Insurance Agent Turnover Rate

In January 2012, I had been a recruiter for six years and recruited close to a thousand insurance agents and went to work directly with one of the Senior Vice Presidents who hired me as his team’s Business Development Manager for the insurance company that I had been recruiting for in order to coach his recruiters on how they could attract and retain more qualified and quality candidates to their team. 

My first assignment was to fly to Arizona to work with the recruiting team.  I was flying out of DFW to PHX and had my whole week planned out as to how I was going to change the recruiting landscape of the SW Territory!  When I got through TSA Security, the first thing that happened was my shoes and belt went back on.  It took about 2 minutes for me put everything together again after getting done with this process at both ends… Suddenly I hear a familiar voice “hey Ron Jones, is that you?!”  As I look up, I see Perry.  Perry was an agent that I had recruited a couple of years earlier.  Here was a guy that had such potential.  What happened?  How did he go from being an insurance agent with a tremendous amount of talent and ability, to now working at the airport looking at people’s personal items through a scanner as a TSA security employee?!

As I thought about the encounter with Perry over and over in my head all the way to Arizona, I had to wonder…What are the problems regarding the lack of retention and is there a solution?  These questions have become my mission since that morning.

The insurance industry is not for the faint-hearted. According to the Bureau of Labor Statistics (BLS), more than 90% of new agents quit within a year and up to 95% within five years in business!

Recruiters are always looking for the best and the brightest in the insurance industry. But what happens when your recruit quits within the first year? Or worse yet, within the first 90 days!  Whose fault is it anyway? Is it the recruiter’s fault for not finding the right person, or is it the recruit’s fault for not doing whatever it takes to make it in the business? Let’s explore this issue and see if we can come to a consensus.

Insurance is a business with high turnover. Sales agents can’t always afford the time and energy it takes to stay in this industry, as they often find themselves working for less than what other businesses would pay even if no commission was involved—and without any benefits! 

To make matters worse: Being classified as an “independent contractor” rather than staff members means that putting forth 40+ hours per week will yield nothing more than an empty bank account come payday unless they sell enough policies over those two weeks (or months).

Agents must deal with a lot of things that would make most people want to give up. The grind for insurance sales is tough and finding prospects can be difficult even when harnessing the power of modern technology like LinkedIn or Facebook. Agents who are given plenty of leads by their manager often earn lower commissions than what they were promised when they were sold on the idea that the insurance industry was going to change their lifestyle like they were going to be on YouTube next week showing off their new Ferrari!  But the reality is, the insurance industry is a tough business and don’t expect an easy ride!  Rejection is a huge part of the job, and a new agent must embrace it if they want success. Many leads hang up or shut the door before even beginning their pitch–so don’t get rejection under your skin!

Is there a positive side to getting into the insurance industry?

Why should you choose to work in this industry over others? The answer is simple. You will enjoy a number of benefits that are difficult or impossible elsewhere!

Benefit #1:  All Aboard!

The insurance business is a dream for the right candidates. The first step in that process? Simply becoming an agent! No educational requirements beyond high school in most cases.  Most states just require you take a licensing course and pass their test, and there you have it, you are in business!  It sounds like something out of science fiction: You can become part-time space pirate or full-blown CEO with only two years’ work…but all aboard here because it really does come with very little cost apart from time spent studying.

Benefit #2:  Sourcing!

With a proven system, sourcing candidates looking for a new career or already have their license but not active (or successful) in the industry because they were recruited by the masses, put through the classes, then dropped on their…. (Well, you know what I mean.) It is a must to have a proven system that sources the highest and most qualified candidates to keep your calendar full.

Benefit #3:  The Money!

The insurance industry is a great place to make some money. An agent can get up-front commissions that pay out 100% or more of your policy’s premium, so long as you sell enough policies in one year!  It’s easy to see how insurance can be one of the most lucrative businesses in the world. The typical first-year commission for an auto policy is around 10% – 15%. With life insurance your uplift could pay 100% or more on premiums which means that if you sell one policy paying $100 per month ($1200 total), then during his/her first 12 months as well will make an extra 1200 dollars from commissions alone!

Benefit #4:  The Gift That Keeps on Giving!

Insurance agents have the potential to make passive income through commissions on policies they sell. In addition, Insurances provide paid renewal commissions if your clients keep their plan intact and continue to keep their plan in place after the initial purchase.

Imagine if you could get paid to sleep! This is the promise of whole life policies. They’re designed for people who live long lives, so they pay off in commissions when their policy holder reaches retirement age – usually around 90 or more years old (and sometimes even higher). You’ll earn 5% on your investments each month while living off passive income without ever having gotten up from bed yourself…

Many of those who have been in the industry 20 years or more can make a comfortable living without ever having to sell any new policies.

With all of the benefits, why do 95% of agents that get into the insurance industry tap out?

Do You Have an Effective Onboarding and Training System in Place?

1. What is the onboarding process for new insurance agents at your company like?

2. How does training work for new insurance agents – what topics are covered, and how long does it take to complete the training program?

3. What type of support do new insurance agents receive after they’ve been recruited and have started working with customers – is there a mentor program or other type of support system in place?”

4. Do you have any tips or advice on how to be successful as a new insurance agent in this industry?”

5. How do you see the role of insurance agents changing in the coming years, and what steps is your company taking to prepare for these changes?”

What Does Your Continued Development Look Like for Your Agents (New and Veteran)?

Do you have a new agent success system, a system that will equip them with the skills to meet and exceed their goals, with a combination of daily mentoring and coaching; learning from top agents on how they’ve achieved what seems like magic at times utilizing a sales university (sales training), along with practice drills that rehearse every aspect in order for it to all come together when needed most!? 

Keeping Your New Agents Motivated? 

Setting goals for your new agents is crucial in helping them achieve personal and professional growth. This can be done through daily sales meetings that address their attitude, mindset, an emotional well-being as it pertains to their new career in the insurance business.

Maintaining an upbeat tone with positive affirmations can help them succeed!

Does Your New Agent Have a Proven Sales Process?

The perfect sales system for any agent is one that teaches them how to greet the customer, find out what they want and need from in a policy/plan to give a successful presentation. It should also teach the new agent techniques on handling objections with ease as well as follow up after the sale or introduction of new leads in their pipeline so it’s never too late!

So, what is the answer:  Is it The Recruiter or The New Agent?

The New Agent:

Becoming a successful insurance agent is not easy, but it can be very rewarding. Those who are able to make it through the tough early years and develop a large book of business will be able to enjoy a high degree of financial security in retirement, however, are they willing to put in the hard work necessary to achieve this level of success? 

The Recruiter:

Every business manager/owner should be focused on setting their team up for success. This means having a system in place to source the best candidates, onboard and train them effectively, provide daily support and motivation, and have an effective sales system in place. If your organization is not 100% dialed in on these areas, we need to talk. Let our experts help you create a plan that maximizes your new recruits’ potential and sets your business up for continued success. Click the button below for a free consultation to get started.