I interviewed an experienced insurance agent from a reputed global insurance company who pointed out why many young insurance agents leave their insurance sales job.
The interview aimed to understand the growing attrition problem in the Insurance industry.
Insurance as an industry looks lucrative, but the hard truth is that 90% and above life insurance agents quit in the first year of their job. Most of the ones who stick around leave the industry by year 5.
So, I asked why people are quitting their jobs in this sector. What makes them decide to change their job early in their career and start anew?
She said I would be shocked to know the answer to “Why I quit being an insurance agent” based on the multiple resignations she has seen throughout her career.
From her experience, there are at least 15 reasons why people leave the insurance sales agent job so early in their career. She then continued to explain the reasons in detail.
Since she wanted to remain anonymous, I put myself in her shoes to show you the 15 reasons why she thinks people quit being insurance agents.
One aspiring to be an insurance agent should follow this to get a holistic view of what becoming an insurance agent means and then tread your steps accordingly to succeed.
One common mistake that every aspiring insurance agent makes is to dream of a highly paid, secured job as soon as they get their license.
However, as reality hits them, sanity kicks in, and they realize how hard it is to crack a career in insurance and convert the prospects into sales.
She says, “I thought as soon as I get my license, I will be booking a new house and buying a new car as I will easily make $100,000 a year. But, as soon as I became a licensed Insurance sales agent I got the reality check.”
According to the U.S. Bureau of Labor Statistics data, we get a clear idea of how much an average insurance agent makes in the USA.
According to its latest data of May 2021, an average American insurance agent has a median salary of $49,840.
It further mentions that the lowest 10% earns less than $29,970 while the top 10% earns around $126,510.
According to this data, if I do an industry analysis of the salary of the insurance agents across different verticals till May 2021, I get the following data:
Hence, it is important to set realistic goals, or else it would lead to disappointment regarding job satisfaction and job security, eventually leading to leaving the job.
Most agents enter this field hoping to make it big and, as a result, lose their focus.
The agents become so fixated on making money that they forget the true intent of the job, and when they do that, they are more likely to fail than succeed.
They need to remember that the primary focus of an insurance company is to provide security to the customers.
So, instead of imparting value to the potential customers and providing what they need, they try to push products that might not even meet the client’s requirements, resulting in lower conversions.
Lower conversion means lower commission which translates to lower job satisfaction and is followed up by agents leaving the job.
For any sales job, mastering lead generation is an extremely part. It becomes even more important when it comes to insurance as there is extremely high competition in this domain.
However, life will be extremely difficult if an agent doesn’t focus on getting hold of quality leads as they embark on selling insurance products.
Instead of focusing on converting sales and earning commission, their entire time will be dedicated to cold-calling, which has low conversion rates.
This high rejection rate and the inability to cope with the failure often lead to leaving the job.
Hence, the focus should be on cracking the code to generate good leads, eventually leading to a high conversion rate and great success.
Sales is a tough job, and insurance sales are even tougher. Insurance is a highly competitive industry with many players offering similar or better products at the same or lower price points.
It means that there will be a lot of rejection. Agents face a lot of rejection from clients, just like any other sales executives.
It doesn’t matter if the lead was of good quality, but converting a warm lead to a hot one and then finally to sales means one needs to communicate with the client via cold calls.
Most of the time, customers say NO. But unfortunately, many aren’t cut out for it, and they can’t handle the rejection as they have thin skin.
But the sooner they understand the Mantra that Thick Skin means Stronger Performance, their mental health will improve, and they will perform better. Ones who cannot ultimately lose hope and perish from the insurance industry.
It is very important to be aware of all the technological advancements that revolutionized the insurance industry.
The world, in general, has changed a lot, and people completely rely on digital technologies in every sphere of life.
Age-old ways don’t work nowadays; everything from lead generation to sales, i.e., every point in the sales funnel, has changed dramatically and is completely tech-driven.
Agents unable to use technologies meant to aid them will stay behind those using and leveraging them and ultimately leave the job due to disappointment.
It is another common reason often cited by people as an answer to “Why I quit being an insurance agent.”
