We've all seen the upheaval the last few years . I think several things are all coming together at once to make the carrier profit margins that were already very low even lower. #1 inflation the last 4 yrs after covid is around 20% . That's goods and services . Yet few of these carriers have raised there rates more than 5-10% . #2 i think overall persistency for fe carriers is lower than 3-5 yrs ago. I believe this is mostly due to the huge upswell in telesales the past 3-5 yrs and especially the last 2 yrs . 5 -7 yrs ago most decent social media leads were $20-$35 each. Now many people are getting leads at $5-$10 each . The huge groundswell of fe type clients on social media has conservatively gone from 15% 7 yrs ago to 70% now . Many the grandkids set up the account. Think about it Ruth gets up at 11-12 every day and has nothing to do. Getting on facebook keeps them busy 3-5 hrs a day . Going around the net they have nothing to do but press ads . Thus the massive lead flow available for online leads.Only problem many press 10 ads a week . I must have seen 100 podcast's the last month on youtube with podcasters having on " John's been in the business 3 months and did $60k this month" . Agency's left and right showing there top 10 agents doing $25k or more a month . I'm talking 50-100 agency's showing this . You don't have to be somewhat suspicious asking " Is there enough prospects for all these agency's to be doing this type business ? The answer is just like low income mapd telesales they're either replacing each others business or people lapse with one agency and another agency writes it .Throw in every agency under the sun with "free leads" to attract agents like a bee to honey . The agency's profit margins are so big that even with 65-75% persistency the profit is eye popping . BUT the carriers profit assumptions are built on 80-85% persistency . Thus we've seen many carriers exit the business as they can't make money. I'm certainly not sales all telesales agency's have low persistency but there's a great many that do and its hurting carriers I believe .
What’s really happening in the fe business the last 2 yrs ?
- Thread starter DonP
- Start date
- 17,076
Five years ago agents were buying avatar leads at $4 each.
Inflation doesn't affect life insurance much but low interest rates did for several years.
Inflation doesn't affect life insurance much but low interest rates did for several years.
- 19,652
You hear stories about all that production but the companies have never heard of those agents.
They aren't earning company trips either. How does an agent write $300K per year for 3-4 years in a row and the companies don't know who they are?
Some are legit and most everyone in the FE world knows who they are and the companies know who they are too.
The rest are just lying. I asked one of those recruiters once about his claimed production which I knew was not true if anyone ever asked for verification of his claims. He said "never!".
The sky is not falling in the FE world.
And the true FE market is not on social media. I can't even remember the last time one of my applicants had an email to do the eApp when required. I've had to create emails for them and I'm sure they never use them again.
I do have far more than ever that will text. Probably the people that the telemarketers are targeting have emails and use social media. But those aren't really the FE demographic anyway. And putting those people in FE policies when they can do so much better is going to lead to low persistency once they get educated on what they bought.
They aren't earning company trips either. How does an agent write $300K per year for 3-4 years in a row and the companies don't know who they are?
Some are legit and most everyone in the FE world knows who they are and the companies know who they are too.
The rest are just lying. I asked one of those recruiters once about his claimed production which I knew was not true if anyone ever asked for verification of his claims. He said "never!".
The sky is not falling in the FE world.
And the true FE market is not on social media. I can't even remember the last time one of my applicants had an email to do the eApp when required. I've had to create emails for them and I'm sure they never use them again.
I do have far more than ever that will text. Probably the people that the telemarketers are targeting have emails and use social media. But those aren't really the FE demographic anyway. And putting those people in FE policies when they can do so much better is going to lead to low persistency once they get educated on what they bought.
- Thread starter
- #4
I disagree 10000% on this . And the reason i know this is simple . Any time you talk to someone on the phone facebook picks that up and they appear under " possible friends " . Since I'm massively on the phone answering 15-20 calls a day I'm shocked the amount of clients that show up. Many can hardly write and they have facebook accounts . Also 65% of fe clients ages 50-70 have emails now . And certainly 85% can text . The advertisements come by text too. With company's like Aetna ,GTL, am am they don't need emails
- Thread starter
- #5
Just ponder what you texted . Inflation might not affect those buying but it sure as heck affects carriers profit . If your expenses went up at least 20% over a 3-4 yr period and your rates only went up 5-10% how could that not affect the bottom line ? Sure you can cut costs a little but i won't make up for that big a shortfall
- 19,652
You can disagree all you want.
It's ok to be wrong.
You don't work this space. I do.
You are not in contact with agents everyday working this space. I am.
And we are thankful for your message to agents.
And you did need email with Aetna too. That's how you sign the app now.
You can use yours if they don't have one. And I usually have to use mine because they don't have email.
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- 4,130
Avatar leads, man they were legit good.
- Thread starter
- #8
You don't need an email with Aflac or accendo as far as recall on telesales . Jd I work this space as hard as any agent in the country .Wether I sell Medicare or fe it's irrelevant ( I still pop 10-15 fe a month ) . I work the exact same low income . I guess all those millions answering fe Facebook ads are different people than fill out the direct mail cards ?
- 5,309
My opinion:
1. FE went through a bubble phase with FFL and other MLMs bringing in hordes of new agents from 2018 to 2022.
2. Carriers who saw the run up in interest but didn't understand final expense got into the game during this time.
3. Carriers with subpar products got their asses handed to them over the past few years.
4. Telesales became the majority market, and carriers came to market with application processes with gaping holes prone to fraudulent activity.
To do FE right, carriers in the market or thinking about getting in should:
1. Get billing down to an exact science. You MUST beat the prospect to the ATM, every. single. month.
2. Only take bank draft. No more Direct Express, Netspend, Chime, and other lapse-o-matic business. It's all shit business.
3. Don't offer guaranteed issue. It's all shit business.
4. This is crucial - don't get hot and bothered over a large distribution channel. Do what American Amicable and what KSKJ did. Find small to medium sized organizations focused on doing a quality job selling insurance and partner with them. The right kind of growth is always better than a ton of the wrong type of growth.
5. Get serious about back office auditing of new business. Aggressively screen new business for potential fraud.
1. FE went through a bubble phase with FFL and other MLMs bringing in hordes of new agents from 2018 to 2022.
2. Carriers who saw the run up in interest but didn't understand final expense got into the game during this time.
3. Carriers with subpar products got their asses handed to them over the past few years.
4. Telesales became the majority market, and carriers came to market with application processes with gaping holes prone to fraudulent activity.
To do FE right, carriers in the market or thinking about getting in should:
1. Get billing down to an exact science. You MUST beat the prospect to the ATM, every. single. month.
2. Only take bank draft. No more Direct Express, Netspend, Chime, and other lapse-o-matic business. It's all shit business.
3. Don't offer guaranteed issue. It's all shit business.
4. This is crucial - don't get hot and bothered over a large distribution channel. Do what American Amicable and what KSKJ did. Find small to medium sized organizations focused on doing a quality job selling insurance and partner with them. The right kind of growth is always better than a ton of the wrong type of growth.
5. Get serious about back office auditing of new business. Aggressively screen new business for potential fraud.
- 5,309
Joey, there's 56 million people aged 65 and over. Probably half(?) are under 50,000 a year in household income. How many of them buy multiple policies throughout their lives, drop other policies due to financial strain, etc.? The market is enormous. Plus there are always millions of new people aging in every year.
