When you run an insurance agency, you have tremendous responsibilities. That includes hiring the right people who can help the company grow. Also, you want to provide your staff with training so they can consistently hone their skills and give them the tools and systems they need to perform their jobs optimally.

Unfortunately, there’s another responsibility that no business owner or manager enjoys: terminating employees. Regardless of the industry, that’s tough. However, if you’ve done everything possible to help a person change, but they still fail to meet the agency’s standards, you don’t have any other choice.

If you own or manage an insurance agency, that would include all support staff, managers, and the agents themselves.

The Right Time to Terminate

So, how do you know when you’ve reached that point? The following are some examples that show when it’s the right time to fire an employee.

Excessive Tardiness

Especially in the insurance industry, the only way for your business to grow and thrive is to have dedicated agents who work hard to sell new policies and renew existing ones. If someone’s constantly late to work, they’re doing your business a disservice. If you’ve spoken to the agent and given them more than one warning but don’t see any improvement, it’s time to let them go.

Tardiness among the support staff in your agency is just as big of an issue. For example, a receptionist who’s supposed to start work at 8 a.m. but doesn’t bother to show up until nine or later creates two problems. First, there’s no one available to answer incoming calls. Second, that means one of your agents has to pick up the slack. So, instead of selling policies, that person is fielding phone calls.

Stage Fright

To sell insurance, you want agents on your team who aren’t timid, afraid, or shy to assertively sell policies. When hiring someone new, there’s no way to tell how they’ll do in an actual work scenario. Unfortunately, the only real way to gauge an employee’s performance is to watch them after you’ve brought them on board.

You might have a brilliantly minded and creative agent who comes up with some incredible ideas. This person also works hard and genuinely wants to do a great job. Even so, they also have “stage fright.” For them, meeting with prospects and existing clients is beyond awkward and scary. For an employee like this, you want to provide them with every opportunity possible to improve.

However, if you’ve sent them to training, given them plenty of pep talks, and even tried to find another position in your agency for them, all without luck, you’ll need to let them go. As sad as it is, this scenario is not that uncommon in the business world.

Unacceptable Behavior and Attitude

Your employees are a direct reflection of your insurance agency. One person’s poor behavior and attitude could prove devastating to your business. You want team players, people who get along and respect each other as well as their clients. An employee who acts out can quickly and dramatically affect employee morale. In turn, that can have a significant impact on sales and the client’s satisfaction.

Drama King or Queen

As the owner or manager of an insurance agency, you want to show empathy to your employees. After all, everyone is human, and sometimes life deals some pretty hard blows. So, you can expect someone to bring their personal life to work from time to time. However, when you have an employee who’s a bona fide drama king or queen, it’s time to terminate them. Typically, this shows that the employee is more interested in themselves than your agency.

Failing to Abide by the Agency’s Standards

You know you need to fire an employee if they blatantly disregard the standards you’ve established for the agency. These rules and regulations serve multiple purposes. For instance, rules streamline operations, and they can prevent your business from getting penalized by an employee who violates the law. You can’t afford this kind of liability.

Set Your Employees Up for Success

To run a successful insurance agency, you need to do everything in your power to provide your employees with what they need to achieve great success. Again, that consists of hiring the right talent, providing training, having honest and open communication, and giving them the necessary tools and systems. A perfect example of this is an insurance agency management software program.

This type of insurance agency software benefits support staff members, insurance agents, and clients. When you select the right software, you’ll find that your business operates far more effectively and efficiently. Most important, choose a system that your employees can learn to master quickly and go with a reputable source that offers tremendous support during the learning phase and after.

After doing all this and giving an employee ample notice that they need to correct something but to no avail, it’s your responsibility to fire them. Although this might require some firmness on your part, terminating someone doesn’t equate to acting mean or judgmental.

No, firing an employee is never what you want to do, but there are times when you’re left with no other choice. The bottom line is that you have a business to run. If you want to see it thrive, you need an outstanding group of employees who work as a team and respect the agency as a whole.

Considering that laws exist to mandate insurance coverage for homes, automobiles, and other possessions, you wouldn’t think agency owners have a hard time growing their business. However, this particular industry is highly competitive.

