How Much Money Insurance Agents Make
Insurance sales are all about the exchange of information. To put together an effective policy, insurance companies require consumer data. This is also true for other industries that require such data, including real estate, vehicle sales and transportation. In a variety of those markets, the Internet is the primary facilitator, yet in-person agents are still used. According to data from A.M. Best IIAMA Market Share Reports, in-person agents are the primary distribution channel for commercial, life, homeowner and automobile insurance. It's important for insurance agents to be able to validate and reassure their customers in person, so they have limited online access to transactions to some degree.
The Complexities of Selling Insurance: Why Are Insurance Agents Necessary in the Modern Age?
Not only does it benefit insurance agents to maintain in-person interaction with clients, but it also helps consumers. Insurance policies are incredibly complex, and most consumers want a real person they can come to if they have questions. Imagine if you were trying to navigate your way through a confusing insurance policy, and your only help was information you found online? It's easy to get stuck and frustrated in such a situation.
Most people also feel nervous about making big life choices, such as choosing an insurance policy, and it helps to have a trusted channel to purchase from. Insurance agents become incredibly knowledgeable about what they do, and that knowledge is very valuable for the consumer. If they work with a company with a strong reputation, they will earn even more trust from their clients.
The Numbers on Paper: How Much Do Insurance Agents Really Make?
Despite the fact that people are curious about how much money insurance agents make, it's a question that often goes unasked. Since they play such a crucial intermediary role in closing insurance policy sales, agents make up to 12 percent profit margins that tend to go even higher depending on the complexity of the product. In 2014, insurance agents made $325 billion in revenue. Approximately $300 billion of that is commission provided by insurance companies and another $25 billion comes from fees spent by consumers.
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