As AI continues to improve, insurance companies will be better able to identify the right agents, onboard them more efficiently, and provide continuous guidance that will help them succeed. (Credit: Adobe Stock)
The vast majority of insurance agents leave the industry within the first few years. The result contributes to a "talent gap" that has massive consequences for business stability and growth.
When recent hires move on to other opportunities, insurers are left with a heavy burden, both financially and reputationally. The financial strain caused by high staff turnover makes insurers allocate considerable budget to recruiting and training new agents. The constant personnel churn means that companies struggle to maintain a steady workforce and retain institutional knowledge, which in turn impacts their ability to provide service consistency and build strong relationships over time.
Some of the intractable challenges posed by the high turnover rate of insurance agents and producers include:
- The expense;
- The time consumed by the continuous recruitment; and
- Training new agents.
For the insurer, this can be a stain on company reputation, making it harder to attract and retain both new clients and skilled agents. The more agents a company loses, the more money and effort is required to bring in replacements and get them up to speed.
Once they’re hired, new agents need ramp-up time to become fully productive. While they’re getting there, companies may lose revenue as they work to build their client base. This not only impacts the company’s bottom line, it can also lead to higher client turnover; many clients could choose to leave with their agent or even take their business elsewhere.
For those agents who are best at what they do, their ability to explain the finer points of a policy is often the determining factor in a customer’s decision to renew, or even sign on in the first place.
Can artificial intelligence (AI) help insurers with this problem?
I believe that it can.
The agent retention crisis
New AI-driven tools can boost recruitment outcomes by analyzing candidate profiles and predicting how likely an applicant is to stay in the industry for an extended period. By choosing agents who are more likely to remain in the role, insurers can reduce turnover rates and avoid the costly cycle of recruitment and training.
Historically, the leading source for better candidates — the fastest to hire and quickest to produce — has been existing-agent referrals. These hires also come with the lowest acquisition costs. However, when agents observe a revolving door of hires leaving, they naturally become reluctant to introduce a family member, friend, neighbor or prior colleague to the industry.
Furthermore, a lack of transparency about where that candidate is in the hiring process negatively impacts their confidence in creating new referral introductions. Clunky, antiquated onboarding processes, compliance delays, manual training prompts, and a lack of ongoing marketing and sales support all contribute to attrition.
In turn, insurers receive fewer candidate referrals.
Tech to the rescue
For insurers looking to face the problem of low agent retention and referrals, new technologies using machine learning and artificial intelligence have begun to emerge as a possible solution. These tools can clarify and improve recruitment, streamline the onboarding process, and provide ongoing support to agents once they’re hired, improving transparency as well as their productivity and satisfaction over the long term. Using AI, insurance companies can get a better handle on their agents’ needs, predict which candidates are more likely to succeed in the organization, and guide agents in making smarter decisions that enhance their sales performance, their client relationships, and even their career path.
AI also can speed up the onboarding process, guiding new agents through training more efficiently and getting them ready to perform at a high level sooner than current methods normally allow. By transitioning new agents to full productivity faster, AI can help companies recover from the initial loss of revenue that typically occurs when new agents start their careers.
An AI-driven approach also support agents once they’re out in the field by providing them with tailored strategies to boost sales performance, analyzing their strengths and weaknesses, and offering actionable insights that can improve their overall productivity. AI tools allow agents to get a clearer picture of which clients to target and the best times to reach out, helping them increase their chances of success. AI also provides ongoing support by helping agents stay on top of industry trends and ensuring they meet the numerous and constantly shifting compliance requirements at state and federal levels.
Over time, agents will become more confident in their roles and serve their clients more effectively.
Innovation and younger agents
New AI-driven technologies are emerging that could play a major role in reshaping agent retention in the insurance industry.
The integration of AI might even have the knock-on effect of making the insurance industry more appealing to younger generations, including millennials and Gen Z workers, who are seldom seen without their phone in their hand. While insurance has traditionally been one of the first industries to deploy a given technology, ironically, these generations of digital natives have tended to view insurance as an archaic industry, frozen in time. But by adopting AI tools, insurance companies can project a tech-forward image while creating an environment that supports young agents in every step of their process, from recruitment to long-term success.
As AI continues to improve, insurance companies will be better able to identify the right agents, onboard them more efficiently, and provide continuous guidance that will help them succeed. AI shows a way for insurers to offer recruits more attractive careers, by helping them attract and retain top talent in a crushingly competitive job market. And they might even save the industry in the process.
Anthony Iuffredo is vice president of Sales, Americas for Vymo, a multi-channel distribution management platform serving the global insurance industry. He can be reached at Anthony.iuffredo@getvymo.com.
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