That’s why insurance agencies need to adopt proven strategies to help them stay ahead of the curve. If you own or operate an insurance agency, the following options work amazingly well to build a stronger client base, which equates to generating more revenue.

It’s All About Technology

Perhaps the best way to grow your agency is to update your current software. Today, you can find insurance agency management systems that help agencies run more efficiently and effectively.

As a prime example, rather than manually search for or fidget with an old program to find better and more affordable coverage for an existing policyholder, current technology performs this and many additional tasks automatically.

The right system will keep everyone in your agency organized, send alerts so that no one misses a key appointment, handle billing, and even assist with marketing efforts. Overall, updating your agency’s management system will create an opportunity to better connect with prospects and current clients.

Adopt the Right Mindset

Unfortunately, some insurance agency owners feel intimated by growth. While they want to see their agency reach a new level of success, if that means stepping outside of their comfort zone, they’re hesitant to take risks – even calculated ones. So, another proven way to grow your insurance agency is by adopting a new mindset.

Remember, there’s always someone who can answer your questions and provide guidance as you move through uncharted territory. This is also another way that updated technology can help. With almost everything you need at the push of a button, there’s nothing to fear. Instead, embrace change so that you can see your vision come to fruition.

Set a Definitive Goal

Having an idea and setting a goal are two different things. To grow your insurance agency, you need to take your ideas, turn them into a definitive goal, and tackle them head-on. Your goal can cover many different aspects of insurance, and you may even establish more than one goal.

For instance, you probably want to focus on increasing the number of policyholders that your insurance agency handles. For that, you need a definitive marketing goal, something designed specifically for the industry. Another goal might entail improving communications between your agents and clients. In that case, you can again utilize a more advanced software program and provide in-depth training.

Identify Your Client’s Pain Points

If you aren’t aware, pain points are things that cause your clients to stress. Usually, they have to do with inadequate coverage, expensive premiums, a labor-intensive claims process, and so on. Although every client has unique pain points, by doing some analysis, you’ll quickly identify several things they all experience.

By understanding the primary pain points allows you to develop a strategy to either eliminate or reduce them. Once again, with the right technology, you can enter valuable data about your clients to better understand the areas of your agency that need improvement.

Refine Your Agency’s Sales Strategies

Especially if you’ve been in the insurance industry for a long time, there’s a good chance you’re still following old guidelines that aren’t effective today. This particular industry is ever-changing. For that reason, you also need to change the way you and your agents sell policies.

For this, you can find a wealth of information online. You can also listen to podcasts hosted by respected industry leaders. Take advantage of every avenue possible so you can refine your current strategies.

Broaden Your Knowledge Base

As stated, the insurance industry constantly evolves. That means there are always new things to learn. The key is to avoid getting too comfortable with what you know so that you can broaden your knowledge base. Ultimately, this will allow you and your agents to make better and long-lasting connections with clients. In turn, you’ll begin to see substantial growth.

Don’t Overlook the Value of Content

One thing that every successful insurance agency needs is a professional website. If your agency doesn’t have one, it’s worth the investment to have one designed that perfectly showcases your business, products, and agents. As part of that, you want content that’s informative, interesting, useful, and enticing.

The goal is to draw prospects in and then offer them information that will encourage them to inquire about your agency or purchase a policy. What it comes down to is that an excellent website is a powerful marketing tool.

Remain Staff-Centric

In simple terms, that entails building a team of goal-oriented agents. Sometimes, agents come onboard with existing experience. However, if you have a novice agent who’s eager to learn, this is where training can help that individual become one of your top sellers. When hiring, look for people with a positive attitude and a lot of drive.

Don’t Shy Away From Outsourcing

Sure, you probably want to handle everything in-house. However, if you need a specific skill or have a particular task performed that’s beyond your or your agents’ capabilities, don’t feel nervous about outsourcing. As an example, you might want to hire a professional trainer rather than allow someone on your team to do the training.

Most people know that insurance agents work off commission. That means they get a specific percentage of the sales they make, which comes from the premiums the clients pay. However, there are different insurance agent compensation models, some good and others not so good.

