Insurance Sales Career and Job Highlights
Insurance Sales Career Overview
Oftentimes, insurance sales agents are the first established link made between a consumer and an insurance company. Sales agents work with businesses, individuals, and families helping them to select insurance policies that fit their individual needs, providing them with the best safeguard for their health, lives, and property. There are two main types of sales agents, independent agents, and captive agents. Independent insurance agents, sometimes referred to as brokers, represent several different insurance companies. Their goal is to place their clients with an insurance company whose policies, rates, and coverage, best suite the needs specific to that particular client. Captive insurance agents on the other hand, work for a specific insurance company. Their goal is find policies within their company that will fit the needs of their clients. The function of both types of agents is basically they same. Both maintain records, prepare reports, seek out new clients, and help policy holders settle their insurance claims. Some sales agents also provide their clients with advice or a financial analysis on ways in which they can reduce their risk.
There are a variety of insurance policies that a sales agent can sell, and most sell more than one type. Some commonly sold insurance policies include, property, casualty, life, health, disability, long-term care. Insurance agents sell property and casualty to individuals and businesses who are interested in protecting themselves from financial loss due to fire, theft, storms, automobile accidents, and various other things that can cause significant damage to property. In some cases, property and casualty insurance purchased by a businesses can also be applied towards product liability, medical malpractice claims, and even worker’s compensations.
Agents specializing in life insurance sell polices that provide beneficiaries with income when a policyholder dies. Money from this type of policy can be set up to provide education for children, retirement income for a spouse, or other benefits specific to the policy holder’s circumstance. Annuities, that promise a retirement income, are also sold by life insurance sales agents. Clients who want to insure coverage for medical care in the case of illness, injury purchase medical, or health, insurance. Some health care agents may also sell dental insurance as well as short- and long-term disability policies.
Increasingly insurance sales agents are offering and expanding line of planning services to their clients; including, estate planning, retirement planning, ore assistance in setting up pension plans. Because of this, many insurance agents have become active in “cross-selling” or “total account development”. Agents may also become licensed to sell variable annuities, mutual funds and other securities in addition to offering insurance. Although property and casualty agents also sell financial products, this practices is most common among life insurance agents who already sell annuities.
Due to increasing technological advancements, the insurance agency has become much more efficient allowing individual agents to take on more and more clients. Many sales agents now have computers which are directly linked though the internet to their insurance carriers. This makes the daunting task of processing applications, obtaining price quotes, and managing service requests both faster and simpler. Computers also allow agents to be more knowledgeable and up to date on the latest products that the insurance carriers may be offering.
Internet expansion is gradually altering the way clients and agents interact with one another in the insurance industry. While formerly agents were required to devote a significant amount of time to marketing and new client sells, clients are now searching through web pages to find quote and contacting companies on their own. This new interaction has proved beneficial in two ways; first, it gives the client a more active role in their purchase, allowing them to choose a policy suited for them at the best price possible. Second, the amount of time agents are required to spend actively seeking new clients has been greatly diminished. However, it is continuously important for sales agents to maintain regular contact with their client as many of their new accounts also come through referrals. Also, regular contact with clients is vital to ensuring that the client’s financial needs are being met. Sustaining a satisfied and happy clientele is key to an agents success.
The insurance industry has been stimulated in their efforts to keep clients and customers happy through increasing competition. One way in which they have strived to improve their customer service is to increase the number and use of call center. Call centers are most often accessible to clients at any time of day, anytime throughout the week. Customer services representatives are also being hired. Their responsibilities include processing claims, answering questions, making changes in policies, and selling more products.
Insurance Sales Training and Job Qualifications
Most companies and independent agencies prefer to hire college graduates for insurance sales agent positions. Graduates who have majored in business or economics are especially sought after. Occasionally insurance agencies will hire high school graduate employees, but only if they have been proven successful in other types of work, or have demonstrated sales ability. In fact, it can be quite beneficial to a company to hire new employees who come as transfers from other occupations. For example, technical experience in a particular field can prove extremely useful for those selling commercial insurance to others in that same profession. Because many sales agents come into the business as transfers from other areas of work, the new agents tend to be older than applicants in many other occupations.
