How relevant is the traditional Life insurance agent?
8 May 2014
Our team spends a lot of time thinking about the role of the agent. Over the years, we have seen considerable change, particularly in the application of technology. What we have not seen change is the agent. By agent I mean the “transactional” life insurance agent. Their business is made up of selling life insurance, usually at the kitchen table of the proposed insured, and that is their primary focus. You can picture the agent: they arrive carrying a briefcase that contains paper applications. They will likely be in a suit, or at least a sport coat, sometimes with the logo of their carrier or agency in a nice crest. They consult with the proposed insured, or more likely the husband and wife, and then sell them a policy by filling out the application with their ballpoint pen. This very old school approach has not changed since our parents bought insurance. This is still a successful model for some, but we believe it will be less so as time marches forward. But if you are one of these agents and recognize the need to change, what do you do? Many have already transformed their practice into that of a financial advisor or wealth manager, and that’s a great direction, but it is not for everyone. One approach follows a slightly different path and acknowledges the changes in the marketplace being driven by exchanges. The agent could license private exchange technology from one of several vendors and build a brand. They would advertise and push this brand and steer potential customers to a website where they could sell major medical, both on and off the federal and state exchanges. They could sell supplementary products and, perhaps most importantly, they could sell transactional life insurance, focusing on term. Back in the office, the agent could have a small call center team. Their role would be to answer phone calls from people that either came through their website or were referrals. You see, if it is easy and transactional (can you say term?), then we would want one of our modestly salaried team to handle it over the phone. The agent’s energies would then be focused on a combination of marketing (establishing the brand) and sales (focusing on the big win), including large-face life and large annuities. This is one option, and one perspective, but one that we believe should generate discussion. Tom Scales Follow me on twitter @tjscales
Comments
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Agents are the backbone of insurance companies, as they are the one who contact people and convince them to apply for various life insurance plans. Changes are always good if these agents improve themselves it will be good for their own growth and the company as well.
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I'm 28 years old and I've worked in the insurance industry for over half a decade, and because I'm in the marketing field I've learned that life insurance agents are a godsend for folks like myself who don't really understand the ins and outs of insurance. The problem, though, is that Millennials like myself don't generally speak to an insurance agent before they buy a policy: They simply shop online, sign up for a policy and that's it, never speaking to any professional to determine if their coverage is adequate, if they're getting a good deal, etc. I've seen this across all forms of insurance--auto, home, health, life, renters--and it's especially problematic because insurance is one of those products you buy but hope you never, ever have to use, like a fire extinguisher.