What are the chances of new insurance agent success becoming a reality? Intense analysis of licensed Department Insurance agents records conclude that only 6% of agents survive slightly over 4.3 years. Examine the facts, and logical explanations why insurance sales agent retention and success stories are so grim.
Dismiss many of the misconceptions of recruiting new insurance agents. There are over 1,500,000 health and life insurance agents currently licensed by insurance departments within the United States In my evaluation, this means an unnecessary surplus of over a half million agents. Countless new life and health insurance sales agents are either poorly trained, have an insufficient number of prospective clients, or should have never been hired to begin with. So if 550,000 agent trainees were fired today, the life and health insurance agent system would be stronger.
Some agencies place newspaper ads, and others go so far as using college campus job fair recruiting methods to find new agents to hire. Both of these methods when analyzed, show almost identical results. Those results are that 85% of agents will starve their way out of insurance sales within the first 18 months. In insurance sales you have two types of agents, those who can fill out an order application and those that can actually solicit and sell life and health insurance products.
Here lies at least 50% of the blame for agents dropping like flies. The recruiters hire agents who are unable to go out on their own and make a sale.. Even though almost every applicant can pass an interview of prepared interviewer questions, this in itself does not guarantee any measure of success. Look at the person who the insurance agency promoted to do prospective hiring. In most cases this is a newly appointed sales manager with under 4 years experience. Sure, he is fairly good at selling, but just because he can sell, it does not mean he can successfully recruit. Both the sales manager and college campus recruiter work hard to highly pump the prospective agent up with inflated dream visions of easy success and a lifetime steady insurance career.
Another 25% of non survival is a result of insurance agent recruiters for providing false concepts, and poor training. New licensed sales agents anticipate easily obtaining incomes exceeding $40,000 to $70,000. My studies show less than 7% of these rookies ever obtain that level. In fact, if most insurance agencies did not money subsidize their newer agents, the income figure for a new insurance agent would be under $20,000. When one agent leaves, another will be quickly licensed to take his place. The departing rookie has written policies on a few friends, neighbors, and outsiders, so when these policies renew. the insurance company collects all the premiums without paying any acquisition costs. I call this concept putting meat in the insurance company freezer.
Job fair recruiters sent to college campuses usually do the worst job. The college recruiter pitches a memorized and rehearsed script to college seniors, exalting how entering the insurance professional is more prosperous than other qualified fields. Remember the college recruiter usually gets a bonus for each recruit. If the prospective agent would had been screened with numerous background questions, survival chances could have been quickly predetermined.
How do you predetermine a success chance factor? Well first realize the agent might already be financially in debt, and hanging on to survive, living from paycheck to paycheck. You must start with agents that possess sales ability and are self determined to quickly become financially strong enough to survive. This is fine if the new college grad comes from a wealthy family background. However, in today’s world, most college graduates are not in this category. Their background is often middle class, with parents living in a middle class neighborhood, earning a middle class income. The new college grad, now an insurance agent, often took out student aid loans. These need to be paid back so this agent requires a higher income just to survive.
Why are the odds so highly against this agent? The career agency is usually located in an swank, suburban area of a major city where the average mean family incomes are the highest. in the state. The targeted customer for these agencies are high income individuals and small successful businesses. 90% of the limited training is spent on target marketing to these prime clients exclusively. The large agency however only contains a few experienced insurance professionals earning over $70,000 a year.
During the first 4 years of almost any salesperson’s career there is an existing comfort zone almost impossible to break. In other words, the salesperson is most comfortable talking to and attempting to sell prospective clients in an environment or income level that matches the agent. The career insurance agency however wants big premiums, and tries to train career insurance agents to sell large policies to prominent people. Upon failure to make sales, the blame comes down to the agent for not trying or working hard enough. The agency should have started working a new agent on a $40,000 class of clientele while gradually raising the level. A career agent then is able to work upwards. The reward is being one of the few 6 out of a hundred insurance sellers surviving the first 4 years.