Completion of a college degree can aid sales agents in understanding the technical aspects of insurance policies as well as the fundamentals and procedures of selling insurance. There are many colleges and universities offering courses in insurance, some of which offer a bachelor’s degree in the field. College courses which may prove useful to sales agents who are trying to understand the relation of economic and social conditions to the industry may include accounting, economics, mathematics, finance, business law, business administration, and marking. Where as courses in public speaking, sociology, and psychology can be helpful in developing various sales techniques. Efficiency and familiarity with computers and various software packages is also important due to the increasingly wide spread use of such technology throughout the industry.
Licenses must be acquired by agents in the state where they intend to do their selling. Also, separate licenses are required for agents who wish to sell life and health insurance as well as property and casualty insurance. Most states require applicants to complete specified pre-licensing classes and examinations before issuing them a license. These courses and state examinations cover state insurance laws and fundamental insurance information specific to each state. In 1999, an act entitled Gramm-Leach-Bliley was passed causing the insurance agency to move steadily towards reciprocal licensing, and a uniform set of state licensing standards. This change would then allow agents who have already been licensed in one state to work in other states upon completion of pertinent courses and examinations.
Agents who wish to specialize in areas such as financial counseling, or life, health, and property and casualty insurance, can become certified in their area of focus by attending a professional program. There are number of organizations offer such programs. And, although it isn’t mandatory, such certification can be useful to agents in assuring their employers and clients of the agents detailed understanding in their specific specialty. Completion of a specific amount of continuing education hours are generally required for agents to achieve certification.
As the variety of financial products being sold by insurance agents multiplies, continuing professional education is becoming more an more important to a wide number of employers. Because the needs of clients and the way in which agents run their business can be substantial affected by changes in government benefit programs, tax laws, and other Federal and State regulations, it is essential for insurance agents to keep current on matters concerning clients. Taking courses at colleges and universities or attending various sponsored conferences and seminars can improve an agents selling proficiency as well as expand their understanding of insurance and other financial services. In addition, most State licensing authorities have compulsory continuing education requirements. Requirements focus on technical fine points of different insurance policies, as well as consumer protection and other insurance laws.
The consumer demand for both financial products as well as financial planning is increasing. Because of this, more and more insurance agents are striving to meet licensing and certification standards. Although it is necessary to study and pass a National Association of Securities Dealers exam to become licenced, agents are finding that the benefits that come from being able to sell securities and other financial products as a licensed and/or certified financial agent far out way the inconvenience and hard work. There are two types of exams given by the NASD; both a series 6 and a series 7. Agents who wish to sell only mutual funs and modifiable annuities will be given the series 6 exam, while those agents interested in becoming general securities sales representatives will need to pass the series 7 exam. Earning the designation “Chartered Financial Consultant”, or “Certified Financial Planner” may also prove useful to some agents.
It is important that sales agents be confident, enthusiastic and flexible. Discipline and hard work, in addition to problem solving skills are also desirable traits. Communication skills are vital as sales agents work to inspire a level of trust and confidence in their relationships with their customers. Also, since they most often work independently, it is very important for sales agents to be outgoing enough to find new clients, and be efficient with the use of their time.
For sales agents who are interested in advancement, ability in leadership may lead to manager status within a local office. Some even find themselves advancing to superintendent or executive positions. And some, chiefly those working in property and casualty fields, go on to form their own agencies or brokerage firms. For others, especially for those who have built up a good clientele, remaining in sales work is much more satisfying.
