My thoughts on life insurance agents
By Randell Tiongson on August 6th, 2010When I was still in Life Insurance Sales (in Agency) what seems to be eons ago , I felt that there was a great need to start evolving our practice. In fact, I have given several talks on the said topic in several agencies from different companies aside from the company I used to represent. I remember saying that if we don’t move away from the way we do our business from ‘pushing’ products to providing solutions, we may one day find ourselves ‘obsolete’… so to speak. It is a known fact that many life insurance agents are very ‘pushy’ in the manner of selling their products. Shedding the negative image of the typical life insurance agent was a particular challenge for me when I was starting. The 90’s would seem to be the golden years of the life insurance agents as we experienced much growth (at least for the company I represented) but towards the late 90’s I felt that it was time to change the way we practice our profession. Many of the Insurance Companies were not part of the solution but may also be part of the problem… many stuck to very ‘traditional’ approaches of merely emphasizing the sale of products and nothing more. Issues of misrepresentation, influence selling, and the like were proliferating and was adding to the negative impressions of life insurance agents.
I believe that the industry went through some great changes in the 80s with the establishment of the Life Underwriters Association of the Philippines (LUAP) — it paved the way in drastically improving the image of the insurance agents, which ushered the ‘golden era’ of the 90’s. However as the new century came, the professional agent went through a lot of challenges — policy yields, dividends, commissions started to drop while the competitive environment became more unforgiving.
The need and value of Life Insurance did not change. Now more than ever, people should have the benefit of financial protection only a life insurance policy can give. It is important to note that having a life insurance coverage is the beginning of the financial planning process and as our population yearn to achieve financial stability, it should be reflected in the increasing number of people buying life insurance. However, it is perceived that the growth in the number of insured individuals are not even catching up with the growth of population. The number of professional agents should be even growing with the supposed increase in demand… but it isn’t. I feel that there is a great need for change… pretty much when many concerned parties advocated needed changes in the 80’s — and this change should be initiated by the professional agents themselves, just like in the 80’s. Don’t get me wrong, there have been milestones already.. I see more Financial Planners (in deed, not just in name) now… we just need more, way more.
Let’s look at hard facts… total premiums are still growing but where did the growth come from? 2 major reasons contributed to growth — Variable (Unit-linked) Life and Bancassurance. The current bull run in the Philippines made the new product very encouraging… double digit growth rates would really attract a lot of people. I dare say that the number 1 selling strategy of many practitioners is anchored on the performance of the investment-linked funds. Bancassurance allowed Banks to start selling insurances in their own branches… believe me when I say that selling in the banks is way ‘easier’ but that’s another topic. Hmmm, how much is bancassurance’s market share lately? A lot… as in a lot! The sad part is, although there are growth in total premiums, it really is still a drop in the bucket. The increase in absolute premiums was not driven by the increase in number of new family heads being insured but rather by the 2 reasons I mentioned earlier.
My question… what happens now as we are faced with a very volatile market — wiping all those gains or at the very least, tempering growth rates? Remember the times when some pooled funds were giving -30%? That wasn’t too long ago. What if Bancassurance completely dominates the environment? What then is the future of the Professional Life Insurance Agent?
My answer? Create VALUE! The Professional Life Insurance Agent would be of great value to the insurance company and the clients because he can provide better service, better advice if he is genuinely true to his profession. The professional agent should make himself very valuable; upgrade his skills, move away from the very traditional ways of selling as they are now turning off clients. Where ‘soft’ skills were enough to make a sale before, hard or analytical skills are just as important nowadays. This is important if the life insurance agent is to survive the onslaught of many changes.
The Professional Agents should lead in these changes. They should not wait for their insurance companies to do it for them. Bring ‘professionalism’ to a different level, an evolution in the truest form. Upgrading of skills should be foremost in every life insurance agent’s priority list. Technical knowledge should be at par with good selling skills. I’ve met many who experienced success in their sales when they started evolving — we just need to see more, more, more of them. Our professional organizations should also be in the forefront of changes — their conventions are still the same, mostly about ‘soft skills’.. and it’s as if motivation is the only thing that is important. In the last insurance convention I attended, I did so to check if the ‘quality’ of the conventions changed. Well, it is still the same — same speakers, same topics, same format.
Well, these are just my thoughts. I’ve spent many years in the frontline for me to write this article. I strongly believe in the Professional Life Insurance Practitioner… I strongly believe in Life Insurance. I hope that what I wrote here will plant the seeds to openly discuss this concerns.. we need to start talking about it and doing something about it.. again, and again. Maybe it is time for me to once again go back into Life Insurance Sales so I can practice what I preach — not really, I think I’ll just stick to advisory and planning services, haha.
To buyers of life insurance policies, be very particular when you chose your agent – look for someone who is very competent and someone who will really take care of your needs for a long time, a true Professional. Doing so will help force my friends in this industry to evolve faster.
very interesting article. but how do you know how much coverage you really need because the insurance agents often “bloats” the figures in their calculation so that their commissions increase as your premiums increase? also, should we stick with just one insuarance company or have several of them?…
Thank you for your article. It made me reflect on my own professional development from a life insurance agent starting in August 1973 when I passed the OIC Exam to who/what I am (doing) now.
I want to share with you and possibly your readers what I learned during my early years and what I think were the ingredients that made me “successful” in the business.