Professional mentorship is necessary in every job, especially in the sales domain. The insurance industry is already a complex world where finding a footing as a new agent is difficult.
So, new agents must find a mentor to guide them. Someone willing to impart their knowledge and allow them to make mistakes and ask questions.
It’s not difficult if someone is looking to work hard and learn the ropes of the business.
However, sometimes people are driven by their egos and do not want to appear as not knowing what to do. But, that is their mistake as the experienced agent already knows that the novice is not supposed to know everything.
Hence, most are open to questions about different aspects of the job. Those with an experienced guide to help them focus on the right things succeed, and others leave the industry after facing rejection and continuous failure.
Newly licensed agents think they can make more money by covering all the categories and selling different types of insurance products from each.
They fail to understand that it is not an easy task as each type of insurance, be it life, auto, home, health, etc., has pros and cons.
To understand them, they must thoroughly research their insurance policies, premiums, coverages, legalities, pricing, etc.
They need to understand the entire process of how the company functions from the start to the end.
They need to understand the claims process and how insurance adjusters finally offer the settlement to the claimant in case a claim is filed to offer the client a better product or service.
Each type requires different strategies and sales techniques; everything changes according to the target markets and segments. The buyer persona changes, and the requirement of the potential client change. Even the value proposition of each product changes.
A new agent should take sales training and gain expertise in a specific insurance domain, learn the details and then sell it to customers to gain real-time experience and create a solid client base.
Then only they will get to know the pros and cons and eventually offer better value and service to the customers. It will lead to higher conversion and commission.
Pursuing multiple categories simultaneously is a recipe for disaster as they wouldn’t be able to focus on any of them and won’t understand the nitty-gritty details of each domain.
So, pursue a particular domain, and then once expertise is achieved, move on to the next one, and so on. Otherwise, this will only become another answer to “Why I quit being an insurance agent.”
Marketing 101 teaches customer is king. So, it is paramount that insurance agents learn how to understand their needs for sales success.
If they fail to grasp the needs and requirements of the customer, they will fail to establish a strong bond or relationship with the customers.
It means that even if the customer buys the product or service once, they are unlikely to return for a repeat purchase.
Developing cordial relationships with clients is crucial to become a successful agent and ensure customers return later. That can only happen if the agent understands and delights them by providing value over and above their needs.
For example, if a person has bought home insurance recently and is so delighted that he refers that agent to his other family members or friends, he buys a new home. It can only happen if they feel that the agent has given a valuable service to them.
Customer delighting is an absolute golden strategy for agents, ensuring loyal customers and eventually helping them establish a successful sales career.
Failing to learn can lead to lower conversion and repeat purchases, leading to an unsuccessful career and ultimately contributing to the reasons insurance agents leave their jobs.
Sales is a continuous learning process. Agents need to understand that and to keep themselves updated, it is almost mandatory to grow a strong network. It is a rising problem, especially among independent insurance agents.
One cannot succeed in the world of sales without keeping up with the latest trends or strategies in the industry.
However, if an agent doesn’t connect with anyone, how will he share ideas? How is going to know about what is the latest trend? How does he know what to do when there is an issue?
For example, it is difficult for an independent agent to connect to other agents until and unless they seek to broaden their network by reaching out to other agents or industry experts.
Only having a mentor won’t do. A successful insurance agent needs to be a part of an active network to test strategies, discuss ideas, develop new tactics, gain knowledge about new products, etc., and that can only be done by being part of an extensive network of agents.
A common reason insurance agents fail can be the inability to connect to fellow agents. It means they will be alone and lonely in the industry, which can often become overwhelming, pushing them to leave the job.
“I can’t keep up with the industry trends and that is why I quit being an insurance agent.” – A common answer by agents for leaving their job.
One has to understand that the insurance industry is highly competitive. New companies are cropping up daily with new value propositions aligning with millennials’ needs and requirements.
The insurance products keep changing their offerings, premium, coverages, benefits, etc. One has to keep up with the changing trends so that they can convey the value proposition to the customers.
