Industry wide first year turnover rate?
- Thread starter Survivor
- Start date
I haven't seen any in years. GAMA used to provide this but things have changed a lot. The career shops have all but disappeared. Most new agents get very little training and what they get consists of little more than a canned sales pitch.
Lot's of folks get into the business part time which has a very high drop out rate. Some agencies have a very high burn out rate. Marketing firms like NAA, NASE, Alliance for Affordable Services, Farm & Ranch, United American do a lot of churn & burn.
The few career life shops are very selective in recruiting so their turnover is much lower.
I have no idea about the P&C shops.
Why do you ask? All that really matters is whether you have what it takes to make it.
Lot's of folks get into the business part time which has a very high drop out rate. Some agencies have a very high burn out rate. Marketing firms like NAA, NASE, Alliance for Affordable Services, Farm & Ranch, United American do a lot of churn & burn.
The few career life shops are very selective in recruiting so their turnover is much lower.
I have no idea about the P&C shops.
Why do you ask? All that really matters is whether you have what it takes to make it.
- Thread starter
- #3
It is tough and a lot will drop out in the first year. Others will make it for up to 3 years before they give in.
I quit this business a few years ago after working in it for 25 years. Walked away and did other things for 3 years. I found that as much as I hated my industry it was head and shoulders above other things.
Several times during my career I have had to reinvent myself and start over. It is a slow & tedious process but each time I learned something new about the industry and about myself.
Three years ago I shifted to individual health sales. Something I had never done before. My focus had always been large group cases, working in various capacities in the industry from wholesale to retail. That shift to individual health was probably the most challenging and tedious. I found underwriters who did not know how to underwrite, home offices that do not want to give client (or agent) services, and communication between HO and agent to be virtually non-existent.
I have no idea how policyholders who deal direct put up with the incompetence and lack of customer service. I know how the game is played and I get very frustrated on almost a daily basis. Policyholders don't even know the rules and have no clue what they have.
During my career I have sold life insurance, retirement plan funding, small group, large group, self funded medical, group term life, group STD & LTD and now individual health. I have worked shoulder to shoulder with top producers and rookies, pro's and rummy's, issuing carriers, reinsurers, intermediaries, actuaries, consulting shops, IMO's and company reps. I have seen the best and worst of our industry.
It isn't perfect but most of the time it works exactly as promised and that is something you cannot say about any other industry.
I quit this business a few years ago after working in it for 25 years. Walked away and did other things for 3 years. I found that as much as I hated my industry it was head and shoulders above other things.
Several times during my career I have had to reinvent myself and start over. It is a slow & tedious process but each time I learned something new about the industry and about myself.
Three years ago I shifted to individual health sales. Something I had never done before. My focus had always been large group cases, working in various capacities in the industry from wholesale to retail. That shift to individual health was probably the most challenging and tedious. I found underwriters who did not know how to underwrite, home offices that do not want to give client (or agent) services, and communication between HO and agent to be virtually non-existent.
I have no idea how policyholders who deal direct put up with the incompetence and lack of customer service. I know how the game is played and I get very frustrated on almost a daily basis. Policyholders don't even know the rules and have no clue what they have.
During my career I have sold life insurance, retirement plan funding, small group, large group, self funded medical, group term life, group STD & LTD and now individual health. I have worked shoulder to shoulder with top producers and rookies, pro's and rummy's, issuing carriers, reinsurers, intermediaries, actuaries, consulting shops, IMO's and company reps. I have seen the best and worst of our industry.
It isn't perfect but most of the time it works exactly as promised and that is something you cannot say about any other industry.
- 10,275
I imagine that the turnover rate is still high. 97% seems a bit much though. I could see 50%-80%.
- 7,066
I believe that the extremely high drop out rate of first year agents is mainly due to the way companies and agencies go about recruiting new agents.
They seem to target low income, unsuccessful individuals who are looking to "get rich" the first year of employment. People who are looking for an "easy job" that enables them to work only a few hours from home, in their underwear with no supervision.
Businesses that are serious about wanting to hire qualified people who are interested in a life long career are not going to run ads that say, "$150,000 first year commission, set your own hours and work from home, pre-set appointments and free leads provided, etc".
