Turnover Rate

What Does Turnover Rate Mean?

The turnover rate is the percentage of employees who leave a workplace during a specific period. A higher percentage indicates a larger number of employees have left their jobs. Turnover can be either voluntary or involuntary.

Insuranceopedia Explains Turnover Rate

The insurance industry typically experiences a high turnover rate, particularly among agents, due to the competitive nature of the field. In 2015, Forbes ranked insurance companies as having the highest turnover rate.

While entering the insurance industry as an agent may be relatively easy—since some states do not require formal training or higher education—earning income through sales can be challenging, especially for new agents. Many people tend to decline rather than accept insurance offers. Agents who do stay in the industry often need their own coverage, including errors and omissions policies, and the cost of insurance agent business insurance is one more expense that new agents must budget for before they start earning commissions.

High turnover also affects insurance companies from an employer standpoint. Replacing and training new staff adds to operating costs, and those costs can factor into how carriers price their products. Employers in the industry are also required to carry workers’ compensation insurance for their staff, and frequent hiring cycles mean more administrative overhead tied to onboarding and compliance.