If an agent thinks they can simply offer an insurance product following the same strategy they did a few years back, they are wrong. Things are changing almost every month.
Agents must keep researching, form a network and learn about the latest trends, changes, and updates in the insurance world to be relevant and successful. Failing to do so will only end in disappointment.
Any new job, especially one where success depends on closing customer deals, is always difficult.
As a new salesman, an insurance agent may feel the brunt of rejection when they try to close sales. Most of them never factor in this aspect of the job, but as reality kicks in, they are often clueless.
Ones who prepare themselves with mentors and networking understand that this is all part of the game and you can’t win every time.
You win some, and you lose some, but you take the learning from each interaction with the client.
Try to take customer feedback and know the reason for not buying the insurance. Ask if they will be interested if they will buy if they can customize the offer to suit their needs or ask what can be improved in general.
It is a continuous learning process where one can’t resist dejection. Don’t get discouraged; try to learn as much as possible on the job; success will follow. However, the ones who give in will most likely leave the job.
Agents are humans at the end of the day, and every human being need someone to support and back them up to make them not feel lonely.
Insurance sales is a demanding job that takes a lot of toll on the body and mind. Hence, if the agents don’t have anyone to share their stories with or talk to someone like a friend, acquaintance, or family member, the weight of isolation eventually creeps in, which often leads to discouragement and disappointment.
It directly affects the job and poor performance and, as a result, can be another striking answer to ” Why I quit being an insurance agent.”
Many Insurance agents quit their jobs because they feel better off doing something else and want to change their careers.
There are instances where they want to pursue higher education or even change the domain completely where they feel they will be more successful.
Sometimes there are personal goals like taking care of the family, joining the family business, starting a new family, or even starting a startup.
Lots of things contribute to changing career paths, and as a result, many leave the job.
A toxic culture of unethical practices exists in the insurance industry, especially agents making false lofty promises that cannot be executed in reality and then again during the claims process where the adjusters try to dupe the clients.
Often, customers have a bad experience with the claims process where the adjuster threatens them.
This leads to them becoming aware and learning ways to tackle these adjusters and agents.
It is bad for generating business, and professional and ethical agents find it difficult to sell their products due to their bad reputation.
As a result, many honest agents are frustrated and often cite this as the most critical answer to “Why I quit being an insurance agent.”
The insurance industry is highly competitive, and as a result, there is a culture of hustling among all agents.
The ones who go overboard and try to close deals by hook and crook are praised over those who try to follow a normal path and often don’t see success like their colleagues.
The company or the senior managers of the insurance business often look down upon these agents who don’t perform.
It is almost expected from all agents to hustle, thereby giving birth to a toxic work culture with no work-life balance.
The breaking point of many agents is the burden of guilt and shame that the company and its management would impose on the agents should they not hustle or perform as per their unrealistic expectations. It is one of the primary reasons for the high attrition rate in the insurance industry.
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The most frequently asked questions are as follows:
The attrition rate is extremely high in the insurance industry, with a 90% burnout rate in the first year and almost 95% when the period is 5 years.
There are many disadvantages to being an insurance agent:
The hardest part of being an insurance agent is to close a sale by understanding the client’s needs. Proper training and experience are needed to gauge the needs and offer products to customers where most agents fail.
The success rate of new insurance agents varies anywhere between 30% to 50% in the first year, and drops to a jaw-dropping 11% by the 3rd year.
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I hope you got your answer to “Why I quit being an Insurance Agent.” As you can witness, sales is a cruel world where one needs to keep up with their peers or else they will perish.
An agent should remember there is a lot of opportunity to learn and earn in the insurance industry. They must master sales techniques and understand the secrets behind building customer relationships.
The only goal should not be to make money. Agents who focus on building themselves by learning about the company, product, and the latest trends while building strong and loyal customer relationships will ultimately win in this highly competitive industry.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial advice. The author’s opinions are their own and should not be taken as a recommendation to invest in any particular product or service. It is strongly advised that you consult a financial advisor before making investment decisions. Investing always carries risk, and it is up to each individual to consider their options and make informed choices carefully.
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