If you own an insurance agency, selecting the right model isn’t a quick or straightforward decision. For this, you need to consider all the information provided. Then you can set up the appropriate compensation model for your agency.

Types of Commission Models

For the insurance industry, agents get paid commission or a percentage of the premiums for the policies they sell. There are three primary compensation models that agencies follow. These include Residual, Upfront, and Renewal:

Residual

Residual commission payments connect directly to premium payments. That means, at the time an agent closes a deal, they get paid a percentage. However, they receive a further commission whenever the client renews the policy, albeit at a lower percentage rate. Although not always, residual commission payments are the most common for automobile and health insurance policies.

Upfront

Upfront insurance commission payments are quite different. Typically, they’re associated with life insurance, including whole life and annuities. On average, an agent earns 10 percent of the premium purchase, although that can go much higher.

In this case, an insurance agency owner determines the amount of the payment the agency keeps versus what’s passed on to the agent. For larger agencies, the payments often get split between several management tiers. The greatest benefit of upfront commission is that it encourages agents to work even harder to sell policies.

Renewals

Just as the name applies, the renewal compensation model means that agents receive a percentage whenever a client renews a policy. However, this is usually only 2 to 5 percent of the premium. While it’s not a significant amount of money, an agent with many renewals or renewals of high-priced policies can earn quite a bit more.

Defining Factors

However, the way that insurance agents get paid also depends on several factors, including the type of insurance sold.

Life Insurance

Long-term insurance policies, including life, typically last a minimum of 10 years. Therefore, agents earn a healthy upfront commission. Usually, new policies equate to 40 percent on the first year’s premium. Then for renewals, the percentage drops significantly.

It’s important to note that state laws regulate insurance agencies. For that reason, rules vary from one state to another. Also, many states limit the number of policy renewals an agent can earn commission on. In some instances, commissions stop once a policy hits its 10-year mark from the date of sale.

For life products, different commission structures exist.

• Heaped – This is the common choice for agencies that sell individual life insurance. As stated, an agent makes the highest commission from selling the initial policy and less for renewals.
• Level – With this, an agent earns the same commission for both first-year and renewal periods. Typically, this is for group life insurance policies.
• Levelized – An agent makes a higher commission on the first-year premiums and less on renewals for group life products. However, the difference with this structure compared to the heaped structure is that the percent for renewals is higher.

Health Insurance

The compensation model for health insurance is similar to long-term (life) policies. So, an agent will make the highest commission after selling a policy and then a lower commission upon each renewal. The primary difference is that most health insurance policies expire in about three years.

Property & Casualty Insurance

For casualty, automobile, home, and other property insurance, policies don’t last nearly as long as the other two mentioned. For that reason, the commission model consists of a much lower percentage. Generally, this ranges between 5 and 20 percent, again with renewals even less.

Additional Variables

Along with the type of insurance are more variables that determine how much commission an insurance agent makes.

• Client Support – This includes the support an agent provides to a client when selling the first policy and after. Excellent support entails building relationships with clients, keeping in touch, providing them with options for new coverage or saving money, and so on.

• Lead Generation – If an agent generates all their leads, they’ll often earn a relatively high commission. However, if an agency implements a software program that helps generate leads, the commission might drop somewhat.
• Marketing Strategies – In some instances, an agency will invest in a tool that improves overall marketing efforts. That could be an innovative software program or a professionally designed insurance agency website. Just as with lead generation, this can cause an agent’s commission to drop. However, it also opens the door for building a stronger client base, which equates to more business and, therefore, more commission.
• Partnerships – If two agents tackle one client as a team, they will split the commission. Although this isn’t overly common, it does happen, especially when targeting a large client.

Choosing the Best Model for Your Agency

Now, you need to decide on the right compensation model for your insurance agency. You want to attract talent by offering agents an excellent way to earn a top commission. You also want to keep great agents by doing the same thing. So, the model you select can play a big role in the success of your business.

Take time to understand and analyze the different compensation models, types of insurance, and the various factors mentioned. That will help you choose the best option for your agency and agents.