INSURANCE INDUSTRY COMPARISON


GAMA, (General Agents and Managers Association) recently sponsored (the actual study was conducted by AZinsser Consultancy a firm of professional Psychologists) a major research study. The GAMA study compared the predictive value of the Banks & Weitzul Salesperson Selection System with the Insurance Industry Standard selection device known as the Career Profile as provided by LIMRA (Life Insurance Marketing and Research Association).

At the behest of GAMA, all the data for the study was collected, analyzed, and reported on by AZinsser Consultancy. The study tracked the sales performance of new insurance sales agents for two major insurance companies for a period of almost 2 years. Specifically, over 200 agents completed both the LIMRA Career Profile test and the Banks & Weitzul Questionnaires and then their sales performance (premium, commissions, number of policies lapse rate, etc.) was measured over almost two years.

The results of the study were quite dramatic. The Banks & Weitzul System out-predicted the Insurance Industry, LIMRA test by a ratio of 7 to 1. That is, the Banks & Weitzul System was seven times better than the LIMRA test. One table from the study is presented below.

B&W Score by First-Year Total Commissions

 

LIMRA Score by First-Year Total Commissions

The table, "Insurance Company Dollar Value of the B&W System" summarizes part of the study. The top half of the table shows the B&W Rating Scores (1-5) and the actual commissions earned by the sales personnel, (0 - $5,000). The higher the B&W Rating Score, the greater the expected commissions. As you can see, each B&W incremental Rating Score from 1-5 correlates with higher commission sales.

The lower portion of the table compares the LIMRA Rating Scores (3-19) and the actual commissions (0 - $5,000) earned by the sales personnel. Again, the higher the LIMRA Rating Score the greater the expected commissions. However, as you can see, salespeople with the (relatively low) LIMRA Rating Scores of 6 and 9, out performed the individuals with (the highest) LIMRA Rating Score of 19. In other words, sales people who received low LIMRA Rating Scores out-performed salespeople with the highest LIMRA Rating Score. This inverse relationship is just the opposite of what you would expect.

The results of this study show that the Banks & Weitzul System is better at predicting when salespeople will be both more and less successful than LIMRAs test. In fact, the LIMRA test rejects many more candidates (than B&W) who can/will be successful in insurance sales and recommends many more (than B&W) candidates who will fail in the business of selling insurance products.

The B&W system is clearly superior. And these results do not take into account the additionally positive effects of interviewer training, supervisory coaching or salesperson/sales manager matching. The use of each of these Banks & Weitzul factors will improve the effectiveness of the B&W system.

The actual AZinsser Consultancy report to GAMA is largely written for a professional audience. It is not easy to read. However, you can request the entire report by emailing JWeitzul@princeton.com. or Download Now (MS Word 97 145 KB).