Increasing Agent Retention: A Leadership-Driven Approach

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Author

Jim Kee
Master Trainer
LIMRA and LOMA

February 2025

The life insurance industry’s four-year retention rate is a critical statistic. However, whenever I ask my course participants about this rate, I only see blank faces.

Here’s the industry’s four-year retention rate from my experience working with agency leaders across Asia, covering Singapore, China, Malaysia, Thailand, Vietnam, Indonesia and the Philippines:

Year One — 70%
Year Two — 30%
Year Three — 60%
Year Four — 70%

Assuming a company recruited 100 agents four years ago, 70 remain after one year. Thirty percent of the 70, or 21 agents, are still there at the end of the second year. Sixty percent of the 21 agents, about 13, remain at the end of the third year. Finally, by the end of the fourth year, 70 percent of the 13 agents, about 9, are still in force. Thus, the four-year retention rate is 9 percent in this example.

These rates may vary in different markets and organizations, as well as in their districts and agencies. The differences all boil down to one thing: leadership.

Let’s look closely at factors influencing retention rates in each year:

Year One — Absence of a Quality Recruitment System

From my personal observation, approximately 80 percent of managers today are “producer managers.” These are producers who became managers after gaining some early sales success. Many lack the necessary skills to recruit effectively, adding team members without considering qualifications.

Year Two — Lack of a Quality Training System, Specifically Prospecting and Market Development

Most new agents initially sell to their natural markets: close friends and relatives. Once they reach out to them, they often stop prospecting because they have not earned personal introductions to new people. Consequently, if they stop selling, their income also stops. That’s when many agents feel this business is not a good fit for them, leading them to leave. That’s why, of the four-year retention rates, year two is the worst, regardless of the market and company.

Years Three and Four — Continued Attrition

Even if agents survive the first two years, some will still leave in the third and fourth years for the following reasons:

Lack of purpose
Low self-esteem
Inability to see their future in the business
Unhappiness
Burnout from resetting and chasing annual targets every January 1 after a hectic fourth quarter

While the story may seem like gloom and doom, it does not have to be this way. There’s a way out of the downward spiral.

Agency managers must make a bold decision to transform their agency business. As Sir Richard Branson once said, “If there’s a great opportunity, grab it, and then learn how to do it.”

Step 1 — Have a Vision Day

Managers need to take a day off, free from any interruptions. They need to find a place where they can be alone and truly themselves.

It's time for introspection. If managers could create their dream agency, what would it look like? They should ask questions they dared not ask before:

Who are ideal customers?
Who are ideal candidates?
Who are ideal team members, unit managers, agents and staff members?
What is the ideal agency culture?
What is the ideal sales advisory process?
What is the ideal customer service experience?
Plus, other questions that will make their agency the preferred choice.

Managers must move beyond mere survival; it’s time to thrive!

Step 2 — Learn how the Best Managers Recruit

Candidate Profile — Agency managers create a profile that matches the qualities and characteristics they seek in candidates.

Recruiting Source — Next, they determine the best places to find the “raw materials” needed to build their ideal advisors and managers.

Here is the eight-step process I recommend:

Approach — Determine the best method to contact potential candidates.
Initial Interview — Interview in a way that conveys professionalism and quality, ensuring candidates feel you care about their needs.
Business Opportunity Presentation — Present the opportunity in a manner inspiring candidates to see the industry from a new perspective.
Candidate Assessment — Use a validated assessment tool, such as the LIMRA Career Choice, to objectively evaluate candidates’ skills.
In-Depth Interview — Discuss all the pros and cons of the business. It can be highly rewarding for the right people but challenging for those who may not be a good fit.
Job Sampling — Test-drive the agent business, just as you would test-drive a car.
VIP Interview — Gain the trust and support of a candidate’s significant other or very important person (VIP), as their support is crucial in the industry.
Commitment Interview — Clearly outline job expectations for candidates and what support they can expect from you.

Step 3 — Training and Development

The next crucial step is to train effectively. A simple yet effective framework is KASH:

K — Knowledge
A — Attitude
S — Skills
H — Habits

People in our business, regardless of their level, need to be well equipped in KASH. No KASH, No CASH!

Agency leaders must know the development needs of their agents and use high-tech, high-touch support to bolster their success.

Step 4 — Leadership

A big part of leadership includes being sensitive to the needs of the organization and everyone in it. Rather than risking burnout, a more sensible approach is “Build the systems; the systems will build the business.” This means agency managers need to automate their business processes through systems. Here are some examples:

Recruiting Systems — Every step of the recruitment process can be a system by itself.
Training Systems — Equipping team members with KASH can be systemized and customized.
Agency Culture Systems — Having an agency culture everyone loves to work in can also be systemized.

Assuming the process outlined above is implemented effectively, the agency should be able to attain a four-year retention rate of about 40 percent versus the current 9 percent average. That’s a 400 percent growth.

Access to time-tested, research-based agency management training is essential for cultivating these effective leadership skills and achieving sustained success in the industry.

The best investment one can make is in oneself. When a leader invests in personal growth, the whole organization benefits and grows.

LIMRA and LOMA provides solutions that empower insurers to support and develop top-quality agency managers. A wide range of programs foster professionalism and give leaders the skills essential to building and sustaining productive, high-performing agencies. With over four decades of expertise in global agency development, our industry-experienced master trainers successfully train more than 3,000 advisors and managers annually.