Insurance agents and brokers sell insurance policies to individuals and businesses to protect against financial losses and to provide for future financial needs. They sell one or more of the three basic types of insurance: life, property-liability (casualty), and health.
An agent may be either the employer of an insurance company or an independent representative of one or more insurance companies. A broker is not under contract to a specific insurance company or companies but places policies directly with whichever company can best serve the needs of a client. Both agents and brokers spend the largest part of their time discussing insurance needs with prospective customers and designing insurance programs to fill each customer's individual needs.
Life insurance agents and brokers (life underwriters) sell policies that provide payment to survivors (beneficiaries) when the policyholder dies. A life policy can also be designed to provide retirement income, educational funds for surviving children, or other benefits.
Casualty insurance agents and brokers sell policies that protect against financial losses from such things as fire, theft, and automobile accidents. They also sell commercial and industrial insurance such as workers' compensation, product liability, and medical malpractice.
Health insurance policies offer protection against the cost of hospital and medical care as well as loss of income due to illness or injury and are sold by both life and casualty agents and brokers.
More and more agents and brokers are becoming multi-line agents, offering both life and property-liability policies to their clients. Some agents and brokers also sell securities such as mutual funds and variable annuities or combine a real estate business with insurance selling. Successful insurance agents or brokers are highly self-motivated. Anyone interested in this work as a career should be aware that many beginners leave the field because they are unable to establish a large enough clientele. For those who succeed, the financial rewards are usually very good.
Recognizing that the professional working woman represents a new market, the insurance industry has recently been designing insurance programs to meet her special needs. The need for women insurance agents and brokers to service these new clients has expanded, and some insurance companies are actively recruiting women for their sales forces. While some companies hire only college graduates, others are interested in women with experience in sales, business, and finance.
Places of Employment and Working Conditions
Insurance agents and brokers are employed throughout the country, in all locations and communities, but the largest number work in or near large population centers.
Agents and brokers are free to schedule their own working hours but often work evenings and weekends for the convenience of their clients. In addition, hours devoted to paper work and continuing education often add up to much more than 40 hours a week.
Agents and brokers usually pay their own automobile and travel expenses. If they own and operate their own agency, they also pay clerical salaries, office rental, and operating expenses out of their own incomes.
Qualifications, Education, and Training
Agents and brokers should be enthusiastic, self-confident, and able to communicate effectively. They need initiative and sales ability to build a clientele and must be able to work without supervision.
Many insurance companies prefer a college degree (in almost any field) but will hire high school graduates with proven ability or other potential. Courses in accounting, economics, finance, business law, and insurance subjects are the most useful, whether the agent works for an insurance company or is self-employed.
New agents receive training at the agency where they will work or at the home office of the insurance company for which they work. Much of this training involves home study courses.
All states require agents and most brokers to be licensed. In most states, this takes the form of a written examination covering state insurance laws. Insurance companies often sponsor classes to prepare their new agents for the licensing exam, while other new agents study on their own. Some trade and correspondence schools offer courses for insurance agents.
Agents and brokers who wish to succeed in this field are constantly studying to increase their skills. They take college courses and attend educational programs sponsored by their own company or by insurance organizations.
The Life Underwriter Training Council awards a diploma in life insurance marketing after successful completion of the council's two-year life program. The council also sponsors a program in health insurance. Experienced agents and brokers earn the chartered life underwriter (GLU) designation by passing a series of examinations. Property liability agents receive the chartered property casualty underwriter (CPCU) designation in the same way from the American Institute for Property and Liability Underwriters.
Potential and Advancement
Employment of insurance agents and brokers is expected to grow by about 9% between 2014 and 2024, according to the Bureau of Labor Statistics. Although sales volume should increase rapidly as a larger proportion of the population enters the period of peak earnings and family responsibilities, the employment of agents and brokers will not necessarily grow as rapidly as sales volume. This is due to the fact that more policies will be sold to groups and by multi-line agents and because more of an agent's time-consuming paper work will be done by computer, releasing agents to spend more time in actual selling and client contact.
Promotion to positions such as sales manager in a local office or to management positions in a home office or agency is open to agents with exceptional sales ability and leadership. However, many agents who have a good client base prefer to remain in sales with some establishing their own independent agencies or brokerage firms.
Income
Insurance agents and brokers usually work on a commission basis. Beginners are often provided with a moderate salary for about six months until they complete their training and begin to build a clientele.
According to the US Bureau of Labor Statistics, the median annual wage of insurance sales agents was $48,200 in 2015, Many independent agents are paid by commission only. Sales workers who are employees of an agency or an insurance carrier may be paid in one of three ways: salary only, salary plus commission, or salary plus bonus.
In general, commissions are the most common form of payment, especially for experienced agents. The amount of the commission depends on the type and amount of insurance sold and whether the agent has met set goals and targets. Most agents work full time and some work more than 40 hours per week.
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