Each new year brings new challenges to every industry. In 2023, not only are insurance agencies still dealing with the fallout of the pandemic, but they're also competing with personal investment struggles and a pending recession. Here are five challenges insurance agents will be facing in 2023:
First, agents will need to adapt to a post-pandemic sales environment. The majority of people who were selling life insurance prior to COVID met clients face-to-face and will now have to revisit this sales tactic in a post-quarantine climate.
Many insurance agents have switched or attempted to switch to selling over the phone and over Zoom because of the post-pandemic climate. With a new sales cycle developing, agents will need to consider what this adjustment means for them. To me, it often means one of these three things has to happen:
- Agents will have to understand that they're going to need to work harder and be willing to travel more. If agents choose to continue to sell in person, which many do, they will have to understand there may not be many leads available in their backyard and should prepare to travel a number of hours to any given client. With the increasing ratio of people requesting services online, there is less dependency on direct mail leads.
- Agents will have to spend more time and effort on leads and lead strategies.
- Agents will have to train and get good at selling over the phone or virtually.
The second challenge agents will face in 2023 is the changing economy. Politics aside, we're in a recession. Agents have to understand that when people buy life insurance, they buy it for one of two reasons.
- They buy it because things are going really well, and they have extra money.
- Or, they buy it because things are tight.
When personal and financial situations are tight, clients tend to fall into a scarcity mindset. Clients start to think about their families and prioritize how much they have put away in case something happens to them. People in this state of mind are filling out forms for a reason: They are asking agents for help because they're thinking about how little they have. Agents in 2023 are going to have to switch to that mindset.
See also: Cybersecurity Trends in 2023
The third challenge is adjusting to the new technology that's available. It's essential to an agent to get in line with everything being instant, adapting with technology and understanding its value. If agents don't do this, they'll get left behind.
The fourth challenge for a sales agent is truly monitoring their businesses. Agents need to understand that in the insurance industry, business advanced payments can create issues later on if not managed properly. When an agent writes policies for clients, it's under the assumption the client will keep the policy for the full term. However, if the client cancels the policy in the first 12 months or so, there are chargebacks to the agent. Monitoring your insurance business, and doing a good job of selling, will help agents through these moments.
Tip: Agents should focus on selling the value of life insurance, not necessarily just the price. If agents sell only on price in a really good market, the consequences are not as severe. However, if agents sell only on price in a tough market, they'll lose more business and have more chargebacks.
For insurance agents, the final challenge for 2023 is staying focused on building their businesses. Most insurance agents don't want to only be insurance agents, they also want to build a team. The biggest challenge is understanding this might be the greatest time ever to recruit people. Recent polls are showing that nearly 70% of employed individuals state they need a second income to make ends meet. That means there's a need for new opportunities, and almost everyone is a candidate for an agency team. The challenge for agents is simply identifying that this is the case, then going out in the field and recruiting as hard as possible.