Patricia Saint Louis, RN, on What It Takes to Become an Insurance Agent

Wooden blocks with the word insurance highlighted.

The insurance industry is at a crossroads, facing disruption from insurtechs — startups that are providing digitized insurance services—and reeling from the decline in premium income and jump in claims owing to the pandemic. But where there’s crisis, there’s opportunity. The prospect for agents, brokers, and consultants is good and getting better. The industry continues to experience steady growth. Moreover, many insurance products are required by law—people must buy them—which means there’s always a guaranteed market. What could be better?

Read on to get a glimpse of what the industry looks like presently, as well as tips from seasoned professionals like insurance broker Patricia Saint Louis, a Medicare Specialist and Registered Nurse.

An Industry Bigger Than Many Nation-States

The insurance industry is immense. In 2019, the last year for which complete data is available, the regular industry wrote $1.32 trillion in net premiums. That’s more income than most nation-states generate. (More than Mexico, Saudi Arabia, and Iran, for example.) 

Traditionally, two major sectors have made up the industry, comprising firms that issue life insurance and those that do not. In 2019, the two sectors were almost of equal size. Firms that issued accident and life insurance policies, as well as annuities, comprised the slightly larger sector, with revenues (net premiums) of $678.7 billion. Property and casualty insurers — primarily those that write auto, homeowners, and commercial insurance — recorded nearly as much, with $637.7 billion in revenues. 

But there is a third sector, also of considerable size, made up of companies that specialize in health insurance. In 2019, these firms recorded net premiums of $757.4 billion. They were not alone. According to Insurance Information Institute statistics, life and annuity companies also wrote $204.1 billion in health insurance, while property and casualty companies added another $6.7 billion — amounts that are included in their sector totals reported above.

An Army of Workers

Owing to its colossal extent, the insurance industry is a large employer, with around 2.9 million people engaged in a variety of occupations. That enormous workforce is split along four lines: (i) life and health, (ii) property and casualty, (iii) reinsurers, and (iv) agencies, brokers, and other insurance-related enterprises. 

Employment in agencies and brokers, as opposed to working for insurers, has stayed fairly steady — around 28% to 29%. These independent agents tend to earn more than captive agents, agents who work for one insurer. But captive agents may enjoy a measure of security that independent agents do not.

An Industry With a Future

Over the past decade, the insurance industry has had a compound annual growth rate (CAGR) of 2.26%, rising from $2.336 trillion in 2011 to $2.858 trillion in 2020. Business for agencies, brokerages, and ancillary services has swelled even more. From $649.2 billion in 2011, the sector expanded to $853.4 billion in 2020, a CAGR of 3.09%. 

Expansion is being driven by population growth, as well as technological development. The ubiquity of the mobile phone has opened up another channel to deliver insurance services. The improvement in communication capability is, perhaps, the most obvious manifestation of the digital era. Yet, digital disruption is leaving few areas the way they were. For example, auto insurers are evaluating usage-based insurance that bases a driver’s premium “on their actual driving rather than the typical bevy of statistics like driving history, location and age.” Root Insurance is a pioneer in the field. Progressive Insurance has its own usage-based system called “Snapshot,” and many other insurers are offering usage-based insurance. Other advanced applications include the use of drones for carrying out inspections and chatbots to handle customer queries.

Pandemic Pall

The industry was battered by the pandemic. All sectors were affected. Property-casualty insurers in North America took a big hit, incurring losses of US$6.8 billion “related to COVID-19 and concurrent drops in premium volume for key lines,” according to a Deloitte report. The life sector also suffered. Globally, premium income for the sector declined by 8% in the US and other advanced economies. Annuity sales dropped by “double digits.” The pandemic appears to have caught the industry by surprise. Nevertheless, Deloitte expects the industry to “rebound to 3% growth in 2021, led by a potential 7% boost in emerging regions.” 

