5 Challenges of Being an Insurance Agent (And How to Solve Them)

Being an insurance agent or broker is a great career choice, after all, we all need protection. But like any job, there are challenges of being an insurance agent. By understanding what challenges and opportunities exist you can proactively address them. And even if the challenges persist, knowing what you need to work on, rather than being caught off-guard, can be a big advantage.

Some of the more common challenges of being an insurance agent include:

1. Balancing Administrative/Operational Work With Sales
2. Finding New Leads
3. Getting Renewals
4. Managing Changes in Customer Expectations
5. Keeping Up With Technology

In this article, we’ll explore these challenges in more depth, as well as consider ways to solve these problems.

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#1 Balancing Administrative/Operational Work With Sales

Being an insurance agent, especially if you run a smaller independent agency, can involve wearing many hats. Not only do you have to drum up sales, but you also often have to handle all the administrative and operational work that goes along with that, ranging from handling client paperwork to managing agency bookkeeping. If you’re spending a lot of time on administrative/operational work, that can leave you pressed for time when it comes to initiating marketing campaigns and trying to close more deals to grow your book. 

In many cases, the solution to this insurance agent problem is to find support for administrative and operational tasks via software, along with getting help from other employees or service providers. For example, if you’re spending a lot of time handling agency finances, it may be worth it to hire an accountant instead, as you can then use that time to focus on sales. Or, if you don’t want to incur that much of an expense, you could at least use more automated bookkeeping software. 

As for administrative tasks like handling client paperwork, you can also leverage software. For example, you can save time with tools like Wheelhouse. One of Wheelhouse’s many features is copy quoting. If you’re cross-selling policies, you can use the tool to easily copy over information from a previously quoted application, which can save both you and your clients time, thereby potentially helping you close more deals. 

#2 Finding New Leads

Another challenge of being an insurance agent is continually being able to find new leads. This sales-oriented business often requires a steady stream of prospects, but it can be hard to get those leads without breaking the bank or spending all your time on marketing, to the neglect of your existing clients. So, what can an insurance agent do?

One strategy is to focus more on building strong relationships with existing clients. Effectively, you can accomplish two things at once that way — improving client retention while also getting more referrals. That way, you can spend less time setting up marketing campaigns and spending so much money on advertising, and more leads can come to you organically.

However, you might have to give your current clients a nudge, such as by asking them to leave you a review on a site like Yelp. That can help new prospects find you online, while also keeping you top of mind for current clients, who might then remember to refer you to others who they know need your services. You can also directly ask for referrals from current clients. When they renew their policies, for example, you might ask them if they know of anyone else who would benefit from similar policies. 

#3 Getting Renewals

Finding new leads can be hard enough, but then comes the insurance agent challenge of getting current customers to renew. Client circumstances may have changed, which affects their policy needs, such as if a business owner closes up shop and no longer needs commercial insurance. Or, maybe tightening economic conditions have caused clients to price hunt more. Whatever the case may be, it’s not always straightforward to get all your clients to renew.

As mentioned, however, you can put more time into building relationships with clients, both as a way to improve retention and ultimately find more leads through referrals and reviews. For example, checking in with clients throughout the year, rather than just at renewal time, can help you get in front of issues. Perhaps their business is changing and they assume that you can’t help them with a different type of policy. But, if you talk to them before they get a quote from another insurance agent, you might both realize that you can continue to work together. 

Getting more renewals can also depend on having a smooth renewal process. Staying on top of renewal reminders, for instance, can help you minimize situations where current clients let coverage lapse accidentally.

#4 Managing Changes in Customer Expectations

Customer expectations can continually change, and keeping up with these shifts is one of the biggest challenges of being an insurance agent. Whether clients are becoming more price-sensitive, are changing their communication preferences, or anything else, insurance agents need to stay on top of evolving expectations. 

Nowadays, one of the most important ways to meet customer expectations is to leverage data. Understanding seemingly small things like the blog posts on your site that get the most traffic or the social media posts that get the most engagement can give you clues about what customers care about. You can also leverage financial and economic data to help clients understand risk as it relates to insurance protection, for example. 

“Reps who visit a client with nothing more than a glossy brochure won’t be invited back. They need to come to meetings armed with specific sales opportunities, including data to show how and where the opportunities exist and actionable ideas for how to pursue them,” notes PwC.

#5 Keeping Up With Technology

Related to managing changes in customer expectations is a need to keep up with technology. Both for your own operations as an insurance agent and as a way to provide a better experience for customers, many insurance agents need to adopt new tools and ways of working online. 

Smaller insurance agents may feel like they can’t keep up with technology, especially in comparison to big agencies and carriers that can invest heavily in new solutions. But this challenge of being an insurance agent can be overcome by using the flexibility inherent at smaller firms to overhaul processes. Instead of relying on manual quoting over the phone and through email, for example, you can give prospects the opportunity to easily generate their own quotes online via Wheelhouse. Getting up and running with these new tools can be easy for smaller agents, especially if you don’t have to coordinate with legacy systems.

As McKinsey notes, “many insurers are still modernizing their technology stacks and are at an early stage of the digitalization journey, leaving them susceptible to being overtaken by more nimble players.”

Solve the Challenges of Being an Insurance Agent

While being an insurance agent can come with several challenges, the solutions are often within reach, including for smaller, independent agents. By taking steps like adding new InsurTech tools, diving deeper into client relationships, and leveraging data, insurance agents can mitigate many of these issues. It’s natural for insurance agent problems to exist, but by acknowledging the challenges you can at least start on the path toward solving them.