree that life, health, long-term disability, and auto insurance are the four types of insurance you must have.

Research shows that inflation , digital transformation and climate change stands out as the top 3 of the biggest challenges of the Insurance industry in 2023. Inflation was named as the top challenge for 2023 by more than one-third of insurance sector insiders, according to a survey.

What insurance company has the most complaints? The auto insurance company with the most complaints is United Automobile Insurance, which receives roughly 40 times more complaints than the average insurer its size, according to the latest NAIC complaint index.

The study identified work-life balance and family life, as well as mental stress, as the most recurring themes in reasons for leaving the insurance industry.

In fact, insurance and financial professionals in the Paychex poll indicated that they experience an average of 3.23 days of stress per week, with middle and upper management and owner roles having the highest level of stress.

Who is the richest insurance company? ›

Berkshire Hathaway was the largest insurance company in the United States in 2021, with total assets amounting to almost 960 billion U.S. dollars. Prudential Financial and Metlife secured second and third place, respectively.

Athene (brand value up 128% to $2.6 billion) is the fastest growing insurance brand. In January 2022, Athene merged with Apollo Global Management, Inc., now operating as a subsidiary of Apollo.

Process Errors

Whether by accident or intentionally, medical billing and coding errors are common reasons that claims are rejected or denied. Information may be incorrect, incomplete or missing. You will need to check your billing statement and EOB very carefully.

Is It Possible To Become A Millionaire Selling Insurance? A big yes. But like any other job, it takes time to be good at what you do and attain such income levels. Top agents earn anywhere between $100,000 to one million dollars.

Even with inflation, “6 Figure Incomes” are still a milestone for many insurance agents. Similarly, making it into the “1%” of earners is also a goal of many brokers. Let's take a look at both of these milestones and how they relate to success today.

It is not easy to make a living in insurance, but it is not as hard as you might think. As with any type of sales, becoming an insurance agent can be one of the best paying hard jobs or a terrible paying easy job. Dedicated agents will become successful at insurance sales, just like at any other job.

As an insurance agent, you may think that being an introvert is a disadvantage when it comes to selling insurance. However, being introverted can be an advantage in this industry, as introverts often excel at building deep relationships and listening to the needs of clients.

What is one advantage of using an independent insurance agent? ›

Advantages of an Independent Insurance Agent

More options mean lower premiums for you. Independent agents offer unbiased advice. These agents are your one stop shop; they offer a complete line of insurance products. Their staff is qualified and trained to explain coverage in simple terms.

Independent insurance agents typically represent a number of insurance companies, or "carriers", and sell the products that most appropriately meet the needs of their clients. Independent agents typically are very well trained and knowledgeable of the complexities of the insurance market and insurance law.

Another definition: An agent is a computer software system whose main characteristics are situatedness, autonomy, adaptivity, and sociability.

When interviewing insurance advisors, the most suitable candidate will demonstrate a compelling personality with outstanding communication skills, and in-depth knowledge of policies, regulations, and products. Be wary of candidates who lack analytical and interpersonal skills.

In general, there are three types of agents: universal agents, general agents, and special agents.

Insurance Agents are responsible for identifying sales opportunities for insurance plans and overseeing a portfolio of clients.

A captive insurance agent is essentially the opposite of an independent agent. Captive agents work for one specific insurance provider – such as Geico or Allstate – and they can only access policies from that one provider.

Life insurance is a very difficult product to sell. Simply getting your prospect to acknowledge and discuss the fact they are going to die is a hard first step.

How do I meet insurance targets? ›

Emotional intelligence. This includes the ability to listen and empathize with clients on a deeper level in order to discern what they really want and need. A good agent is tactful and knows how to help a client see financial reality clearly, even when the client is dead set against it.

Math. Because insurance relies on many financial principles, it's essential for insurance agents to possess competency with numbers. The ability to make error-free calculations and analyze numerical data about insurance trends can help agents perform their work more effectively.

Failure to work hard is one of the top reasons people in this industry want to call it quits. While it's true that this job isn't easy, it's also true that it can be very rewarding when you allow it to be. As an insurance agent, you have daily opportunities to change your clients' lives for the better.

An insurance agent can find success when they set reasonable expectations, develop a robust support system, and focus on putting their customers' needs above their own. It is estimated that new insurance agents experience a 30% to 50% success rate, with this figure gradually dropping over time.

Insurance Broker/Agent Turnover Trends

Historically, turnover in the finance and insurance sector has teetered around 20%. However, according to Zippia, these sectors have consistently been above the 20% turnover rate year after year since 2016. In 2020, turnover peaked at 25%.

59 years old.

The average age of independent insurance agents is closer to retirement than you may think. Twenty-five percent of insurance agents are expected to retire in the next two years, making room for the younger crowd to move in.

Once you earn your license as an insurance agent, you immediately want to get out there and begin making money. Yet, statistics show though that many new agents don't make it very far. For instance, over 90% of new life insurance agents quit within year one. Many more depart within five years.

Is life insurance the hardest thing to sell? ›

Life insurance is a very difficult product to sell. Simply getting your prospect to acknowledge and discuss the fact they are going to die is a hard first step. When and if you clear that hurdle, your next task is creating urgency so they buy right away.

While there are many kinds of insurance (ranging from auto insurance to health insurance), the most lucrative career in the insurance field is for those selling life insurance.

Insurance Agent salary in India with less than 1 year of experience to 9 years ranges from ₹ 0.2 Lakhs to ₹ 4 Lakhs with an average annual salary of ₹ 2 Lakhs based on 428 latest salaries.

Gideon du Plessis failed in the 10th standard and never went to college. He is today the highest earning insurance agent in the world, with annual commissions amounting to Rs 7 crore (Rs 70 million) plus. A record he has maintained over the last 12-14 years, selling 700 policies yearly.

Bad employee turnover: Bad turnover is when moderate- or high-performing employees are leaving for lateral positions. This means you have a bad work environment or are paying under market value. If your bad turnover rate is more than 15% per year, you should take a close look at your compensation and company culture.

A new Payscale report published on Thursday ranked Massachusetts Mutual Life Insurance Company as having the highest turnover rate out of all of the Fortune 500 companies.