When an individual answers that ad and comes in for an interview they keep that same line of BS going by telling them that they get "excellent training", can win free trips to exotic places and show them commission statements that are $10,000 and over for one month of sales.
Think about the kind of person who is going to answer that ad, believe all that BS, and actually "sign on the dotted line". That is not the kind of person that I am going to invest a lot of time and money in, neither do the agencies and companies.
Is it any wonder that the first year drop out rate is extremely high? How high do you think it would be if the recruiter actually told the truth?
"First year commissions for a hard working, dedicated individual can be as high as $35,000 to $45,000. Names and phone numbers provided for prospecting, limited training available but must be a strong self starter and highly motivated., etc."
They seem to target low income, unsuccessful individuals who are looking to "get rich" the first year of employment. People who are looking for an "easy job" that enables them to work only a few hours from home, in their underwear with no supervision.
Businesses that are serious about wanting to hire qualified people who are interested in a life long career are not going to run ads that say, "$150,000 first year commission, set your own hours and work from home, pre-set appointments and free leads provided, etc".
When an individual answers that ad and comes in for an interview they keep that same line of BS going by telling them that they get "excellent training", can win free trips to exotic places and show them commission statements that are $10,000 and over for one month of sales.
Think about the kind of person who is going to answer that ad, believe all that BS, and actually "sign on the dotted line". That is not the kind of person that I am going to invest a lot of time and money in, neither do the agencies and companies.
Is it any wonder that the first year drop out rate is extremely high? How high do you think it would be if the recruiter actually told the truth?
"First year commissions for a hard working, dedicated individual can be as high as $35,000 to $45,000. Names and phone numbers provided for prospecting, limited training available but must be a strong self starter and highly motivated., etc."
The other interesting thing about the 'turn-over' rate is it depends a lot on where you start measuring from. If you look at college completion rates, do you measure from the point where people enter college, or from the time a baby is born? It will give you significantly different answers.
The dropout rate in this profession is much higher if you include everyone who starts the licensing process, but never writes the first policy. If you do this, the dropout rate probably is in the 90's.
I watch a lot of people come and go in the first 6 months. It's an easy profession to get into, it's a difficult profession for the first few years. You almost need a way to make a living while you get going, not different from starting any other business, but as Frank pointed out, that is never mentioned in any interviews.
This is not a profession that is for everyone. It will eat you alive if you let it, or if you survive, it will provide for you for a long time.
Dan
The dropout rate in this profession is much higher if you include everyone who starts the licensing process, but never writes the first policy. If you do this, the dropout rate probably is in the 90's.
I watch a lot of people come and go in the first 6 months. It's an easy profession to get into, it's a difficult profession for the first few years. You almost need a way to make a living while you get going, not different from starting any other business, but as Frank pointed out, that is never mentioned in any interviews.
This is not a profession that is for everyone. It will eat you alive if you let it, or if you survive, it will provide for you for a long time.
Dan
Al3x Lee
Guru
- 951
15-16 years later and you're still at it! I was in High School in 2007 lol. What do you think about the agent turnover rate now? Things have certainly changed since 2007
- 5,285
It's high, I know that. There are a lot of agencies that throw piles of agents at the wall to see who sticks. There are also a lot of people that look at my beautiful hair and spiffy cape, as well as my rock star lifestyle and white hot sex appeal of being a commercial insurance broker and want to get into the business - and later find out that it's not as sexy and glamorous as they think.
In all seriousness - I am a commercial p&c independent broker and I have been doing it for 11 years. I can tell you that while I know independent agents and agency owners that have succeeded, I have never actually witnessed an independent agent start off on their own and make it - every one has failed but me. Not some, not many, not most, but every one.
Probably the most reliabile numbers you will want to look at is how many new licenses get renewed, and how many don't. That may be the "purest" data.
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Fortunately, I did not fail any classes and was able to graduate with my class . . . otherwise we could have been classmates.
I haven't seen flame out rates for new agents in years but I doubt things have changed much. When I came up through the ranks we still had a relatively strong agency system with one on one training for the first 3 to 6 months.
Now it seems like the IMO/FMO system is more about lead gen and lead buying plus webinars. While it is good to have a lead gen system most new agents don't have the funds to support themselves and their business for more than 45 days.
Work ethic, especially since 2020 has been on a steady downhill slide.
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