This is just as well. The industry was already under siege from a new breed of tech companies — insurtechs — that were deploying the latest digital technologies to deliver insurance services faster, easier and cheaper. It was an industry particularly vulnerable to disruption, for its business practices have not changed much since the oldest property insurance company, Benjamin Franklin’s Philadelphia Contributionship, first opened its doors to the public in 1752. Disruption has come in the shape of Gusto, which provides health insurance; Lemonade, a provider of home insurance; Next, which provides small business policies; Root, which offers usage-based premiums, and a host of other insurtechs that are smoothing out the creases in the insurance market.

The Pay Is Good

Despite these developments, the outlook for potential insurance agents, brokers and consultants is bright. The Bureau of Labor Statistics (BLS) expects job openings to increase by 5%, faster than average, in the decade to 2029. Moreover, the pay is good. The current average pay for an agent is $79,730 a year, according to recent data from ZipRecruiter. That’s way above the national average (median) salary, which, in 2019, was $57,456 for men and $47,299 for women. 

The ZipRecruiter data is revealing. Insurance sales rep salaries vary widely: annual pay ranges from $17,500 to $100,000, with around half earning between $30,500 and $60,500. About 10% of agents make more than $87,500. 

The BLS reports two estimates. Its median annual wage for Insurance Sales Agents is $67,300 (i.e., half the agents earn more than $67,300), while the other half earns less than that amount. But that’s for agents who work for brokers and agencies that do not write insurance. Agents who work for firms that actually write insurance get paid more. The median annual salary for such reps is $76,600, according to the BLS.

The Grass Is Greener on the Other Side

New markets are opening up. Perhaps, the largest is that of gig economy workers. In 2017, around 55 million people — 34% of the labor force — worked in the gig economy. That share is expected to rise to 43% in 2020, says the International Labor Organization. Millennials offer another opportunity. Just 10% of those between the ages of 25 and 40 have “100 percent of the insurance they say they need,” according to New York Life. All this promises halcyon days for the industry.

Nicholas Sakha

Nicholas Sakha runs an insurance agency in Las Vegas. He got into the insurance business in 2016 after a long spell working in the banking industry. 

He explains, “I started my insurance agency with the 401(k) I had left from banking. Had zero insurance experience and zero business owner experience. I kind of just fumbled my way through it and found myself where I am today. Got two offices in Vegas and we have continued to scale over the last five years. We have earned our way up to a 5-million-dollar book of business. And we’re just getting started” 

He also offers five tips on what to expect on becoming a property and casualty insurance agent. Each insurance office is different in terms of culture, comp plan, and benefits. Find one where you can fit in. It’s important to find out “what the upside is… what the opportunity is, what the growth trajectory of the agency is … because 92% of insurance agencies fail. Make sure you’re joining a winning organization.”

Some basics to getting started: You’ll have to get licensed, which is done on a state-by-state basis and by sector. The most common licenses are the property and casualty license (P&C) as well as life and health insurance license (L&H), but different states may categorize licenses differently. The average entry-level base income is $25,000 to $35,000. The earning potential is at least $100,000. An agency that’s out to grow will have a “base salary and a very lucrative commission structure, so as to be performance-driven.” 

“I myself max my employees out at a 12% commission on the premium that they write. And so, what does that mean? For my team to earn $100,000, they need to sell $50,000 in premium every single month. Is it possible? Yes. Is it easy? No.”

One great advantage: “Our product — property, auto and home insurance — is required by law.”

Kenny Lammons

One exciting niche is becoming a Medicare insurance agent. Medicare is the federal health insurance program for people who are 65 or older or certain younger people with disabilities. Apart from the younger people who are eligible because of disability, most folks become eligible on turning 65. That’s about 10,000 people every day, or 3.7 million every year. This is a large pool of potential customers that makes the segment quite attractive. 

Kenny Lammons is a Medicare insurance agent. Together with partner Ethan Glidewell, he runs Medicare Millennials in Texas. He outlines five steps to launching a career as a Medicare insurance agent.

