What impact does insurance training and education have on a company’s sales? This question, long a key focus of the life insurance industry, has become even more important in the last several years as all businesses, including insurers, look to become ever leaner by cutting unnecessary functions in an ongoing quest to improve their return on equity.
A recent study by Mutual of Omaha indicates that not only can training and education have a positive impact on a company’s bottom line, but they can also aid in the retention of sales representatives. The study looked at the impact of the company’s advanced markets training.
Before sharing the results of our study, I note one caveat: While the numbers don’t lie and there is a clear difference in new applications issued and annualized new business premium (ANBP) generated by those agents who attended Mutual of Omaha’s advanced markets training and those agents who did not, we cannot infer causality between the training and agent retention. (There is less than a 5% chance that the differences between the agents who completed training and those who did not are due to factors other than the training.)
There are too many factors that could not be measured or controlled in looking at agent retention, such as the job market, office environment, commitment, engagement, etc. However, this should not tarnish the fact that significantly more agents are retained if those agents attended training.
The Mutual of Omaha study looked at agent performance and retention from the years 2000 to 2005. And while specifics of the study are proprietary, we can share some generalities revealed by the results.
The study looked at those agents hired since 2000, and compared the number of agents who terminated their affiliation with the company with those who remained. The results were startling. Again, while other factors could have been involved, there was almost a six-fold increase in the number of agents who received advanced markets training and continue to remain with Mutual of Omaha compared with those who did not receive training and are no longer with the company.
By six-fold increase, we mean (for example) that if you had 1,000 agents who took the training and 1,000 who did not, 900 of the trained agents would remain and only 150 of the untrained agents would still be with your company.
Also measured in the study was the number of insurance applications issued by the agents who attended training compared with those who did not. It’s no surprise that the trained agents issued a significantly higher number of applications. An agent with advanced markets training will issue almost 5 times more applications per year than an agent who does not have that training.
Annualized New Business Premium
The third measure tracked in the study was annualized new business premium. On average, agents who attended advanced markets training generated more than 8 times more ANBP than agents who did not take the training. Looking at the number more closely, and removing the impact of honor clubs and experience, taking an advanced market training course can help an agent generate an additional $150,000 of ANBP each year compared to an agent without the training.
The Mutual of Omaha study looked solely at advanced markets training, which is comprised of courses such as Advanced and Basic Estate Planning, Advanced and Basic Retirement Planning and Executive Compensation. The study also showed that there is a direct, positive relationship between the number of courses taken and the number of applications issued and ANBP. As the number of courses an agent attends goes up, so does the agent’s ANBP and issued applications.
So, we can conclude fairly convincingly that advanced markets training is beneficial in helping agents maintain long-term profitability, both for themselves and their company.
Other research (studies abound on the Internet) has shown that when an organization takes the time and money to train its employee – whether it is in advanced markets or other area – the training increases those employees’ commitment and engagement to the organization; and it also increases their overall satisfaction with their job.
The Mutual of Omaha study shows that training also can have a significant impact on a company’s bottom line.