No company wants to lose employees. But for a smaller agency, the costs of turnover can be especially high. When you lose a valued producer, account manager, or salesperson, it can have a major impact on your business.
In the insurance industry, companies typically have a 50–70% employee retention rate. Clearly, this is an issue that many agencies need to get a handle on. From recruitment to onboarding time, the costs associated with turnover can add up fast, as we’ll explore more in a moment.
But smart recruitment strategies will help you find people who want to keep growing with you. Read on as we discuss what drives high employee turnover in the insurance industry — and how to correct this problem.
How Turnover Affects Companies
Replacing a staff member can cost 50–200% of their annual salary — and when you lose a high-performing employee, it’s hard to quantify the costs in terms of lost productivity and ability to scale. Good employees keep the whole team running smoothly and hold essential knowledge about the organization. They’re not easily replaceable, as the Society for Human Resource Management says. And if you end up hiring the wrong person, costs can rise even more sharply.
And then there’s the lost productivity from losing an experienced team member, along with the potential effects on morale. As a smaller agency, you have just a few people who hold relationships with customers and understand your processes, making turnover especially risky.
Projected growth in the insurance industry adds to the need to address this issue. For most insurance companies, staffing needs are expected to increase, writes Allen Laman in Insurance Journal. A recent survey found that 72% of agencies forecast revenue growth, with 90% of personal lines P/C firms and 68% of commercial lines firms foreseeing increased revenue, he notes. In particular, companies will need more experienced staff to handle technology, underwriting, and compliance roles, in addition to more entry-level staff in operations and claims roles. However, actual head counts aren’t growing as quickly as expected, Laman emphasizes. (From 2025, they rose by 0.81% instead of the projected rate of 1.42%.) Reducing turnover in the insurance industry will be a key part of this growth strategy.
Drivers of High Turnover in the Insurance Industry
When agencies suffer from these problems, they’re likely to see employees departing in higher numbers.
Task Overwhelm
In the typical agency, producers are overwhelmed. Sales staff are maxed out. A survey by Axis Capital reports that 9 of 10 insurance professionals experience high stress and anxiety, due to growing workloads. Stress can also create interpersonal challenges that never needed to exist.
A Vicious Cycle of Stress
The problem of high taskloads compounds when people leave. If you have a team of four people and you lose one, you just lost 25% of your staff. If you’re split between commercial and personal lines, you may have lost half of your staff in either area. Agencies suffer when this happens. It doesn’t have to be devastating in the long-run, but your growth is going to stop until you fix the problem. And employees who stay on the team carry a lot of anxiety, trying to handle their departed coworker’s taskload along with their own. Ultimately, this may drive more of them to quit.
Poor Division of Work
Poorly organized roles lead to inefficiencies and overloaded schedules. Instead of doing complementary work, employees might be handling the same tasks. A more thoughtful division of labor will create much-needed balance.
Ineffective Management Style
We’ve all heard the saying, “Employees don’t leave companies. They leave managers.” It’s not necessarily because the manager is unpleasant to be around. Plenty of nice people are bad managers. It could also be that the manager doesn’t share guidance or never gives them stretch assignments. Or, maybe the manager only gives constructive criticism after they’ve completed a project—or tends to micromanage. Both absentee managers and helicopter managers create an unsupportive work environment.
One recent study found that for 92% of U.S. employees, supportive management is almost as important as pay — and 89% of knowledge workers report experiencing increased anxiety at work. Their stress may often stem from management’s hyperfocus on tracking how they’re using every moment of their time, which undermines trust, the study suggests.
Lack of Growth Opportunities
People also leave companies when they don’t see a future for themselves there. If they can’t visualize a path for advancement, they might assume that if they stay, they’ll stagnate. In a small agency, there may be limited opportunities for promotion.
Now, let’s look at some tried-and-true strategies for boosting retention in insurance firms.
Best Practices for Reducing Turnover in Insurance Agencies
Reducing employee turnover in the insurance industry centers on lowering stress and supporting growth. By taking these steps, you’ll create a positive atmosphere where people want to work.
Focus on Strengths
People get burnt out from doing things they aren’t good at. If you have a good salesperson, you want them selling. You don’t want them leaving you for another agency where all they have to do is sell.
So, divide up the work in smart ways, based on each person’s strengths. Creating siloed departments focused on specific functions will let your team work more efficiently. People will then feel less overwhelmed and get to focus on what they actually like doing.
Hire the Right Support
Bringing on a virtual assistant in a supporting role will let your staff focus on their main area of skill, like sales or marketing. Hire a VA with the personality traits and expertise to do work that complements what existing staff are doing. Then, assign them tasks that don’t need to be done by a producer or senior staff.
A good insurance VA is already experienced in the industry and understands the processes. Plus, they’ll be doing the kind of work they love. They have a keen eye for detail and organization, whereas for your sales staff, those things probably don’t come naturally. So, it’s easy for a VA to dive in and start adding tremendous value early on.
Sometimes staff have trouble conceptualizing just how supportive a good VA will be. When we hired a VA named Charles to support a salesperson at my insurance firm, the agent thought, What am I going to do if he starts handling all of these daily tasks? But within a week, the agent changed his tune. This is great, he realized. I can make the sale and then hand over the follow-up to someone else. Basically, the VA started acting as his executive assistant, which ramped up his capacity to make sales.
Fine-Tune Your Leadership Approach
Ask employees for feedback on where you need to grow. Then, take steps to become a better leader. Define your leadership style, then take a course or read a book about it. Taking a servant leadership or transformational leadership approach will help you lead through intrinsic motivation.
Also ask yourself, “Am I providing the right level of daily and weekly support?” Share feedback at least a couple of times a week. Check in about how work is going regularly. But don’t overwhelm your staff with check-ins, or they’ll think you don’t trust them.
Provide Career Development
Incentives like promotions and merit increases (in the 3.3–4% range), along with enhanced benefits, have helped decrease turnover in the insurance industry, says Laman. But even more importantly, employees want opportunities for growth. So, show them how they can scale with your company. Talk about future roles they can aspire toward and how to prepare.
Prioritize Fairness
Strive to follow fair practices, giving everyone equal opportunities for advancement, stretch assignments, and incentives.
If, for example, you have two sales team members, give them the same support and opportunities for growth. Even if you think one might make a better leader, don’t make assumptions. You don’t want to create a self-fulfilling prophecy that leads to hurt feelings or resignations. Moreover, with the right support, people could surprise you. Someone who doesn’t see herself as a leader could learn to flourish in the role because of her emotional intelligence. Meanwhile, a more confident and extroverted employee might not actually be good at nurturing people’s growth.
By prioritizing fairness, you’ll keep morale high and foster a strong sense of trust.
Strengthen Work-Life Balance
Prioritize overall wellness, not just productivity. Taming workloads for overwhelmed employees will help with this. Encourage people to leave work at the end of the workday, too. If they’re still working long hours, talk with them about how to reprioritize.
As you focus on these areas, you’ll create a positive culture where people feel comfortable reaching out for support. Employees will feel valued and quality of work will grow stronger as they leverage their strengths in their daily work. That means when clients partner with us to hire virtual assistants, they don’t just see high retention of the VAs themselves. Instead, the whole team becomes more likely to stay with the company over the long term. They feel less overworked, more able to leverage their strengths, and more satisfied in their role.
Ready to talk about how a skilled VA could enhance your team’s efforts? Book a discovery call to start the conversation. I’ll be glad to talk more about strategies for taming employee turnover in the insurance industry by making smart staffing choices.