12 Common Challenges for Insurance Agents & How to Overcome Them
- Brookelle Hunter
- Feb 6
- 9 min read
2025 is here!
How are things looking at your agency?
Have you been able to make headway on the goals you set at the end of last year?
As I research and come up with different topics that will help you out at your agency, I’ve realized that most agencies face some of the same obstacles.
While there’s not usually a one-size-fits-all solution to every challenge you face, there are tried and true methods to overcome them!
Today, we'll cover 12 common challenges that insurance agents and agencies face, along with ways to overcome them.
For each common challenge, we'll also share an article (or two) that goes further in depth on how you can over come that specific thing!
If you’ve got a specific challenge in mind that isn’t covered here, please shoot us an email (info@engagex.com) or comment at the bottom of this post - we’ll be sure to research and cover the topics you need guidance on!
Common Challenges:
Feel free to click on the one(s) you're most interested in, or read the whole thing!
Without further ado, let’s dive in!
1 - Losing Customers - Low Retention Rates
Among the many factors influencing customer churn (negative claims/customer service experiences, price, significant life changes, etc.), one factor drives more than 50% of insurance customers away. (Agent Pipeline)
Fortunately, this factor is almost totally within your control!
The biggest reason your clients leave and go with another agency or company is a perception of indifference.
From their perspective, you don’t genuinely care about them.
This isn’t an accusation that you don’t care about your clients - it’s their perception that you don’t care that drives them away - even passively.
TechSee found that while 50% of customers who left their agent actively searched for an alternative insurer, an equal amount churned passively, either because they were disengaged with their current insurer or were offered a better deal from a competitor (or both!).
Additional Info:
Read The Biggest Reason Your Insurance Clients Cancel (3 min.) to learn why and how proactive communication can keep your customers from slipping through the cracks.
Another helpful article: Step-Up Your Insurance Client Retention Strategy with Consistent, Proactive Communication (4 min. read)
2 - Customer Focus is on the Price
In the current economic climate, many people are evaluating their bills and cutting back as much as possible.
If there’s nothing that differentiates you from your lower-priced competitors, what would be the point of continuing to pay more?
The way to keep your clients from price shopping in the first place (and eventually canceling their policies with you) is to differentiate your agency from others by adding value to the customer experience.
Additional Info:
We compiled a list of ways you can differentiate your agency from others to keep your clients from price shopping: 9 Ways to Add Value to the Customer Experience & Keep Your Insurance Clients from Price Shopping (5 min. read)
3 - Burnout
With a talent shortage and capacity issues, it’s more than likely that you and your team have experienced burnout to some degree.
Yes, the term “burnout” has been a bit of a buzzword - but for good reason.
According to Gallup, employees experiencing burnout at work are:
63% more likely to take a sick day
Half as likely to discuss how to approach performance goals with their manager
2.6x as likely to be actively seeking a different job
23% more likely to visit the emergency room
13% less confident in their performance
If these scary statistics don’t motivate you to prevent burnout, consider the very real risks to your business - companies without systems in place to support the well-being of employees have higher turnover, lower productivity, and higher healthcare costs. (APA)
Unfortunately, your most valuable employees are most likely to experience burnout!
Additional Info:
Read Why You Need to Prevent Burnout at Your Agency (and how to do it) (7 min. read) to learn how you can make sure you don’t lose even more capacity at your agency to burnout.
4 - Large Number of Mono-Line Customers
A bunch of mono-lined customers is better than no customers at all; however, mono-lined customers are more likely to defect than multi-line customers.
And as you know, bundling can often lead to discounts for your customers.
Additional Info:
There’s a straightforward step-by-step process for you to multi-line your mono-lined customers that you can see in this infographic, but to get all the details, check out this blog post: A Step-By-Step Guide to Multi-Lining Your Mono-Lined Customers (4 min. read)
5 - Low Sales Success with Current Customers
We’ve repeatedly heard from insurance agents that they don’t regularly meet with their current customers for annual reviews because they don’t get many sales from the appointments.
Your current customers should be your easiest cross/up-sells as long as you have a process in place to make it that way.
Additional Info:
Check out these 9 Reasons You’re Not Closing Sales from Your Annual Insurance Review Appointments(6 min. read) to see what part of your process might need some tweaking in order to start closing on these opportunities right in your book!
6 - Being Too “Salesy”
When I started working as an appointment scheduler at Engagex in 2017, a response that I got daily (if not more than that) was,
“I don’t need any more insurance.”,
“I don’t want to come in so he/she can just try to sell me more insurance.”,
“I’ll only come in if it’s a review - I don’t want to buy any more insurance.”
And other responses along those same lines.
Generally speaking, people don’t like to be sold to.
As an agent, this can be incredibly frustrating because customer insurance review meetings are one of the BEST ways to identify opportunities to sell new policies to your existing customers.
And by selling new policies to your existing customers, you’re able to minimize their risks and give them peace of mind, all while increasing the likelihood that they’ll stay with you longer.
There’s a delicate balance of investigating your customers’ needs, educating them on their options, giving them time to decide what’s best, and then following up to close the sale or figure out another solution.
You shouldn’t be trying to close sales during the review meeting.
Additional Info:
This guide: How to Sell w/ out Selling - A Guide to Closing Sales w/ out Looking Like an Insurance Salesperson(6 min. read) will give you all you need to close those sales in a way that feels good for you AND your customers.
7 - Not Getting Enough Positive Online Reviews
With the commoditization of insurance and the rise of the digital age, an online presence for your agency is now more critical than ever.
