The Problem with Continuing Education for Insurance Agents

Depending on the state an insurance agent is located within, there are significant continuing education requirements.  They generally range from 20 to 48 hours, meaning every agent has to sacrifice upwards of a half a week to a full week every licensing period.

One good thing technology has brought to continuing education is greater options to complete those requirements at a lower cost.  Online options now allow agents to complete their continuing education requirements for less than $50 rather than hundreds.  In addition, it allows them to complete their courses in the comfort of their own office, further reducing the cost of lost hours and travel expenses.

While this is a positive aspect, the largest cost of continuing education is the time spent away from their duties.  Think about it this way.  Let’s assume you have an inside producer or CSR and an hourly wage rate of $20 an hour.  The cost of that employee not doing their work because of the time spent on completing their continuing education requirement is between $400 to $800, depending on the number of continuing education hours required.  This doesn’t take into account loss of revenue because lost opportunities because they were away from their desk!

The cost for the individual insurance agent is substantial.  When you consider the cascading effect on an entire staff, the cost to an entire organization it becomes staggering!  I’m not arguing against continuing education.  In fact, I believe it is critical and even crucial to our industry by forcing us to become better risk advisors to our clients. However, continuing education as it stands is failing to enhance or improve the skills base in the insurance industry.

I say it for a variety of reasons, one reason is the subject matter offered by continuing education providers.  When I began to consider becoming a continuing education provider, I researched the types of curriculum was being offered.  In particular, I was looked into what types of commercial lines courses were being offered.  The result was very disappointing.

Almost all the commercial lines courses available (online or in-person) were repetitive, to say the least.  Generally speaking, every continuing education provider was providing the same courses.  For example, every provider offered course work on commercial property on casualty coverages.  Based on the description alone, they focused on reviewing the primary coverage parts.  It’s conceivable an agent or broker could satisfy their entire continuing education requirement covering the same coursework over and over.

This factor points out another problem with continuing education.  Continuing education should be enhancing, improving and furthering the insurance agent’s skills and professional abilities.  Based on my observations, agents, brokers, and underwriters are not lacking general knowledge on what is covered.  They lack knowledge on how to identify loss exposures and just as important, use skills to design and structure insurance programs to cost-effectively protect against those exposures.  While understanding the application of coverage is important, it is not the same thing as knowing how to use tips and tools of our trade.   In my opinion, this is a skill which is on the verge of vanishing.

Another observation I made was requirements educators had to meet.  Standards of qualifications were almost non-existent.  Many states have no real requirement to become an approved instructor, beyond paying the required fee.  Based on my research, the most stringent requirement I’ve seen was a minimum of 3 years of experience in the insurance industry.  There was no qualification of the type of experience.  It should stand to reason that continuing education instructors should be some of the most experienced and knowledgeable people in our industry to pass it on.  Yet there seems to be very little outreach to tap into what these individuals can do.

In other cases, instructors are not selected based upon their knowledge but on their speaking ability alone.  This condition leads to less qualified or experienced individuals teaching others with a higher level of knowledge and experience.   It’s impossible not to see the absurdity of this approach.

At this time, our industry has a greater need for skills development than ever before as many of our most knowledgeable and experienced people will be retiring in the next 10 years.  The industry has been on a trajectory toward less expertise and knowledge for years when insurance carriers opted to eliminate training programs to trim costs.  In theory, continuing education requirements should serve to alleviate the condition, but it failed to do so.

In my opinion, here is what needs to happen to continuing education: First, states need to increase the level of experience required from new providers.  New providers should have to demonstrate a level of knowledge and skill.  Then providers should be restricted to teaching general topics and curriculum within their demonstrated area of expertise.

Even if the quality of providers improves, continuing education will still fail to develop skills if curriculum options do not improve.  If one does an internet search of continuing courses available you will find a plethora of online providers offering the same curriculum.  Each program covers personal lines and commercial lines policies.  The truth is they are basically pre-licensing refresher courses.  I’ve yet to find course offerings related to developing skills such as how to cover certain types of risks or how to design or even how to evaluate programs!

Personally, I’d like to see state insurance departments encourage a new curriculum designed to develop skills.  Perhaps by offering to waive approval fees for those courses which offer new and different topics.

I also feel states need to monitor and track which subjects are taken and require greater variety studied by agents.  For example, if they notice Agent A has taken 2 courses on General Liability from 2 different providers, they will be notified by the insurance department they’ve already studied general liability enough and need to take other course topics.  Retaking the same topic over and over does not advance their skill or knowledge base.

Never before has continuing education been more critical in the insurance industry as the “brain drain” marches on.  In years past, every major insurance carrier trained its underwriters through training programs usually lasting up to a year.  Those training programs provided the industry with a ready pool of skilled individuals who really knew their stuff!  It created a ready pool for agencies and brokerage houses to recruit from.

However, most insurance carriers no longer train underwriters.  It’s taken a while but that fact has finally manifested itself with many professionals lacking sufficient knowledge of many fundamentals.  In theory, continuing education programs could help fill the void.  Unfortunately, continuing education is not really taken seriously by providers or the state department who regulate them.

Nor is continuing education taken seriously by agents and brokers who are required to complete it (in my opinion).  My observation shows agents look for ways to satisfy the requirement as cheaply and as quick as possible so they can get back to the business of selling insurance.

Continuing education needs to change!  It needs to change fast before those that understand the fundamentals are gone for good.

About Richard Faber

Richard thinks of himself as the underwriter’s underwriter. For almost 40 years, He has underwritten and managed commercial lines underwriting departments for a variety of organizations including large national carriers, MGA’s, specialty carriers and surplus lines carriers. He has helped major organizations develop cost-effective risk management programs through the use of captives, large deductibles, self-insurance and retrospective rating plans for high profile organizations such as Major League Baseball teams, NFL teams, major automobile manufacturers, consumer electronics companies, and national retail chains. In 2018, Richard retired from active underwriting to form Underwriter’s Resource, LLC, an organization dedicated to enabling agents improve their delivery of commercial insurance though improving skills and by creating computer programs to reinforce those skill. Richard enjoys sharing his knowledge, wisdom and expertise and can be contacted via email at Richard.uwresource@cox.net.

2 thoughts on “The Problem with Continuing Education for Insurance Agents”

  1. Great post! Continuing education is definitely needed. I talk to far too many people who think the last change to insurance products happened in the ’70s. (And these people are younger than I am!) We should all take the opportunity to learn something new, something specific, something out of our comfort zone. If we’re going to sacrifice a week’s time to CE, it should be meaningful, and not something to sleep through.

    I hesitate to think it is the state’s responsibility to track coursework, but I suppose there is no other entity with the wherewithal to track this. A large company would have a compliance group who could consider the level of learning, but too many of us are independent.

    Reply

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