Explaining to someone the merits of financial security provided by insurance and the idea of transferring risk to another party for a fee (known as a premium) takes a lot of persuasion, reasoning and patience at the best of times.
In a business where dealing with rejection and scepticism comes with the job, working as an insurance agent is as challenging as preaching communism to the Vatican. This, though, is a test that more than 30,000 registered insurance agents in Hong Kong (as of March this year) subject themselves to every day.
Over the years, insurance products have evolved into complex and sophisticated financial tools and some concepts, such as life insurance, have developed over two centuries.
Before stepping into this multi-billion dollar sector in Hong Kong, newcomers should first evaluate their personal attributes. "Those who aspire to enter the industry need to have a successful track record, not necessarily in sales or insurance, but [to have been] successful in life, such as being a head prefect in school or a leader of a team of volunteers,'' Harrison Li, regional director of ING Life Insurance (Bermuda), says.
He cites useful attributes such as credibility, good writing and speaking skills, logical thinking and public relations abilities. "Having some or all of these qualities could make someone a good candidate for a job as an insurance agent.''
To join ING Life Insurance as an insurance agent, the minimum qualification is Form 5 and a candidate needs to be more than 18 years old. Most who join are 21 or above.
New recruits are required to pass Paper I and Paper III of the Insurance Intermediaries Qualifying Examination which comes under the Insurance Intermediaries Quality Assurance Scheme of the regulator, the Insurance Authority. The exam is conducted by the Continuing Professional Development Centre of the Vocational Training Council. Exam questions are largely multiple choice. Paper I examines the principles and practice of insurance, while Paper III examines the Mandatory Provident Fund.
Newcomers do get a helping hand. "At recruitment seminars, we tell potential candidates about critical success factors. We invite candidates for pre-exam training where we do a mock exam,'' Mr Li says. "In the second stage, we do not send new recruits out. We send them to class to learn things like product knowledge. After four and a half days of training, they return to the agency. On each weekday morning, we conduct sales cycle training, including prospecting [for customers], fact-finding, proposal presentation and after sales service.''
New recruits are then assigned to an experienced manager for further on-the-job learning. "They are encouraged to meet at least four potential customers a day. But, since this is not always possible by prospecting their natural market, appointments are made for them by our agency telesales centre,'' Mr Li says.
In the first six months, new recruits receive an allowance, which could be as much as 80 percent of their previous income. For this, however, they must provide proof of past income. Commissions and bonuses complement the allowance. However, there is no allowance after six months in the job.
Commissions vary depending on insurance products sold, ranging from two to 60 percent of the first year's premium. But, now, there is a trend towards paying better commissions for policy renewals. "The monthly income of a new recruit could vary between HK$10,000 and HK$30,000. There are, however, exceptional agents who earn more than HK$1 million in the first year,'' Mr Li says.
Those who join as insurance agents may progress to management jobs. They need to have at least two years' experience. They are required to complete some elementary management training courses, demonstrate a lot of self-discipline in managing time and finances and be able to train people.
From insurance agent, one can progress to team manager, branch manager, agency manager, agency director and then agency head. An agency head reports directly to the senior management of ING Life Insurance.
Mr Li advises new recruits not to make negative or positive assumptions about a prospective client. "Your friend of 10 years may disappear when you become an insurance agent. Your rival may become your centre of influence. Be positive towards the product you sell, your company, your manager and in particular yourself,'' Mr Li says. "Remember the 80-20 Rule. Twenty percent of your activities account for 80 percent of your income. So focus on productive activities. My final advice is focus, focus and focus.''
|Back to basics
|- Do not sell a product,
sell a solution to a customer's problem
- There is no perfect product (solution); always
tell the potential customer about the shortcomings/constraints
of what you are selling
- Believe in the Law of Large Numbers when prospecting
for clients - the number of successes increases
as the number of trials increases
- Make a standard sales presentation; your client
never knows whether it is in your own words or
- If you take good care of your clients, your
income will take care of itself. Clients' benefits
always come before your commission.