Young Agent Optimism Wanes as Challenging U.S. Economy, Hard Market Continues Andrea Wells

April 17, 2023 by

Optimism among young agents took a hit, falling from 2022 to 2023, according to Insurance Journal’s annual Young Agents Survey.

When it comes to their career choice and the future of the independent agency system, 53.9% of young agents responding to this year’s survey reported they feel “very optimistic” about the outlook of their career, down from 62.4% of respondents who felt “very optimistic” in the 2022 survey.

Young agents felt less positive about the future of the agency system, as well, this year. According to the survey, only 38.7% of young agents felt “very optimistic” about the future of the agency system, compared to 47.2% in the 2022 survey.

Young agents felt even worse about the condition of today’s U.S. economy, the survey found.

Only 4.1% of young agents responding to this year’s survey felt “very optimistic” about the outlook of the U.S. economy in 2023, while just 11.9% reported feeling “optimistic.” That’s down from 6.4% of young agents responding to the 2022 survey who said their view on the U.S. economy was “very optimistic” with 17.5% as “optimistic.”

Nearly one-third of young agents (30.9%) do not feel optimistic about 2023’s economy at all.

“It would be reckless not to be cautious given the current state of the U.S. economy,” one young agent wrote in the survey. “However, being further removed from the initial pause created by the pandemic has me optimistic about the future success of my agency as well as me personally.”

Another young agent said: “I’m concerned about my clients, and how they will be able to afford these never-ending premium increases,” adding that it is challenging to write new business in urban and coastal areas today.

Another young agent blamed the negative outlook on the industry’s need to catch up to other economic sectors when it comes to efficiency.

“There is a ton of room for improvement on the independent side for both PL and CL as it pertains to technology and efficiencies. We’re lightyears behind other industries,” that young agent wrote.

Despite their concerns, more than half (58.3%) of young agents reported feeling “very optimistic” that their income will be greater in 2023 than in 2022, with another quarter (26.3%) feeling “optimistic” that their income will rise this year over last year’s.

While most young agents (82.0%) told Insurance Journal they would recommend being an insurance agent to another young person, there were some (6.6%) who wouldn’t recommend the career to others.

“This is the worst white-collar job there is,” one respondent said.

Another added: “They have to be willing to be underpaid for a couple years and that is not for everyone.”

However, many young professionals responding to the survey believe a career as an independent agent can offer great opportunity.

“It is a good career with room for lots of growth,” one young agent wrote. “If you put in hard work you can definitely see it pay off.”

Another added: “To be a good agent you cannot think of this career as just a job you clock in and out of every day. It is a lifestyle or mentality to want to help and serve others. Writing an improper insurance policy is someone else’s livelihood that will not be made whole. You have to care about your clientele as they put their trust in you.”

There were some recommendations by young agents on what they would change about the property/casualty industry.

In today’s hard market, policy pricing stood out as a barrier for some.

“I would like to see rates be somewhat consistent verses being a roller coaster like some carriers are doing today. This makes doing renewal business hard especially when you want customers staying with that carrier you originally put them with unless violations or accidents happen which force them to move elsewhere.”

Another young agent said: “I would like carriers not to be able to ‘double dip’ in the markets, for example, changing their replacement cost calculators due to inflation and doing a rate increase on the policies at the same time. To me that is taking from the same insured twice.”

Young agents also wish for better efficiencies through technology, more diversity in leadership, more support from their carrier partners, and an upgrade when it comes to professional standards for agents.

“I believe it should be harder to achieve your insurance license,” one young agent said. “There are a lot of bad apples … being unethical gives the whole industry a bad rep.”

Another said the industry is “several decades behind in its use of technology,” adding that “the lack of technology available to the end consumer is disappointing.”

One young agent said they hope for carriers to support independent agents more. “Although they say they do, they will go and make deals with independent agents’ competitors to support their own causes.”

Another added: “I would like to see carrier employees take more time to try to understand an agent’s day-to-day tasks and help alleviate some of the pressure from carriers by understanding positions and trusting their agents more.”

The annual Young Agents Opinion Survey by Insurance Journal polls the views of independent agents 40 years old and younger. About 200 young agents responded to this year’s online survey, which ran online during early March.