My thoughts on life insurance agentsBy Randell Tiongson on August 6th, 2010
When 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.