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6 Common Mistakes to Avoid As an Insurance Agent

Nobody's perfect, but being aware of these common mistakes that insurance brokers make can help you run a more successful agency.

5 min

Here's the hard-to-hear truth: Whether you’re a newbie to the insurance industry or a seasoned veteran, you’re going to make mistakes. No one is perfect. You’ll run into situations where you put your foot in your mouth or forget to tell a client something important. 

These things happen. Even the most experienced professionals have a bad day or slip up somewhere. But knowing how to correct your mistakes or, better yet, prevent them from happening in the first place, will make you a better insurance broker in the long run.

We can’t cover every possible scenario that could go wrong, but we’re here to give you some guidance on a few of the top mistakes that insurance agents make so that you’re aware of what to avoid right from the get-go.

Mistake #1: Using aggressive sales tactics

We’ve all been there—we walk into a dealership or even a store and are pounced on by the first person we see. No one likes a pushy salesperson, whether you’re shopping for a new car or income insurance

Of course, making sales is crucial to the bottom line of your business. But your prospective clients will respond much better if you make them comfortable from the start.

Think of your professional relationships like you would a personal one—you wouldn’t drop to one knee and propose on a first date (at least, we hope not). Get to know your leads better before diving into the actual sales portion of the conversation. Open-ended questions are great icebreakers, such as:

  • How long have you lived in the area?

  • What do you like to do outside of work?

  • Do you have any upcoming travel plans?

Some of these questions are also a useful data-gathering exercise to help you get to the heart of what they’re trying to cover with an insurance policy. From here, you can present personalized solutions that work best for their situation. This builds trust and reassures your prospect that you’re listening to their concerns and not treating them as another number in your sales book.

Mistake #2: Talking (way) too much

As the insurance expert, it’s tempting to tell a client absolutely everything you know about the type of coverage they’re looking for. Especially when you’re new to the industry, you want to put your best foot forward and give a great first impression that you know exactly what you’re doing. 

But if there’s one thing you need to know about selling, it’s that 75% of the conversation should be your client talking—rather than you. When you feel tempted to break up moments of silence with lengthy chatter, ask a question or two to get your client talking instead.

Talking too much isn’t just a problem for new brokers. Even when you’ve been selling insurance for decades, it’s easy to fall back into well-rehearsed scripts to convince your lead to close on the sale. As much as you can, rein in this habit before it becomes a problem for your business’ bottom line.

Remember too, your clients may be afraid to ask certain questions if they’re worried about looking foolish. It’s your job to reassure them that you’re there to support and help them, so encourage them to lead the conversation as much as possible.

Mistake #3: Overusing industry jargon

Another important mistake to avoid relates not just to how much you're talking, but what you're saying. 

You’ve studied and worked in insurance for a long time, so you understand what all of the jargon and acronyms mean. Your clients, on the other hand, may never have taken out an insurance policy before and have no clue what you're talking about.

A good way to open up a sales conversation is to ask your prospect about their previous insurance experience. If they’ve taken out a similar policy before, they may be familiar with terms like “premium” or “deductible.” 

If not, take some time to explain the basics of what any policy will include and phrases they should be familiar with, before diving into the details of your recommended plan. Use your experience to reframe potentially confusing language in a way that your client will understand.

Mistake #4: Putting too much time into no-go leads

In every business, there are leads that are simply not going to materialize into a sale. Most of the time, these will be people who reach out and ghost you as soon as you provide more details on the types of policies you sell

These individuals are still in the “casually browsing” stage at the very top of the sales funnel. While it’s important to develop your client roster by moving people down the funnel, you need to be able to identify who is a promising lead and who will likely move on elsewhere.

Building a quality-control process into your business is the best way to save time here. Look at the types of questions new leads are asking—do they want more information generally, or is there a specific situation that they’re looking to address? Typically, leads that ask more detailed questions are more likely to move ahead with a sale.

Don’t completely ignore your general leads, though. Everyone has to start somewhere with gathering information and there’s a chance that your help at this early stage could lead to them working with you. But when you’re thinking about how best to divide your business development time, focus your attention on your best prospects first.

Mistake #5: Not engaging with your existing clients

Most of the mistakes insurance brokers make are in the early days of their client relationships. From going in with the hard sell upfront to overwhelming a prospect with jargon-heavy information, there’s plenty that can go wrong before your leads sign on the dotted line. So surely once you’ve sold a policy, your job is done, right? Not quite.

Your clients’ money may be in your business bank account, but failing to follow up and engage with the people already on your books is one of the biggest (not to mention most costly) mistakes that a broker can make. 

They may be your client for now, but these individuals are also the biggest prospects for your competitors. They’re insurance-knowledgeable and invested in making a purchase, and your competitors know that stealing them away from you is a lucrative move for their own businesses.

Don’t wait until red flags start appearing. Be open and transparent, while going above and beyond by staying in constant communication about policy changes, new options coming to market, and possible price increases due to inflation. Informed customers are usually happier customers, so your proactive communication will keep them coming back to you for renewals, instead of jumping ship to another insurance agent.

Mistake #6: Neglecting your own business

Most of your day-to-day work will be client-focused, as it should be. This is the bread and butter that keeps the lights on and bills paid. But don’t forget, you’re an independent business. The days of going about your insurance work and letting the boss take care of admin are over. You’re the boss now, which means you need to invest time and money in opportunities that will help the business grow.

The insurance market, like many other industries, is constantly adapting and shifting to consumer needs. What worked last year may not be successful again this year. Try different marketing techniques, while adding new products to your brokerage lineup.

If you don’t have enough time to take care of this side of your business, or you want to try new approaches that you’re not skilled in, consider hiring a part-time marketing assistant or working with a freelancer. This can feel like a costly investment, but a successful marketing campaign can bring in enough clients to more than pay for the help you’ve brought in to support it.

At the same time, continue to invest in your own professional development. Attend workshops or conferences to sharpen your skills, all while meeting new people within the insurance industry and getting your name out there. Network with other insurance agents to see where there could be partnership or referral possibilities. 

No matter how long you’ve been working as a broker, there’s always room for personal improvement and new products to learn about that you can share with your clients.

Keep your bad habits in check

Making mistakes as an insurance broker is inevitable. Learning how to identify your weaknesses and working on those will be a career-long process, but it’s worth it when you have a roster of happy clients who enjoy working with you. 

Be kind to yourself as you reflect on the not-so-perfect situations and move forward with a positive mindset as you continue to develop your insurance business.

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