Intense analysis of licensed Department Insurance agents records conclude than only 6% of agents survive slightly over 4.3 years. You will see the facts, and logical explanations why insurance agent retention and income are so low.

This article is written to dismiss many of the misconceptions of recruiting new insurance agents. There are over 1,400,000 insurance agents currently licensed by insurance departments within the United States  In our evaluation, this means an unnecessary  surplus of around a half million agents. Countless new life and health insurance agents are either poorly trained, have an insufficient number of prospective clients, or should have never been hired to begin with. So if 500,000 rookie agents 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 agents. Both of these methods when statistically analyzed, show almost identical results. Those results are that 85% of agents will starve their way out of the business within the first 18 months. In 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 is at least 50% of the blame for agents dropping like flies. The recruiters hire agents who can not go out on their own and make a sale.. Even though the agent can pass an interview of prepared interviewer questions, this in itself does not guarantee any degree 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 you can sell, it does not mean you can successfully recruit. Both the sales manager and college campus recruiter are likely to highly pump the prospective agent up with inflated visions of six figure incomes and a lifetime steady career. 

Another 25% of non-survival goes to insurance agent recruiters for providing false concepts, and poor training. Most newly licensed agents anticipate easily  obtaining incomes exceeding  $40,000 to $70,000. Our 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 figure for being a new insurance professional would be under $20,000. When one agent leaves, another will be quickly licensed to take his place. The departed rookie has written policies on a few friends, neighbors, and outsiders, so if these policies renew an average of ten years, the insurance company collects all the premiums without paying any more acquisition costs. .I call this concept putting meat in the insurance company's freezer. 

Job fair recruiters sent to college campuses usually do the worst job. The college recruiter pitches the memorized and rehearsed script to college seniors, exalting how entering the insurance professional is more prosperous that in other qualified fields.  Remember the college recruiter usually gets a bonus for each recruit. If the prospective agent had been screened with numerous background questions, survival chances could have been quickly predetermined.

How do you predetermine a success factor?  Well first realize that if the agent is already financially in debt, and hanging on to survive, this survival rope will not become stronger, but weaker and weaker. You must start with agents that can sell and can quickly become financially strong enough to survive.  This is fine if the new college grad comes from a wealthy family, or one with relatives adept at selling.  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 than his parents 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 contains very few experienced insurance professionals earning over $70,000 a year.

How do you predetermine success?  During the first 4 years of almost any salesperson's career there is a comfort zone. In other words, the salesperson is most comfortable talking to and attempting to sell prospective clients in an environment or income level that  matches his own. The career insurance agency however wants big premiums, and tries to train him to sell individuals earning at least $100,000 a year or approaching small business owners. Upon failure to make sales, the blame comes down to the agent for not trying or working hard enough.  The agency should have started him working on a $40,000 class of clientele, and gradually raising the level. He could have worked his way up, and been one of the few 6 out of a hundred that survive.

Oh well, if the agent is dismissed, the business he managed to write just put more meat in the insurance company's freezer.

The next article explains why leads account for 25% of a rookie agent's survival factor and much higher for the seasoned pro. Death of an Insurance Salesman is an article you will want to read hot off the press.

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