Insurance Sales Agents Job and Employment Opportunities
Despite the anticipated slower-than-average growth rate for jobs within this occupational field, qualified, capable agents are still expected to be able to find opportunities for work throughout the year 2012. Flexibility and self-motivation will be crucial to new agents looking for work. Agents must take pleasure in competitive sales work, have exceptional interpersonal skills, and have a vast array of knowledge concerning various insurance and financial services. It is possible for agents with foreign language skills to find more opportunities for work as demands for service increase among a wider assortment of customers. Also, due to the technical nature of the work, agents must enlighten themselves with a vocabulary and understanding reflective of the many technical and legal terms they will encounter. It can be difficult for many beginning agents to adequately establish a good clientele. Because of this, many job openings may come from a need to replace agents who leave to find other jobs, or who retire.
The volume of sales dedicated to insurance and other financial products is expected to largely effect the future demand for insurance sales agents. And, it is estimated that long-term-care insurance, and health insurance sales will increase drastically as the population continues to age. Along that same line, an older population will give rise to the demand for automobile and home insurance, as well as various coverage plans for other valuable purchases and equipment. It is also expected that commercial insurance sales will rise due to the expansion of coverage sought by both new and existing business firms. Such coverage may include expansions on worker’s compensation, pollution and other liability coverage, and employee benefits.
However it is not expected for the employment of agents to keep up with the rising level of insurance sales. This is in in large part due to the containment of costs which insurance carriers strive for. In effect, many companies are letting go of their captive agents, and are turning much more to direct marketing, or independent agents.
It is important for agents to integrate new technology into their already present businesses in order to remain competitive. Innovative technology such as the internet can be used to reach an extensive client base, and to expand business opportunities. And, because most clients appreciate their relationship with their agent and like discussing their policies directly with their agents, such uses of technology should not be seen as a threat to jobs. The expansion of automated policy and claims processing is also benefiting agents, making the opportunity to take on additional clients more available.
Amplified consolidation among insurance companies, brokerage firms, and banks may cause a heightened increase in competition between traditional securities brokers and bankers. Increasing client demand for more comprehensive financial planning, will cause a need for agents to expand their products and services in order to make effective sales.
Supplying clients with better customer service is another way agent can increase their competitiveness. To do this carriers and agents may implement call centers to take customer calls. Call centers provide greater access to information regarding the company policies and insuring timely services.
As investments and insurance policies become more and more complicated many individuals as well as businesses are finding that they lack both the time and knowledge to purchase such policies without the help of an agent. And, because most individuals and businesses consider insurance an important necessity, agents are not likely to face unemployment because of an economic recession.
Historical Earnings Information
In the year 2002, insurance sales agents made a median annual earning of $40,750. Between $28,860 and $64,450 was made by the middle 50 percent, and the lowest 10 percent earned about $21,750 or less. In contrast, more than $101,460 was earned by the highest 10 percent. The two industries which employ the largest number of employees are insurance agencies and brokerages. Their median annual earnings in 2002 were $40,480, while other insurance related activities and insurance carriers brought in a median earning of $42,130. Extremely successful insurance sales agents have been known make earnings of $100,000 to $500,000 a year.
Sales workers employed by various agencies may be paid salary only, salary plus commission, or salary plus bonus, while independent agents are most often paid by commission only. Commissions are a customary form of compensation given to agents, especially for those who are highly experienced. The type of insurance being sold as well as whether or not a transaction is a new policy or a renewal dictates the amount of commission an agent will be given. For agents who meet their sales goals or for those working for an agency which meets its goals for profit earnings, bonuses are often granted. Other agents, such as those working with financial planning may receive a payment for their services, instead of a commission.
Oftentimes, companies provide a variety of paid benefits to their insurance sales agents. These may include training for licensing, continuing education, office space, clerical support services, group insurance plans, and retirement plans. Automobile and transportation, promotion and marketing expenses, and attendance at conventions and meetings may even be paid by some companies. While independent agents working for insurance agencies may collect fewer of these benefits, their commission are commonly higher to help them compensate for marketing and other expenses.
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