There are 5 Ingredients to Professionalism which every life insurance agent should aspire for in order to become a true professional (i.e., a problem-solver/solutions-provider; one who puts the interest of the client first before his own; one who prescribes the right financial solution or financial mix instead of pushing products that will make one earn higher commissions).
1) The will to learn.
Continuous learning and upgrading of one’s knowledge and skills.
The best-paid lawyers, doctors, architects never stop studying and reading. All development is self-development. When one stops learning, he starts to deteriorate.
During my active practice as a life insurance agent, I invested a lot in books and seminars … and studying competition…and the whole financial services industry which wasn’t in vogue then because there was a clear dividing line between the life insurance industry and the banking/investment industry. I also took up courses in CLU; CFP and ChFP through correspondence course or whenever I was in the US.
2) The need to intern.
Every professional goes through internship. The architect starts as a draftsman; the junior lawyer researches for the senior partner of the law firm; the doctor goes through several years of internship. Internship also means being under the wings and learning at the feet of a mentor who has notched years of experience in his professional practice.
I had the good fortune of being mentored, by the best and brightest professionals in the industry then: Douglas McLaren, Jorge Ledesma, Benny Ong, Joe Gandolfo, Norman Levine, Jr., Thomas Wolfe; Ben Feldman and the Kinder Brothers.
3) The sense to specialize.
Every professional practitioner has a specialization. For doctors, there are surgeons, neurologists, internists, cardiologists, OB-GYNE, etc. For architects, there are specialists in residential architecture, landscape, malls and commercial spaces, green buildings, etc. For lawyers, there are those who specialize in taxation, corporate law, family law, criminal law, election laws. Unless an insurance agent specializes in something, he has a very slim chance to succeed.
In my active years, I specialized in Wealth/Estate Planning and Business Insurance. I had a team composed of a tax lawyer, a banker/trust/investment specialist, and a CPA. I also focused on an underserved yet very lucrative market…family-owned businesses where I differentiated myself from the life insurance product pushers to being a Family Business Advisor.
4) The need to fraternize.
Every professional grows because he associates himself with other professionals. Therefore, I encourage every life insurance agent to join professional organizations that will make them grow professionally: LUA, GAMA, PMA, DSAP, Toastmasters Club, etc. There were no professional organizations in the life insurance industry then. But I joined by special affiliation with the Bay Area LUA through the accommodation of my good friend, Norman Levine, Jr.
5) The desire to contribute.
A true professional is motivated not just to grow in his career, or to earn a lot of money but also by a desire to make a long and lasting contribution towards the betterment of others, his community, the industry he belongs to, and, most importantly, his country.
From life insurance sales where I helped hundreds of families build a financially stable future, to a manager where I helped shaped the professional careers of many agents and managers, to a company executive where/when I was given the opportunity by the company to experiment on” multi-product agent” (the forerunner of financial planners) in the early eighties into a rainmaking/life coach today. The life insurance career if nurtured well is one of the best training grounds for somebody aspiring to be called, A True Professional.
– Sam Rayala
August 6, 2010
Hi Anthony,
A good agent will conduct a thorough but practical needs analysis. Unfortunately, some of them bloat the figures to suit their needs. You can opt to go with several insurers which is a prudent idea. I can do you insurance needs analysis for you should you wish.
As Life Insurance Agents… Are we part of the solution? Or are we part of the problem ? When it comes to giving expert advise on matters of investments and protection are the agents fully equipped with real knowledge? Practical advises based on real client needs and not based on what the agent need to make a decent living… There are just too many variables to consider if a client and agent meet discussing financials.. Lets not even discuss the other alternative distribution systems like bancassurance.. giving non-career agents the license to sell Financials… Hay naku Randell.. masakit na ulo ko just thinking about it.
hi me too.. how would i know? can u do me one too.. hahaha
I like and truly agree with what Sam Rayala said. I hope more and more agents feel the same way. Take care always and God bless you!
I’m interested to prosper in my craft. Thanks for this article and contributions of the readers. Wish to learn from you more.
Hello Mr. Tiongson,
My interest in reading blogs on building wealth led me to your blog. One of your articles that I’ve read which I found truly amazing was “Forget China, India…Try the Philippines!”
It included a video on the Philippines as one of the breakout nations that has a high investment potential in the years ahead. Because of this prospect, my enthusiasm and interest in investing heightened up.
I wish to learn more about investing and breaking out from the having-enough-money-mentality. I hope I can receive a free slot in your ‘Steps to Financial Peace Conference’ this May 18 at Greenhills.
Thank you for sharing your financial knowledge to many people through your blogs and conferences. May God multiply your blessings more!!
Thanks,
Bing
I’d just like to know if it is okay and allowed for policyholders to know where their premiums are invested in? The company from which I took out my universal life insurance says it’s confidential but I’m wondering why since mutual fund companies and even companies who get listed in the PSE show their portfolio on a prospectus as well as audited financial statements to investors?
Xenia,
Yes, it’s the right of policy holders to know where their money is invested. You can ask your insurance company. I am a financial advisor for Sun Life and we do have a VUL fund fact sheets that we can provide to policy holders if they ask for it.
I hope other companies do this too.
hi sir i just have a question i have vul and life insurance fr diff. company and im not satisfied and happy with their service im an ofw. is it possible for me to ask the company to give me a reliable agent? thanks