Insurance Sales Agents - What They Do
Most people have their first contact with an insurance company through an insurance sales agent. These workers help individuals, families, and businesses select insurance policies that provide the best protection for their lives, health, and property.
Insurance sales agents, commonly referred to as “producers” in the insurance industry, sell one or more types of insurance, such as property and casualty, life, health, disability, and long-term care. Property and casualty insurance agents sell policies that protect individuals and businesses from financial loss resulting from automobile accidents, fire, theft, storms, and other events that can damage property. For businesses, property and casualty insurance can also cover injured workers' compensation, product liability claims, or medical malpractice claims.
Life insurance agents specialize in selling policies that pay beneficiaries when a policyholder dies. Depending on the policyholder's circumstances, a cash-value policy can be designed to provide retirement income, funds for the education of children, and other benefits, as well. Life insurance agents also sell annuities that promise a retirement income. Health insurance agents sell health insurance policies that cover the costs of medical care and loss of income due to illness or injury. They also may sell dental insurance and short-term and long-term-disability insurance policies. Agents may specialize in any one of these products, or function as generalists, providing multiple products to a single customer.
An increasing number of insurance sales agents offer their clients advice on how to minimize risk as well as comprehensive financial planning services, especially to those approaching retirement. These services include retirement planning, estate planning, and assistance in setting up pension plans for businesses. As a result, many insurance agents are involved in “cross-selling” or “total account development.” Besides offering insurance, these agents may become licensed to sell mutual funds, variable annuities, and other securities. This practice is most common with life insurance agents who already sell annuities, but many property and casualty agents also sell financial products.
Insurance sales agents also prepare reports, maintain records, and seek out new clients. In the event that policy holders experience a loss, agents help them settle their insurance claims. Insurance sales agents working exclusively for one insurance company are referred to as captive agents. These agents typically have a contractual agreement with the carrier, and are usually an employee of the carrier. Independent insurance agents, or brokers, are mostly facilitators who represent several companies. They match insurance policies for their clients with the company that offers the best rate and coverage.
Technology—specifically, the Internet—has greatly affected the insurance business, making the tasks of obtaining price quotes and processing applications and service requests faster and easier. The Internet has made it easier for agents to take on more clients and to be better informed about new products. It has also altered the relationship between agent and client. Agents formerly used to devote much of their time to marketing and selling products to new clients. Now, clients are increasingly obtaining insurance quotes from a company's Web site and then contacting the company directly to purchase policies. This interaction gives the client a more active role in selecting their policy, while reducing the amount of time agents spend seeking new clients. Insurance sales agents also obtain many new accounts through referrals, so it is important that they maintain regular contact with their clients to ensure that the client’s financial needs are being met. Developing a satisfied clientele that will recommend an agent's services to other potential customers is a key to success for agents.
Increasing competition in the insurance industry has spurred carriers to find new ways to keep their clients satisfied. One solution is hiring customer service representatives who are accessible 24 hours a day, 7 days a week to handle routine tasks such as answering questions, making changes in policies, processing claims, and selling more products to clients. The opportunity to cross-sell new products to clients will help an agent’s business grow. The use of customer service representatives also allows agents to concentrate their efforts on seeking out new clients and maintaining relationships with old ones.
Most insurance sales agents work in offices. Since some agencies are small, agents may work alone or with only a few others. Some independent agents, or brokers, however, may spend much of their time traveling to meet with clients, close sales, or investigate claims. Agents usually determine their own hours of work and often schedule evening and weekend appointments for the convenience of clients. Some sales agents meet with clients during business hours and then spend evenings doing paperwork and preparing presentations to prospective clients. Although most agents work a 40-hour week, some may work much longer.Education & Training Required
For insurance sales agent jobs, many companies and independent agencies prefer to hire college graduates—especially those who have majored in business, finance, or economics. High school graduates may be hired if they have proven sales ability or have been successful in other types of work.
College training can help agents grasp the technical aspects of insurance policies as well as the fundamentals of the insurance industry. Many colleges and universities offer courses in insurance, and a few schools offer a bachelor's degree in the field. College courses in finance, mathematics, accounting, economics, business law, marketing, and business administration enable insurance sales agents to understand how social and economic conditions relate to the insurance industry. Courses in psychology, sociology, and public speaking can prove useful in improving sales techniques. In addition, familiarity with popular software packages has become very important because computers provide instantaneous information on a wide variety of financial products and greatly improve an agent’s efficiency.
Agents learn many of their job duties on the job from other agents. Many employers have their new agents shadow an experienced agent for a period of time. This allows the agent to learn how to conduct their business, how the agency interacts with clients, and how to write policies.
Employers also are placing greater emphasis on continuing professional education as the diversity of financial products sold by insurance agents increases. It is important for insurance agents to keep up to date on issues concerning clients. Changes in tax laws, government benefits programs, and other State and Federal regulations can affect the insurance needs of clients and the way in which agents conduct business. Agents can enhance their selling skills and broaden their knowledge of insurance and other financial services by taking courses at colleges and universities and by attending institutes, conferences, and seminars sponsored by insurance organizations.
Insurance sales agents must obtain a license in the States where they plan to work. Separate licenses are required for agents to sell life and health insurance and property and casualty insurance. In most States, licenses are issued only to applicants who complete specified prelicensing courses and who pass State examinations covering insurance fundamentals and State insurance laws. Most State licensing authorities also have mandatory continuing education requirements every 2 years, focusing on insurance laws, consumer protection, ethics, and the technical details of various insurance policies.
As the demand for financial products and financial planning increases, many insurance agents choose to gain the proper licensing and certification to sell securities and other financial products. Doing so, however, requires substantial study and passing an additional examination—either the Series 6 or Series 7 licensing exam, both of which are administered by the National Association of Securities Dealers (NASD). The Series 6 exam is for individuals who wish to sell only mutual funds and variable annuities, whereas the Series 7 exam is the main NASD series license that qualifies agents as general securities sales representatives.
Previous experience in sales or insurance jobs can be very useful in becoming an insurance sales agent. In selling commercial insurance, technical experience in a particular field can help sell policies to those in the same profession. As a result, these agents tend to be older than entrants in many other occupations.
Insurance sales agents should be flexible, enthusiastic, confident, disciplined, hard working, and willing to solve problems. They should communicate effectively and inspire customer confidence. Because they usually work without supervision, sales agents must have good time-management skills and the initiative to locate new clients.