Pros and Cons of an Insurance Broker Career
Insurance brokers sell different forms of insurance to clients. Read the following pros and cons to determine if this career is right for you.
| Pros of Becoming an Insurance Broker |
|---|
| Good employment growth (10% from 2012-2022)* |
| The only academic requirement for some positions is a high school diploma* |
| Better-than-average median salaries (about $47,000 as of 2014)* |
| Minimal requirements for professional certification** |
| Cons of Becoming an Insurance Broker |
|---|
| Sales environment may be highly competitive*** |
| Working more than 40 hours per week is possible* |
| Requires licensing in every state* |
| Extensive travel is necessary for some positions* |
Sources: *U.S. Bureau of Labor Statistics, **American Institute for Chartered Property Casualty Underwriters, ***O*Net Online.
Job Description
Insurance sales agents sell different types of insurance to individuals, including health, home or automotive policies. Insurance brokers are independent insurance agents who sell multiple insurance types from different companies. Many brokers are employed by brokerage firms; they work with consumers to find and purchase insurance plans. These professionals often travel to meet with clients and insurance companies.
Salary Information and Job Outlook
In May 2014, the BLS reported that the median salary for all insurance sales agents was roughly $47,000. However, you might make considerably more; the top ten percent of insurance agents earned $119,000 or more per year. The BLS indicates that employment opportunities for insurance sales agents were expected to increase 10% from 2012-2022. In particular, brokers should have good career prospects during this time; insurance companies may work more frequently with brokerages in an effort to save money.
Career Requirements
According to the BLS, the only education requirement for insurance brokers is a high school diploma. However, many brokers hold bachelor's degrees in business administration or related fields, like finance.
Aside from academic training, effective communication is essential in this field. Brokers need excellent customer service skills in order to attract new clients and maintain existing accounts. Analytical skills are also important; as a broker, you need to understand which insurance policies meet your clients' needs.
Licensing Requirements
All insurance agents in the U.S. need to be licensed, but licensure requirements vary from state to state. In most cases, completion of preliminary coursework and a state-approved exam is required. It should be noted that the type of insurance you sell is impacted by different federal and state regulations, particularly for brokers who sell life and property insurance. The BLS notes that selling financial insurance requires special licensing through the Financial Industry Regulatory Authority. This organization licenses insurance agents and brokers that sell securities - the insurance for financial transactions.
What Do Employers Look For?
Many insurance brokerage firms want candidates who can demonstrate sales and marketing techniques for a specific form of insurance. Good computer skills are preferred as well. Here are some real job postings from May 2012:
- A California brokerage firm selling fire and property insurance needs a bilingual candidate with valid California licenses. Sales experience is a plus; applicants should also be comfortable with data entry and computers.
- A New York brokerage firm specializing in property insurance needs a broker for an entry-level position. Candidates should be determined and have great organizational skills. A bachelor's degree is preferred.
- An Atlanta, Georgia, commercial insurance company needs an entry-level broker to help a senior broker with sales. Applicants must be good with spreadsheets and have five years of experience with commercial property accounts.
How to Stand Out in the Field
Earning voluntary certification is one way to get an edge on the competition. For example, you could pursue the Associate in General Insurance designation offered by the American Institute for Chartered Property Casualty Underwriters (AICPCU). In order to obtain this credential, you need to complete a set of AICPCU courses and exams.
You can also stand out by joining professional organizations, like the Independent Insurance Agents and Brokers of America. Membership benefits may include access to continuing education opportunities and information on industry trends. According to the BLS, staying up to date on developments in the industry is looked upon favorably by employers.
Other Careers to Consider
Financial Analyst
If you'd like a related sales career with higher earning potential, consider becoming a financial analyst. According to the BLS, financial analysts help individuals consider worthwhile financial investments, like stocks or bonds. They spend considerable time researching market trends and analyzing organizations' financial statements. Although analysts often work from an office, some travel may be involved. In May 2011, the BLS reported that the median annual wage for financial analysts was more than $75,000. Employment opportunities for financial analysts were expected to increase 23% from 2010-2020.
Insurance Underwriter
If you're put off by the travel and extended work weeks that come with being an insurance broker, you may consider becoming an insurance underwriter. These professionals calculate the risk a company faces when taking on specific clients. As an underwriter, you may consider factors like whether or not someone smokes or how many accidents they've been involved in. Based on those factors, you estimate a premium cost for that individual. While a bachelor's degree is required, insurance underwriters can earn more than brokers. As of May 2011, underwriters earned a median salary of roughly $61,000, reports the BLS.
