A "dinosaur business." That is how one life insurance company conducting business via the Internet refers to life and annuity agents that sell face-to-face. I would disagree, since the reference sounds so…negative, offensive, and so wrong. However, they are not far from the truth. Come to think about it, I am usually one of few women in the room at insurance meetings, and I am definitely the youngest individual on the scene. I've realized that our distribution truly is dying. The number of licensed life and annuity agents in this industry has been dropping steadily since 1975 and there are fewer licensed agents today than there were in 1977. Why?
Over the past 30-plus years, the insurance industry has experienced a net loss of more than 80,000 agents. The number of new agents being recruited and contracted each year has dropped by more than half, and the majority of agents being recruited today are already established agents. For those who are not "stealing" one another's field force, the prospects are slim. Only 16 percent of life and annuity agents that are contracted are retained at the end of a four-year period, yet it costs $140,000 just to get that agent to the fourth year.
A new way to recruit
Something has to change or the life and annuity agent will become a thing of the past. At one time, the career (sometimes called "captive") agent distribution was the force driving this business. Back then, college students graduated and said, "I want to be a life insurance agent with XYZ Insurance Company." XYZ Insurance Company then hired the young recruit, paid him a base salary while he learned the ropes, provided benefits for his growing family, and gave him the best training and sales support one could ask for. It was very expensive, but it seemed to be fairly effective.