85% of consumers said they trust online reviews just as much as a recommendation from a friend or family member. (BrightLocal)
To be even more specific to the insurance industry, 61.2% of consumers say that reviews are influential when it comes to finding an insurance agent. (Review Trackers)
Getting online reviews might seem daunting if you haven’t been successful in getting many before, but the article below breaks down some simple, actionable steps to tack onto what you’re already doing at your agency to get those reviews and get them consistently.
Additional Info:
Even if you don’t hold regular appointments with your customers, you can use this strategy for any interaction you have with them.
(4 min. read)
8 - Hearing about customer issues when it's too late to fix them
We've all been there - trying to resolve a customer's complaint when it's just too late. And you think, if I had known about this sooner, I could have done something to fix this!
It's a frustrating place to be in for both you and your customers. That's why proactive retention is vital!
Reactive retention efforts are inevitable for a business to have, but not all businesses put time and resources into proactive retention.
Additional Info:
In the following 2 part series, we'll explore 6 different benefits of implementing a proactive customer retention strategy in your insurance agency. In part 2, we'll go over the "how" to implement it in your agency.
Part 1: Proactive Retention: Why it's a Game-Changer for an Insurance Agency (4 min. read)
Part 2: Proactive Retention: How You Can Implement the Game-Changing Strategy at Your Agency (6 min. read)
9 - Trouble finding solid leads
Finding leads isn't necessarily the hardest thing, but finding quality leads seems to be a challenge across the board.
Because of increasing acquisition costs in the insurance industry, it can take as many as 7 new policies sold to cover the value of only 1 tenured policy. (LexisNexis)
Lexis Nexis research also finds that one-third of insurance policyholders change carriers before the end of their first term, which is often too soon for the agency to recoup acquisition costs, let alone make a profit.
If that's true, selling and onboarding a new client are far from the end of the battle.
That client needs to stay in your book long enough for your agency to see any actual profit from them.
This is why you must align acquisition with retention.
Suppose you still see acquisition and retention as two completely separate functions in your agency. In that case, it's time to look at how much further your acquisition efforts can go with retention in mind.
Customers acquired with retention in mind are set up to stay with your agency longer, purchase more policies, and give you more referrals than those obtained for quick sales.
Additional Info:
In the following post, I share 6 things you can do to better align your acquisition efforts with your retention strategy - work smarter, not harder.
Read it here: Retention Focused Acquisition in Insurance - Work Smarter, Not Harder (5 min. read)
10 - Your customers aren't open to review appointments
If you've only recently started to conduct customer insurance reviews with your current customers, you'll probably find that it's a new concept to many of them, and initially, they might not be as open to the idea as you'd like.
Preparing your clients for a customer insurance review can make all the difference in the success of your appointment setting efforts, quality of the meetings, and overall effectiveness of your program.
Most agencies have some customers who are happy and enthusiastic about coming in for an appointment. Still, a large portion of most insurance clients tends to be somewhat hesitant to come in for the review.
The hesitancy can be attributed to many different factors:
They don't want to be sold to.
They've got a busy schedule.
They don't think they need to review their policies.
The list could go on and on.
Most of these hesitations come from not knowing the importance, value, and benefits of reviewing their coverage with their agent.
Whether you're...
a new agent just starting to hold reviews
a seasoned agent starting to hold reviews
or an agent who has been holding these reviews regularly for a while
...it's essential to prepare your clients for the customer insurance review.
Additional Info:
Learn how to prepare your customers in this blog post: Laying The Groundwork for an Effective Annual Insurance Review Program: Preparing Your Clients (2 min. read)
BONUS: If you'd like to learn how to respond to the most common objections insurance consumers have when it comes to scheduling an appointment, check out this post that also comes with a FREE PDF download you can use: 20 Common Client Objections to Annual Insurance Reviews (10 min. read)
11 - Trouble getting referrals from your customers
You know it; We know it. Referrals are valuable.
They're usually the least expensive lead type to acquire and typically spend up to 25% more on the initial purchase than non-referred customers. (Go Nectar)
They're often an easier sale as well - according to a study at Nielsen, consumers are 4 times more likely to buy when referred by a friend. (Nielsen)
The lifetime value of a referred customer is about 16% higher than non-referred customers. (Go Nectar)
However, actually finding and executing a process to receive referrals seems to be the most challenging part for most insurance agents.
I did some research to find tips and ideas that aren't talked about as much - tweaking your current referral program or introducing a new element could give it the extra push it needs to take off and bring in those treasured referrals.
Additional Info:
See what I found here: 7 New Tips for Creating an Agency Culture of Receiving Referrals (5 min. read)
12 - Capacity shortage in your agency
Capacity struggles are widespread in the insurance industry. And while the two articles I'll share here might feel counter-intuitive, agents who
outsource appointment setting (or other monotonous office tasks)
and train their licensed staff members to conduct review appointments
find they have the capacity for so much more!
Additional Info:
While this article focuses on outsourcing for appointment setting, you can apply the principles to whatever other tasks you might need to outsource.
(3 min. read)
And in this article, you can learn how to increase capacity AND profit by training your licensed staff members for higher-level tasks like customer insurance review appointments.
The Monetary Benefits of Training Your Agency Staff Members to Conduct Customer Insurance Reviews (3 min. read)
That's it for today - we hope this gives you some insight into how you can overcome challenges this year and reach your goals! If you have any challenges we didn't address here in this article, please share them with us and we'll do some research! Either comment below or send an email to info@engagex.com.
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