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291
Insurance Agents and Brokers

(D.O.T.  239.267 and 250.257-010)

Nature of the Work

Most people have their first contact with an insurance company
through an insurance agent or broker.  These professionals sell
individuals and businesses insurance policies that provide
protection against loss.  Insurance agents and brokers help
individuals, families, and businesses select the right policy that
best provides insurance protection for their lives and health, as
well as for their automobiles, jewelry, personal valuables,
furniture, household items, businesses, and other properties.
Agents and brokers prepare reports, maintain records, and, in the
event of a loss, help policyholders settle insurance claims.
Specialists in group policies may help an employer provide employees
the opportunity to buy insurance through payroll deductions.
Insurance agents may work for one insurance company or as
independent agents selling for several companies.

   Insurance brokers do not sell for a particular company, but place
insurance policies for their clients with the company that offers
the best rate and coverage.

   Insurance agents sell one or more of several types of insurance:
Life, property/casualty, health, disability, and long-term care.
Life insurance agents specialize in selling policies that pay
survivors when a policyholder dies.  Depending on the policyholder's
circumstances, a whole-life policy also can be designed to provide
retirement income, funds for the education of children, or other
benefits.  Life insurance agents and brokers also are sometimes
called life underwriters.  (See the statement on underwriters
elsewhere in the Handbook.)

   Property/casualty insurance agents and brokers sell policies that
protect individuals and businesses from financial loss as a result
of automobile accidents, fire or theft, or other property losses.
Property/casualty insurance can also cover workers' compensation,
product liability, or medical malpractice.  Many life and
property/casualty insurance agents also sell health insurance
policies covering the costs of hospital and medical care or loss of
income due to illness or injury.

   An increasing number of insurance agents and brokers offer
comprehensive financial planning services to their clients, such as
retirement planning counseling.  As a result, many insurance agents
and brokers are also licensed to sell mutual funds, annuities, and
other securities.  (See the section on securities and financial
services sales representatives elsewhere in the Handbook.)

   Since insurance sales agents obtain many new accounts through
referrals, it is important that agents maintain regular contact with
their clients to ensure their financial needs are being met as
personal and business needs change.  Developing a satisfied
clientele who will recommend an agent's services to other potential
customers is a key to success in this field.

   It is important that insurance agents and brokers maintain regular
contact with their clients.

Working Conditions

Most insurance agents and brokers work in small offices, contacting
clients and providing insurance policy information.  However, most
of their time is spent outside their offices, traveling locally to
meet with clients and close sales.  They generally arrange their own
hours of work, and often schedule evening and weekend appointments
for the convenience of clients.  Many work more than 40 hours a
week.

Employment

Insurance agents and brokers held about 415,000 jobs in 1992.  About
one-third of all agents and brokers are self-employed.  While most
insurance agents specialize in life insurance, a growing number of
multiline agents offer life, property/casualty, and health and
disability policies.  The following tabulation shows the percent
distribution of wage and salary jobs by industry.


Total............................................................. 100

Insurance agents, brokers and service.............................. 41
Life insurance carriers............................................ 37
Fire, marine, and casualty insurance carriers...................... 14
Medical service plans and health insurance carriers................  4
Pension funds and miscellaneous insurance carriers.................  1
Other industries...................................................  3

   Agents and brokers are employed in cities and towns throughout the
country, but most work in or near large population centers.  Some
insurance agents and brokers are employed in the headquarters of
insurance companies, but most work out of local company offices or
independent agencies.

Training, Other Qualifications, and Advancement

For jobs selling insurance, companies prefer college graduates
particularly those who have majored in business or economics.  Some
hire high school graduates with potential or proven sales ability or
who have been successful in other types of work.  In fact, most
entrants to agent and broker jobs transfer from other occupations,
so they tend to be older, on average, than entrants to many other
occupations.

   College training may help agents or brokers grasp more quickly the
technical aspects of insurance policies and the fundamentals and
procedures of selling insurance.  Many colleges and universities
offer courses in insurance, and some schools offer a bachelor's
degree in insurance.  College courses in finance, mathematics,
accounting, economics, business law, government, and business
administration enable insurance agents or brokers to understand how
social, marketing, and economic conditions relate to the insurance
industry.  It is important for insurance agents and brokers to keep
current with issues concerning clients.  Changes in tax laws,
government benefit programs, and other State and Federal regulations
can affect the insurance needs of clients and how agents conduct
business.  Courses in psychology, sociology, and public speaking can
prove useful in improving sales techniques.  In addition, some basic
familiarity with computers is very important.  The use of computers
to provide instantaneous information on a wide variety of financial
products has greatly improved agents' and brokers' efficiency and
enabled them to devote more time to clients.

   All insurance agents and brokers must obtain a license in the States
where they plan to sell insurance.  In most States, licenses are
issued only to applicants who complete specified courses and then
pass written examinations covering insurance fundamentals and the
State insurance laws.  Agents and brokers who plan to sell mutual
funds and other securities must also obtain a separate securities
license.  New agents usually receive training at the agencies where
they work and, frequently, also at the insurance company's home
office.  Beginners sometimes attend company-sponsored classes to
prepare for examinations.  Others study on their own and accompany
experienced agents when they call on prospective clients.

   As the diversity of financial products sold by insurance agents and
brokers increases, employers are placing greater emphasis on
continuing professional education.  Agents and brokers can hone
their practical selling skills and broaden their knowledge of
insurance and other financial services and planning by taking
courses at colleges and universities and attending institutes,
conferences, and seminars sponsored by insurance organizations.

