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10 Jun 2021

SURVIVING IN A CAREER AS AN INSURANCE AGENT

The insurance industry in 2020 recorded Gross Written Premiums of 1.06 trillion Uganda shillings. The major question one may ask is, how can this benefit someone out there looking at starting a career as an insurance agent? I would respond that the size of the insurance industry is currently a gold mine.

Why is this so? Of the gross written premiums, about 15-20% is paid out as commissions to intermediaries which include agents, brokers, and bancassurance channels. This implies that the bigger the sector the greater the commissions to the intermediaries, Agents inclusive. The beauty about the agency channel is that anyone with a basic education probably ‘A’ level and a short training at the Insurance Training College leading to the award of a Certificate of Proficiency in Insurance (C.O.P) can be licensed to undertake insurance business as an agent.

The best part about all this is that one may choose to be an agent on a part-time basis as he/she does other jobs. This freedom to do other things as you continue to earn from agency will accelerate your pace towards financial independence. What I probably missed to disclose is that all this can easily be pulled off if you have a reasonable number of clients on your portfolio, and are patient enough to hang on since insurance agency is a game of acquiring experience and the longer you stay, the bigger the commissions grow. Clients are easy to accumulate if you work smart and most especially leverage on your social capital as this is the shrewdest way to acquire the business. Thereafter you can sit back and enjoy earning from the commissions off the monthly premiums paid by your clients as you grow your book depending on the effort you put in based on your personal needs or company demands. Before making this decision one should consider the following tips;

 

  1. Choice of the sector. The insurance industry is generally classified into life and non-life insurance. According to the insurance act, an insurance agent shall not act for two or more insurers transacting the same class of insurance business without the written approval of the Authority. This provision however allows an agent to act for two or more companies provided that they are not in competition. This information is much useful when deciding how to kick-start your career. Before choosing, one should understand that according to the 2020 industry statistics, nonlife insurance accounts for 62% of the market compared to life at 30%. However, life is growing at a faster rate at 17% compared to nonlife at 7% therefore this holds extra opportunities.
  2. Self-education. Get yourself familiar with the relevant information. Insurance is based on core principles and so if one is to sell successfully they should have sufficient knowledge to instill confidence into the clients to take up a policy.
  3. Presentation. Selling of services of which insurance is one is a cautiously crafted art that mostly relies on the perception of the clients. When presenting oneself to the client one has to appear to be decent so as to remove any doubt from the mind of the client. No wonder it is common to find insurance agents dressed in suits and meeting their prospects at Porsche venues such as hotel lobby’s and restaurants. Trust is key in insurance since one simply sells a promise to undertake an action in case an eventuality happens. Therefore it is important that one appears presentable and responsible in the eyes of the client.
  4. Know the market. It is important for an agent to know the market dynamics. At times it really gets frustrating for one to visit a number of clients and does not get positive feedback. This could probably be the reason for the high turnover of agents in the insurance industry. The cause of all this could be because of confronting the wrong target market. One should know which products to market and where and then combine this with yet another important skill of customer needs assessment. At times one may try to sell to a market that has been saturated for example trying to sell to a client that has been approached by several agents. Here the trick is, how do you set yourself aside from the rest? Appear calm and never seem like you are coercing the client to immediately close that sale.
  5. Relationship Management. This is a very critical skill that helps you keep in touch with your clients. It is important to maintain a long-term personal engagement by checking on your clients. One can take leverage on the social media revolution and take actions such as sending birthday messages, sharing gift cards so as to create a personal bond with the clients.

With the above tips, one should be able to successfully nurture a career as an insurance agent, and receive a commission which is certainly a creative way to earn what many may look at as a passive income.