  • Step 1: Get a License. Says Kenny, “I do encourage you to get a health and life license, although you really only need a health license to sell Medicare.” 
  • Step 2: Get certification through America’s Health Insurance Plans (AHIP) in order to sell Medicare Advantage (MA) or Prescription Drug Plans (PDPs). Certification is only valid for one year and so must be renewed every year. 
  • Step 3: Get Errors And Omissions (E&O) Insurance. E&O insurance is a type of professional liability insurance that covers claims of inadequate work or negligent actions. 
  • Step 4: Get FMO Contracting & Certification. To sell products provided by a Field Marketing Organization (FMO) means signing a contract and being appointed or certified by that FMO. 
  • Step 5: Develop and Implement a Lead Strategy. This can take one or more of several forms that include:
    • Having a website to generate leads; 
    • Holding compliant Medicare sales and educational events 
    • Establishing affinity partnerships to gain leads 
    • Getting leads from direct mailer campaigns.

Patricia Saint Louis

Another Medicare Specialist is Patricia Saint Louis of Life & Medicare Insurance. Patricia has worked in the medical field for over 15 years. She currently manages MDS at a Skilled Nursing Facility. MDS, or Minimum Data Set, is a federal system for clinical assessment of residents in Medicare or Medicaid-certified nursing homes. Patricia decided to take her passion and love for helping people into the insurance space. 

She says, “My job is simple. I help my clients find the best insurance program that fits their budget and health. I work with over 25 companies, so, essentially, I’m doing the shopping for them.” 

Patricia is an insurance broker, which means she’s not beholden to any one company. She has an advantage that few other Medicare agents have. She’s also a Registered Nurse and over the years has become familiar not only with what enrollees to these federal programs need but the complex Medicaid and Medicare insurance system. Licensed to market insurance in the state of Florida, Patricia says, “I’m your insurance broker with a nurse’s touch.” 

She shared her experience as an insurance marketing consultant with TRUiC. 

What are some qualities of a great insurance agent?

“Someone that is able to find a problem; then meets the needs of that problem. For example, if you are sitting with a low-income client. There are programs to assist paying drug co-pays and Part B premiums. Help them enroll.

Another example would be if someone wants to leave money behind to their loved ones but is 70 years old. Most companies will not allow a death benefit over $30,000. If they can afford it, offer more than one final expense policy, so the goal of leaving money behind is met. ”

What does an average day look like for insurance agents?

“It can be anywhere from writing a policy, setting appointments, marketing, and networking. Agents think it’s all about selling. Nope, it’s a lot of educating and networking.” 

How do you see the insurance industry evolving over time?

“I believe social media will be the key for agents to stand out from the crowd. If you aren’t advertising yourself, then you may be losing out.”

What is your advice for aspiring insurance agents?

“Let people know what you do, and don’t be afraid to put yourself out there. How would I know you exist if you don’t tell me? Brand yourself and let everyone know what you do!”

Getting Started as an Insurance Agent

If you’re now starting out, the challenges of becoming successful in the field may seem daunting. Certainly, this is no field for the faint-hearted. You’ll have to be psychologically tough to deal with the many rejections you will encounter. The key to success is really making many presentations. Then the law of large numbers kicks in: more presentations will result in more sales. In the end, though, being successful is about marketing: yourself and your product. 

As life insurance salesman Peter Rosengard says, “The all-time sales marketing genius in the past two hundred years is the man who thought of calling death insurance ‘life insurance’.”

To learn more, check out this comprehensive guide on how to become an insurance agent.

Headshot of Anthony de Freitas

Anthony de Freitas

Anthony is the owner of Kip Art Gifts, an ecommerce store that specializes in art-inspired jewelry, fashion accessories, and other objects. Previously, he worked as an accountant and financial analyst. He enjoys writing on small business, financial intermediation, and economics. Anthony was educated at Wilson’s School and the London School of Economics and Political Science.

Read more from Anthony de Freitas