The insurance industry is lucrative, but success is not a given. It's more common for insurance agents to quit or fail in the industry than to succeed.
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. To avoid becoming one of these casualties, it's important to know the problems new agents face and how to avoid them.
Here are 12 of the most common reasons insurance agents quit or fail.
1. They Have Unrealistic Expectations
Too often insurance agents earn their license and think they will immediately begin making over $100,000 annually with ease. The reality is a little different. Breaking into the insurance industry is hard, and unrealistic expectations will set you up for disappointment and failure. According to the U.S. Bureau of Labor Statistics, the 2020 median pay for an insurance agent was $52,180 annually. The lowest 10% of agents made less than $29,000, while those in the top 10% were over $127,840 annually. It's critical to enter the insurance industry with a realistic mindset of what you will accomplish in year one and beyond.
2. They View The Insurance Industry Through The Wrong Lens
How you view your job sets the stage for the outcomes you experience. The goal of an insurance agent should be to help provide value and security for their clients. Instead, too many new insurance agents start with a laser focus on financial gain. If your primary intent as an agent is to make money, you will fail. Clients will realize your end goal is not to help them, but instead to turn their insurance purchase into a profit. When this happens, clients will turn away, and you will end up leaving the industry.
3. They Don't Have The Right Leads
Success as an insurance agent often starts with having the right leads. If you sign on with an insurance agency without access to strong, high-quality leads, you can easily spend all your time cold-calling and getting rejected. Instead, you need high-performing leads right from the start, so you can immediately begin building your book of business.
That way, you can spend your time as a new agent perfecting your sales technique, not chasing leads that don't go anywhere. This can make the difference between early success or an early exit.
4. They Have Thin Skin
No matter how good your leads are as an insurance agent, you will need to reach out and connect with a potential client. A lot of times this will mean a cold call, especially when your agency is not helping you with leads. Many new insurance agents don't realize just how many times they will hear the word “no.” Anyone with experience in sales — even the best salespeople — will explain that rejection is far more common than acceptance. If you've got thin skin, you will not be an insurance agent for long.
5. They Fail To Make Use Of New Technology
Insurance agents need to be able to keep up with current technology. What worked a few years ago may no longer get the same reception from someone trying to buy insurance. The internet, in particular, has changed the way insurance agents function. Technologies out there enable simple blogging, social media networking, search engine optimization, and more. All this technology allows insurance agents to connect, and an inability to use evolving technology will leave you losing out on clients.
6. They Don't Have A Professional Mentor
One way to do well as an insurance agent is to get help and guidance out of the gate. You need a professional mentor to help you navigate the ocean that is the insurance industry. When you begin, find an insurance agent that will allow you to ask questions. The more successful the agent you have as a mentor, the better. The goal isn't to simply emulate them, but rather to learn from the experiences they have had and apply those lessons to your own situation. When you lack a mentor, it's easy to flounder without a support system.
You could also work as an independent insurance agent on the Assurance agent platform. Assurance offers you personalized training, pre-qualified leads, and the freedom to sell wherever and whenever you want.
7. They Try To Sell All Types Of Insurance Immediately
You may think that, as an insurance agent, you can sell any type of insurance policy. So, you start by trying to sell auto, home, life, and more at the same time. But do you know enough about these products and how to sell to potential clients in these areas?
One big mistake that leads insurance agents to quit early is that they try to spread themselves too thin too fast. Focus on one insurance line to start with and get good at selling it. Learn the product, the coverage offerings, how different factors affect premiums, and what clients see as valuable. Once you master one, move on to the next. Trying to do everything at once will lead to failure.
8. They Don't Understand Customer Needs
To be a successful insurance agent, you need to build long-lasting relationships with clients. If a client goes out and buys a new vehicle, you want to be the person they call to get that car set up with an auto insurance policy. That call doesn't happen without an already existing relationship.
To build the relationship, you need to understand customer needs. If you're focused only on the sale and not the needs of the customer, you're likely to miss out on a lot of opportunities. You want to go above and beyond with your customer — know their needs and exceed their expectations. Amazing customer service is built on long-lasting relationships. Without them, you may find your career as an agent is short-lived.
9. They Fail to Network
Relationships in the insurance business extend beyond just your clients. Successful agents also know how to network with other insurance agents. This is about more than having a single mentor. When you network with other insurance agents, you can share tips, strategies, experiences, and more. It's easier to stay up to date with industry trends when you have a reliable network and fellow agents with whom you can share ideas. Those who do not practice networking will find themselves isolated and will likely fail to take their role as insurance agents to the next level.
10. They Don't Keep Up with Industry Trends
The insurance industry is changing rapidly. If you fail to keep up with industry trends, you'll quickly fall behind. To succeed in insurance, agents have to be committed to knowing the industry. It must go beyond just being a “job” and instead needs to be in some sense what you are. When you know insurance, you continue to learn more over time, understand changes as they come, and adapt your sales strategy accordingly. It's critical that you keep up with industry trends to be successful as an agent.
11. They Too Easily Give in to Discouragement
It's easy to feel discouraged as a new insurance agent. Say you fail to close a deal with a client in your first week or even your first month. What does that mean for your future? You may start asking yourself if you made a mistake with this career, if you are any good as an insurance agent, or similar questions. It's far too easy to give in to these emotions, but those who do may quit too soon.
12. They Don't Have the Right Support System
Every insurance agent needs a support system. You need someone or a group of people who support what you are doing, are there to answer the phone to hear stories about your day and help pick you up. This could be colleagues, friends, family, and so on. When you don't have a support system, you may not get the help and guidance you need to persevere.
The Bottom Line
Becoming an insurance agent is a difficult task. There are many opportunities for rewarding careers in the insurance industry, but also ample chances for failure. Before you jump in as an insurance agent, try to set up a call with a few agents who already have experience in the industry. Getting perspective on what you can expect can help you mentally prepare for the road ahead.
During the beginning, and throughout your whole career, it's valuable to make sure you have leads coming in all times. Without quality leads who are ready to buy, you could end up in a state of endless cold-calling, rejection, and wasting time and energy. You don't need to be one of the many insurance agents who fail. Let Nectar's real-time insurance leads or live call transfers set you up for success right out of the gate.
This article reflects the features of Nectar as of the date of publication. Features are subject to change at any time. This article is meant for informational purposes only, it is not a guarantee that using Nectar will help you achieve specific business or financial results and is not intended to serve as the sole recommendation for any business financial decisions.