Representing multiple insurers, an independent insurance sales agent selects from among a broad range of insurance products to best meet the needs of prospects and clients. Sales presentations are generally made either in the prospect’s home or the agent’s office, and agents sometimes work a long, flexible schedule to accommodate their clients’ and prospects’ schedules. When not meeting with prospects or clients, the typical agent spends a great deal of time prospecting, that is, finding new potential clients.
Skills, Training and Certification
Although many independent insurance agents have earned college degrees, this is a field in which a high school graduate with a positive, assertive personality and an aptitude for financial topics can excel. Agents must be licensed in every state in which they do business. Many agents start with a life and health license and earn their property and casualty license. Insurance licenses must be renewed, generally every two years, and agents are required to keep their knowledge and skills up-to-date by taking continuing education courses.
The majority of a typical independent insurance agent’s time is spent prospecting, followed by meeting with prospects. Agents develop leads through their marketing efforts, which may include mass mailings, flyer distributions, advertising and Internet campaigns, as well as purchasing lists of leads from marketing firms. They contact leads, primarily by telephone, and set appointments. At these appointments, they go through a standard fact-finding process to make an initial assessment of a prospect’s needs, then make a sales presentation for products that will meet those needs and fit within the prospect’s budget. In addition to selling life, health, homeowner's and auto/boat/motorcycle insurance policies, some agents also sell financial products such as annuities. Agents typically provide customer service to their clients through the years, answering questions and helping them navigate the claims-filing process.
There’s a great deal of recordkeeping and paperwork involved in the insurance industry. Independent agents do their own or hire administrative support, often partnering with other independent agents to form an agency. They also spend a good deal of time networking at industry-specific functions or in organizations like the Chamber of Commerce and service clubs like Rotary or the Lions. Agents also spend time studying to enhance their mastery of their products and knowledge of the industry; in addition, continuing education seminars and courses are excellent networking venues.
Independent insurance agents earn a commission on the first year’s premium for every sale they make. Commissions vary by product, and generally range from 5 to 15 percent of premiums paid for auto, homeowner's and health insurance policies. Commissions for life insurance policies are much higher, and can range from 40 percent to more than 100 percent of the first year’s premium. Annuities, which generally have a minimum cost of $5,000, typically generate a commission in the range of 2 percent to 10 percent, with an average of about 6 percent. Agents also earn a renewal commission each year an insurance policy is renewed; some annuities also generate renewal commissions. Renewal commissions are generally much smaller than the first year’s premium. Agents sometimes earn bonuses or other incentives from their agencies or the companies they represent if they meet sales quotas.
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