   A number of organizations offer professional designation programs
which certify expertise in specialties such as life, health, or
property and casualty insurance or financial consulting.  Although
voluntary, professional designation assures clients and employers
that an agent has a thorough understanding of the relevant
specialty.  Many professional societies now require agents to commit
to continuing education in order to retain designation.  Nearly
every state has or soon will make continuing education mandatory.

   Insurance agents and brokers should be enthusiastic, outgoing,
self-confident, disciplined, hard working, and able to communicate
effectively.  They should be able to inspire customer confidence.
Some companies give personality tests to prospective employees
because personality attributes are important in sales work.  Because
they usually work without supervision, agents and brokers must be
able to plan their time well and have the initiative to locate new
clients.

   An insurance agent who shows sales ability and leadership may
become a sales manager in a local office.  A few advance to agency
superintendent or executive positions.  However, many who have built
up a good clientele prefer to remain in sales work.  Some,
particularly in the property/casualty field, establish their own
independent agencies or brokerage firms.

Job Outlook

Employment of insurance agents and brokers is expected to grow about
as fast as the average for all occupations through the year 2005.
Most job openings are expected to result from the need to replace
agents and brokers who leave the occupation.  Many beginners find it
difficult to establish a sufficiently large clientele in this highly
competitive business; consequently, many eventually leave for other
jobs.  Opportunities should be best for ambitious people who enjoy
sales work and who develop expertise in a wide range of insurance
and financial services.

   Future demand for agents and brokers depends on the volume of sales
of insurance and other financial products.  The growing number of
working women should increase insurance sales.  Rising incomes as
well as a concern for financial security also may stimulate sales of
mutual funds, variable annuities, and other financial products and
services.  Growing demand for long-term health care and pension
benefits for retirees an increasing proportion of the population
should spur insurance sales.  Sales of property/casualty insurance
should rise as more people seek coverage not only for their homes,
cars, and valuables, but also for expensive, advanced technology
products such as home computers.  As new businesses emerge and
existing firms expand coverage, sales of commercial insurance should
increase.  In addition, complex types of commercial coverage such as
product liability, workers' compensation, employee benefits, and
pollution liability insurance are increasingly in demand.

   Employment of agents and brokers will not keep pace with the rising
level of insurance sales.  Using computers, agents can access an
abundance of information on potential clients, allowing them to save
time and money by carefully crafting individually tailored plans.
Consequently, agents will be able to handle a greater volume of
sales.  Many companies and agencies are diversifying their marketing
techniques to include some direct mail or telephone sales, as well
as other methods.  These methods reduce the time agents must spend
developing sales leads, allowing them to concentrate on following up
on leads.  In some cases, clients can purchase policies without a
visit from an agent.  Also, customer service representatives are
increasingly assuming some sales functions, such as expanding
accounts, and, occasionally, generating new accounts.  The trend
toward multiline agents, self-insurance, and group policies also
will cause employment to rise more slowly than the volume of
insurance sales.  In addition, large firms may increasingly hire
risk managers to analyze their insurance needs and select the best
policies.

   Most individuals and businesses consider insurance a necessity,
regardless of economic conditions.  Therefore, agents are not likely
to face unemployment because of a recession.

Earnings

The median annual earnings of salaried insurance sales workers was
$30,100 in 1992.  The middle 50 percent earned between $20,900 and
$42,200 a year.  The lowest 10 percent earned $15,400 or less, while
the top 10 percent earned over $64,600.  Most independent agents are
paid on a commission only basis, whereas sales workers who are
employees of an agency may be paid in one of three ways: Salary
only, salary plus commission, or salary plus bonus.  Commissions,
however, are the most common form of compensation, especially for
experienced agents.  The amount of the commission depends on the
type and amount of insurance sold, and whether the transaction is a
new policy or a renewal.  Bonuses are usually awarded when agents
meet their production goals or when an agency's profit goals are
met.  Some agents involved with financial planning receive an hourly
fee for their services rather than a commission.

   Agency-paid benefits to sales agent employees generally include
continuing education, group insurance plans, and office space and
support services.  Many agencies also pay for automobile and
transportation expenses, conventions and meetings, promotion and
marketing expenses, and retirement plans.  Independent agents
working for insurance agencies receive fewer benefits, but their
commissions may be higher to help them pay for promotion and
marketing expenses.  They are typically responsible for their own
travel and automobile expenses, life insurance and retirement plans,
and receive no paid holidays or vacations.  In addition, all agents
are legally responsible for any mistakes that they make, and
independent agents must purchase their own insurance to cover
damages from their errors and omissions.

Related Occupations

Other workers who sell financial products or services include real
estate agents and brokers, securities and financial services sales
representatives, financial advisors, estate planning specialists,
and manufacturers' sales workers.

Sources of Additional Information

   General occupational information about insurance agents and brokers
is available from the home office of many life and casualty
insurance companies.  Information on State licensing requirements
may be obtained from the department of insurance at any State
capital.

   Information about a career as a life insurance agent also is
available from:

   National Association of Life Underwriters, 1922 F St.  NW.,
Washington, DC 20006.

   For information about insurance sales careers in independent
agencies and brokerages, contact:

   National Association of Professional Insurance Agents, 400 N.
Washington St., Alexandria, VA 22314.

   For information about professional designation programs, contact:

   American Society of CLU and ChFC, 270 Bryn Mawr Ave., Bryn Mawr, PA
19010-2195.

   Society of Certified Insurance Counselors, 3630 North Hills Dr.,
Austin, TX 78731, or call 1-800-633-2165.

   Society of Chartered Property and Casualty Underwriters, Kahler
Hall, 720 Providence Rd., P.O.  Box 3009, Malvern, PA 19355-0709.