5 Reasons Why People Run Away from Insurance Agents

In insurance one size, by no means fits all and the customer's needs have to be assessed based on their preferences, individual requirements and the risk appetite. Compared to other consumer services, Insurance is a bit complex and often require the involvement of an intermediary who can describe the choices and the benefits to the consumer and suggest the plan that best suits their unique needs. If we compare the distribution channels in the insurance sector, certainly insurance agency is one of the most dominant and leading contributor in terms of premium volume and the employment opportunities it generates.

Insurance organizations are sales driven and insurance agency as a career is a long-standing one, however sometimes it is tainted by distrust and bad reputation. This article highlights the details on why people run away from the insurance agents and will help agents to get back on the track.

Too Much Focus on Selling:

Most agents tend to focus too much on the selling rather than providing the solution to the customer. The agent to ascertain customers’ requirements and problems and then focus around it when suggesting an insurance product.

Unrealistic Expectations:

Due to the abstract nature of the product, insurance products are too much prone to -selling. Sometimes the insurance agents set up very high and unrealistic expectations while explaining the benefits of a product to the prospect. There are many agents who mislead the customer by exaggerating the coverage or inflating the returns that one can get on a policy to make it look lucrative.

A trustworthy agent should always look at with the customer and while it is necessary to strongly convey the benefits an insurance plan brings, there is a greater need to maintain a good balance as well.

Lack of Knowledge and Professional Development:

Normally the primary source of information for an agent is his sales manager. As there is an absence of other sources through which an agent can keep himself abreast with the latest trends and developments, an agent is as aware as his sales manager. Most of the insurance companies have failed to provide a continuous learning platform its agents through which they can learn about the industry news and development and keep themselves up-to-date. Most of the times, the agent is not able to create a desirable impact on the consumer due to lack of proper knowledge. They need to be aware about the different products available in the market and their unique aspects in order to present requisite choices to the customer.

Lack of Support from the Insurance Companies:

Compared to other channels of the Brokers and Banks, Insurance Agents often face step motherly behavior the insurance companies. This is for small and the new agents who don’t have the necessary negotiating power with the carrier.

Most of the promotional schemes run by the insurance companies are directed towards large agencies or the other distribution channels that bring large premium volume and the smaller ones are often ignored. This makes the big ones bigger and sometimes forcing the smaller ones to even vanish. I was reading somewhere that out of every four individuals who start an insurance agency two of them leave within the first six months due to lack of support from the industry.

Technological Developments:

The use of technology allows an intermediary to increase their reach to the buyers and create an element of trust among its customers. Apparently, insurance agency as channel hasn’t embraced and adopted technology to the extent other channels have done so far.

Most insurance agencies still don’t have the required web presence in the form of their personalized websites. The presence of a website has its own advantages and helps a business establish the much needed credibility. I think these days’ customers just assume that you have a website and the absence of it means that you are not much about conducting your business. Though there a quite a few options a website these days, there is a need to further simplify the process and make it available to the ones who cannot afford it i.e. who are at the bottom of the pyramid.

Written by Mr.Rajneesh Upreti