Understanding Your Insurance Business

Being an Insurance agent means being in business for yourself. You must run a self- contained business that exists to make a profit. In order to do that effectively, an agent must make the following changes in their business practices.

1) Understand that Insurance companies know how to operate their business – When an agent is hired to work for most insurance companies he is hired on a commission basis. He incurs immediate expenses (getting a license, supplies) and is expected to spend money on things like leads, gas to get to appointments, etc. The Insurance company has very little invested into a new agent because most training for new agents is now online and for some companies an agent is expected to sell his “warm market” and split the commissions he earns from his family and friends with his manager.

2) Businesses must know how to control expenses – Expenses are just that;expenses. Since agents receives no salary or benefits they must not only cover their living expenses but they must spend money on working until they (hopefully) begins to make some commissions.

Keep in mind most agents make little to no money selling insurance. The insurance companies have grown richer through the years but the agents overall have not. Sure there are successful agents in most companies but overall agents have not been able to sustain their lifestyle while selling insurance full- time.

2) Businesses exist to make profit – If you are not making a profit, you will not stay in business. The key for an agent is to operate profitably. You must take into account all expenses in order to run your business if you hope to operate profitably.

3) Businesses exist to create and keep a customer- repeat business is the key to long- term success. The most expensive customer to obtain is the one you don’t currently have. So agents must focus on making all customer interactions a pleasant experience. This means giving all new prospects an excellent presentation and all present customers great customer service.

When agents do this they increase their chances of getting a referral. Referrals can make sales a lot easier because you eliminate your lead costs. And a happy customer who refers a client to you will usually convey their happiness as they make the referral.

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