INSURANCE SALES AGENT California Occupational Guide Number 455 Interest Area 8 1995
THE JOB
Insurance provides protection against future financial loss from injury, illness, death, property damage, or theft. INSURANCE AGENTS sell insurance policies to individuals, families, business firms, and other groups. In addition, agents provide a variety of services for their customers, ranging from pre-sales counseling to help in filing claims. Most Insurance Agents specialize in either life and disability insurance or property and liability insurance (also called casualty insurance). An increasing number of agents sell both types.
Many sales agents, particularly those in the life insurance field, represent one company exclusively. They are known as direct, career or general agents. Others, called independent agents, represent a variety of companies. Generally, independent agents specialize in casualty insurance. There is a growing trend, however, for both types of agents to offer a full range of insurance, as well as other financial services, to their clients.
When interviewing prospective clients, Insurance Agents obtain data about the client's financial resources and needs, and the physical condition of the person or property to be insured. They also compare present coverage, if any. Agents then work out an insurance program, often covering a variety of risks, suited to that customer. They explain the program's costs and benefits, and attempt to write a policy. If their selling effort is successful, agents draw up the appropriate applications and submit them to the company.
Agents also provide continuing follow-up services. They keep in touch with clients, handle policy renewals, and suggest additions or changes to keep the coverage up-to-date.
Agents frequently talk with company underwriters or claims representatives about their clients. They also meet with company field representatives to learn about new products and services and to receive technical assistance in developing new accounts.
There are some independent agents operating offices that have spent considerable time implementing data processing procedures. However, once the initial work is done, record keeping and other tedious paper work is reduced, and more time is available to spend on sales activities.
WORKING CONDITIONS
Some Insurance Agents spend much of their time outside the office, contacting or interviewing customers; others transact most of their business on the telephone. Independent agencies tend to be relatively small, while general agencies representing one large company are often substantially larger. Many agents belong to professional organizations such as the Independent Insurance Agents Association, or the National Association of Life Underwriters.
EMPLOYMENT OUTLOOK
The following information is from the California Projections of Employment published by the Labor Market Information Division.
Estimated number of workers in 1990 29,250 Estimated number of workers in 2005 35,390 Projected Growth 1990-2005 21% Estimated openings due to separations by 2005 12,330
(These figures do not include self-employment nor openings due to turnover.)
Growth in this occupation will occur at an average rate through 2005. An increasingly older population, more inclined to purchase life insurance and other financial products, coupled with a growing overall population, will drive propel the growth in the number of sales agents.
Due to the intense competition, beginners sometimes become discouraged in their efforts to build a clientele. For this reason, companies are screening prospective employees with an eye toward selecting those candidates with the greatest likelihood succeeding in the competitive business environment. However, opportunities should be favorable for ambitious people who do not become easily discouraged.
WAGES, HOURS, AND FRINGE BENEFITS
Many Insurance Agents become self-employed after an initial training period. This training period lasts about three years. During this training period, agents are employees of an insurance company. They receive an average base salary, which ranges between $1,275 and $2,000 per month, and often receive commissions on their sales as well. When they become self-employed, their earnings depend on commissions, bonuses and incentives. The sales agent's income is limited only by the amount of insurance he or she sells. The average wages for experienced agents range between $27,000 and $100,000 per year.
Some Insurance Agents are paid a salary instead of commissions. Wages for salaried agents range from about $5.00 to $10.00 per hour to start, and can reach $30.00 per hour after many years of employment.
The hours are flexible, with evenings and weekend appointment scheduled for the client's convenience. In their early years, Insurance Agents often work in excess of 60 hours a week; established agents may work fewer than 40 hours.
Fringe benefits for Insurance Agents working for a single company include group life and health insurance, pension and profit-sharing plans, and sometimes office and clerical help. Some independent agents get employee benefits or help with operating expenses. Most agents pay for their travel expenses.
ENTRANCE REQUIREMENTS AND TRAINING
Agents working for a single insurance company generally start as trainees. Increasingly, they are expected to have a college degree and sales or business experience. After passing a series of interviews and sales aptitude tests, successful applicants often go through a period of pre-contract training, on their own time with no pay. During this period, they study for the required agent's license. Some independent agents, especially those who have schooling in insurance, start as solicitors, working as employees of independent agents to obtain experience in selling causality insurance. Others start by working for insurance companies in other capacities, such as underwriter or field marketing representative.
Before becoming an agent or a solicitor, a license from the State Department of Insurance is required. Pre-licensing and continuing education is now required of all licensed Insurance Agents. Prior to taking the appropriate written examination, applicants must submit an appointment from an insurance company, agent, or broker agreeing to appoint them after they are licensed. Some independent agents also take an examination to become brokers; this allows them to transact insurance with any company, even those for which they are not appointed agents. In addition, agents who wish to sell other financial services may take the examination given by the National Association of Securities Dealers (NASD).
Prospective Insurance Agents should display initiative, diligence, self-confidence, and outgoing personalities. Active participation in a variety of civic, social and religious organizations will give potential agents the contacts needed to make sales and establish themselves in business. In addition, they need to communicate effectively and to grasp legal and financial concepts.
ADVANCEMENT
Agents working for insurance companies may become district sales managers or regional agents, or join the home office marketing staff. Independent agents often become licensed as brokers and may become account executives in brokerage firms, representing large commercial accounts. However, many agents prefer to remain in sales after they build a good clientele and substantial income.
It is advantageous for a sales agent to earn professional designation as a Chartered Life Underwriter (CLU) or a Chartered Property and Casualty Underwriter (CPCU) and Certified Insurance Counselor (CIC). Classes to help prepare for the required examinations may be sponsored or paid for by their employer. These designations are recognized marks of achievement.
FINDING THE JOB
Persons interested in Insurance Agent positions should apply to insurance company sales or personnel offices. They should check newspaper advertisements, and register with the California Employment Development Department Job Service and with private employment agencies specializing in insurance occupations. Many companies also recruit on college campuses.
ADDITIONAL SOURCES OF INFORMATION
California Department of Insurance 700 "L" Street Sacramento, CA 95814 (916) 445-5544
Insurance Brokers and Agents of the West 101 Market Street, Suite 702 San Francisco, CA 94105 (415)957-1212
RELATED OCCUPATIONAL GUIDES
Insurance Underwriter No. 55 Insurance Adjusters, Examiners & Investigators No. 67 Real Estate Agent No. 90
OCCUPATIONAL CODE REFERENCES
DOT (Dictionary of Occupational Titles, 4th ed., Rev. 1) Sales Agent, Insurance 250.257-010
OES (Occupational Employment Statistics) System Sales Agents And Placers -- Insurance 430020
Source: State of California, Employment Development Department,
Labor Market Information Division, Information Services Group,
(916) 262-2162.
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