When it comes to the challenges associated with selling insurance products — challenges that must be overcome to be successful — the most daunting ones to producers are pre-transaction obstacles (Figure 1; click to enlarge). The No. 1 difficulty among producers is prospecting for new clients. It is so significant, in fact, that there is a 21 percentage-point differential between it and the second most commonly cited challenge. After prospecting, which was cited by 55 percent of respondents, the most common challenges are clients’ lack of understanding about the need for insurance products (34 percent), clients’ negative perceptions of the industry and its products (25 percent) and clients inability to afford insurance products (22 percent).
Competition from other insurance professionals does not factor prominently into the challenges mentioned by producers. Nor do making effective point-of-sale presentations or understanding insurance products, each cited by less than 1 out of every 10 respondents.
Prospecting is the primary challenge of producers of all earning levels, but diminishes in intensity for producers earning more than $200,000 annually. Interestingly, female producers were less likely to cite prospecting for new clients as a challenge than their male counterparts (47 percent versus 59 percent, respectively). However, female producers have more difficulty with client affordability issues and competition from other sales professionals than do male producers.
Given the substantial difficulty producers have with finding new clients, we asked producers about their most successful prospecting methods (Figure 2; click to enlarge). Far and away the most effective method among respondents is referrals, cited by more than 8 out of 10 respondents. Participation in community groups (34 percent) and local events (20 percent) follow as distant second and third methods, respectively.