What is a FE Carriers Average Placement and Persistency?

[Glen Shelton]

Interesting to know. Seemed a little lower than I thought it would be.

There will be outliers on both ends of the spectrum. I know agencies that have a higher than 90%+ persistency and others that are below 70%.

This is no different than the “average closing %” question. Some folks close 10%, others close 20% ... etc.

It all comes down to the system that’s in place and the agent who is writing that business.

 

[Newby]

There will be outliers on both ends of the spectrum. I know agencies that have a higher than 90%+ persistency and others that are below 70%.

This is no different than the “average closing %” question. Some folks close 10%, others close 20% ... etc.

It all comes down to the system that’s in place and the agent who is writing that business.

Glen you are good at analyzing numbers and data. The agencies that you know that are at 70% or even close to that, are they focusing on the less competitive premium companies? Phone sales or face to face? It would be interesting to know what they are doing different from the ones you know that are higher than 90%.

There has to be something.
My guess is that price is the #1 thing that makes business more persistent.
I would think the agent being face to face is #2 factor
And type of lead/ targeted prospect is #3

Agents with KSKJ have to have an 85% persistency to make convention. I think the competitive premiums is what makes that do-able. I wouldn’t think Lincoln Heritage could do that. And they have everything going for them except price. Which (again) I think is the big one.

 

[HoosierLife]

Well as one that has sold the cheapest to the not so "cheapest," I'll give my thoughts.

When I was selling KSKJ and FB, I had around a 90% persistency. When I started leading with Trans and Americo, I had around a 90% persistency. I would use lifeshield or sentinel as pricebusters where necessary. My best persistency was actually with Trans.

The fact of the matter is that there are many agents that are not taught how to replace expensive policies. Many teach that it is unethical to do so under almost any circumstance. And there are probably dozens of active agents, if not more, in every territory.

I mean how many times have you been in a house and they've got 4 different policies with 4 different carriers sold by 4 different agents. Guys like us will roll all that up into one policy using CV or RPU. But 99% of agents don't have to worry about agents like us coming in behind them. Cause we are the minority.

Now the argument could be that there's not enough good training out there and I agree that may be the case, but the bottom line is that good agents will rarely have to worry about another agent coming in and replacing them.

In all my years in the field, the only time I got replaced were by agents selling something MORE expensive. Now they would use unsavory tactics to do it, but it only happened 4-5 times in 7 years in the field.

 

[NSRH]

Interesting dialogue.

I believe most of the quality issues are due to agent issues. Not following up, closing the sale properly, or setting up the right expectations with the customer.

From what Im reading, premium has little to do with quality of business. LH and SL's numbers seem to fall right in line with the industry average. There might be some outliers with some of the price buster companies, but it appears those might be the exception. But even in those cases, some are paying as earned, which to me translate to a higher caliber agent.

 

[Newby]

Interesting dialogue.

I believe most of the quality issues are due to agent issues. Not following up, closing the sale properly, or setting up the right expectations with the customer.

From what Im reading, premium has little to do with quality of business. LH and SL's numbers seem to fall right in line with the industry average. There might be some outliers with some of the price buster companies, but it appears those might be the exception. But even in those cases, some are paying as earned, which to me translate to a higher caliber agent.

When it comes to persistency and an agency owner accepts an industry average as “good” though it’s not really good is it? It’s horrible. Because there is a LOT of really bad out there. We all know that. So average is the middle 50%. It’s one small notch away from being in the bottom half of persistency when compared to all other agencies.

I would want to be in the top 10% or at a minimum the top 20% before I would feel comfortable. Being in the middle 50% should not be a goal for long term success.

 

[Glen Shelton]

Glen you are good at analyzing numbers and data. The agencies that you know that are at 70% or even close to that, are they focusing on the less competitive premium companies? Phone sales or face to face? It would be interesting to know what they are doing different from the ones you know that are higher than 90%.

There has to be something.
My guess is that price is the #1 thing that makes business more persistent.
I would think the agent being face to face is #2 factor
And type of lead/ targeted prospect is #3

Agents with KSKJ have to have an 85% persistency to make convention. I think the competitive premiums is what makes that do-able. I wouldn’t think Lincoln Heritage could do that. And they have everything going for them except price. Which (again) I think is the big one.

I think it has most to do with agents/agencies that have business conservation efforts in place v. those who do not. Telesales is where this really stands out - find a call center that has systematized business conversation v. one that does NOT or does very little ....

Its a night and day difference I assure you.

I don't foresee price being the #1 reason for policy fall off .... if it was, then how are all these expensive FE policies staying on the books???

 

[FEX]

I live in the south, and here the lowest premium Carriers with immediate day one coverage is KING! People try to justify higher premium companies (For obvious reasons $$$$) as having some special "value" the lower premium companies . At the end of the day when people barely scrape by living on their monthly benefit check it's the best thing for them and your persistency.

 

[Newby]

I think it has most to do with agents/agencies that have business conservation efforts in place v. those who do not. Telesales is where this really stands out - find a call center that has systematized business conversation v. one that does NOT or does very little ....

Its a night and day difference I assure you.

I don't foresee price being the #1 reason for policy fall off .... if it was, then how are all these expensive FE policies staying on the books???

If the agent or the agency does nothing to preserve business it's definitely going to affect persistency. But I don't think the expensive FE policies have the same type of persistancy at all. All companies are going to have the majority of policies stay on the books. But with the high priced companies I hear things like 70% is acceptable and 80% is considered real good? And I know they have very active policy preservation departments. At least LH does. They save a few but most are doomed over the price difference when they are discovered.

I'm not saying every high priced policy falls off the books. But I think persistancy is down 10 to 15% just due to price. At the two extremes (LH compared to any real low priced company) it has to be. Every one on this forum has replaced LH policies routinely just simply by price. Not that most of us run into them every day. But when you do it excites you just a little bit more. You know you can show them something that is going to make them very happy they had you come out.

It would be great if there were a real scientific way to measure it. But too many variables.

 

[Life Hawk]

At the end of the day when people barely scrape by living on their monthly benefit check it's the best thing for them and your persistency.

How much of a price difference are you talking about?

 

[FEX]

Depends on the client Life Hawk. Some people will be thrilled if you save them $10 a month, some if you can save them $20 a month. It depends on each individual.