Challenges New Insurance Agents will Encounter

Beginning a new job can be daunting, but when you are starting out as a new independent insurance agent, you’re facing a whole new set of challenges.

As a consequence, many new agents just starting out do not see much success—in fact, many give up far too quickly. It’s been estimated that for every ten new agents that enter the insurance business only one will stick with it for the long term. Be forewarned: these challenges are not something you’ll cover in insurance school, and you won’t find it on the state insurance exam. But overcoming these challenges will be more important to the longevity of your career than anything you’ll see in your insurance licensing study material.

So why do new insurance agents fail? Let’s take a look at some of the reasons.

Starting from scratch is not easy

Unless you have the capital to purchase a book of business—or if your family is in the business and you’re inheriting an existing book–then you’re coming into the business with precisely zero clients. And that blank slate can be very frustrating for new agents.

Not only does the new agent need to be well-versed in a long list of coverages and industry jargon, but they must also be good marketers, spending lots of time on lead generation and production. These two things are unique skill sets.

After all, what’s the point of knowing all about pollution coverage if you don’t have anyone to sell to?

New insurance agents will generally start with cold calling and door knocking. While it does give new agents experience in front of clients, it’s usually a time-consuming and frustrating endeavor.

However, the main issue can be facing down the fear of rejection, and it’s one that most new agents don’t anticipate when starting out. The fear of being rejected is enough to lead an agent to justify putting off prospecting, which is a death spiral.

For many new agents who have dreams of selling their way to a million-dollar book of business in no time, the simple fact that they must start from scratch is enough to get them to quit.

Don’t get discouraged

If you don’t sell anything in your first few months it can be really easy to get discouraged and throw in the towel.

And that’s when the negative self-talk starts: Did I make a mistake getting into this business? Am I cut out for this type of work? Will success ever come?

Unfortunately, most “sales managers” aren’t qualified to genuinely help new agents, and formal training programs are laughingly few and far between in the ranks of the independent agencies. Pep talks and rah-rah sales meeting don’t really work as incentives. The simple fact is that new agents need to prepare for constant rejection, but also prepare to persist and be patient.

Yes, rejection does hurts

It doesn’t matter if you’ve been rejected by a prospect, laughed at by a competitor, or cursed out in the office of a potential client, it all hurts.

However, rejection can be extremely useful. And many agents realize that the more times they hear “no” the closer they are to a “yes” from a prospect. Make it a point to learn from each rejection, and come back stronger and better prepared on the next one.

Also, you have to understand that just because a particular prospect said “no” this time, they may have a “yes” for you the next time. It pays to be persistent.

This isn’t a get rich quick business

Here’s a tip: no business is a get rich quick business. And neither is insurance. Any prospective employer that tells you otherwise isn’t telling you the truth and setting you up for failure.

Like anyone getting started at something new you start at the bottom, work hard, develop a book of business over time, and slowly build on that book. But new agents don’t always have that kind of patience, and, just as important, they may not be able to support themselves (and a family, if need be) while that book is being built.

If you’re beginning an insurance career later in life, circumstances may help in some instances. As an example, you may have a spouse that can shoulder the burden for a year or two while you ramp up.

However, for many new to the business, the financial pressures at the start are just too much to handle without a steady, regular paycheck, and they’re not able to get past the first few difficult years.

Too much freedom

Being an insurance agent means you likely have quotas, or at least some minimum expectation for sales. While the freedom of the job is a great thing, it can also be a curse for the undisciplined. It’s hard to make time every day to make calls or follow up with prospects.

The fact that you have the freedom to come and go as you please, to create your own schedule, means you can literally be doing anything else but selling during the course of a day.

And this, coupled with the fear of rejection mentioned above, has been the killer of many an insurance career. Set aside time every morning (or evening, if that works better for you) to dedicate to prospecting. During this time, turn off the phone and avoid any other distraction that may keep you from doing this most crucial of tasks.

Is your first impression sabotaging the deal?

Contrary to popular belief, you do not have to be a schmoozing extrovert to be a success in selling insurance, but you do have be likable, presentable, and have the ability to communicate effectively with a prospect—both in person and in writing.

Always play to your strengths. If you’re shy by nature, ask good, probing questions and let your client or prospect do the talking. In fact, this is good advice for introverts and extroverts alike. People like to talk about themselves and their businesses, so let them.

New agents tend to want to show prospects how much they know about insurance and then hammer them with an awkward sales pitch. Don’t be that agent. Start with small talk and get to know your prospect. Find out about their needs and problems by asking questions, then address each problem with a creative, well thought out solution.

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