Insurance Agent Shortage: Why Eliminating the Pre-Licensing Requirement for the Property & Casualty Exam Isn’t the Solution (2025)

pandcpacademy
Aug 15
3 min read

Why Eliminating the Pre-Licensing Requirement for the Property and Casualty Exam Doesn’t Solve the Insurance Agent Shortage

There are many changes currently happening in the insurance industry, with one of the most notable being the removal or reduction of pre-licensing education requirements in several states. While this might sound like a step toward making it easier to enter the Insurance Industry, the reality is quite different. Eliminating the pre-licensing requirement does not address the real issues causing the shortage of licensed agents—and in some ways, it may actually make them worse.

The Illusion of Accessibility

The idea behind removing pre-licensing requirements is simple: Reduce barriers and increase access. The assumption is that more people will become licensed if the process is made easier. But here’s the thing—unless the Property and Casualty Examination itself is also made easier to reflect this change, all we’re doing is creating unrealistic expectations for new applicants.

Without structured pre-licensing education, many aspiring test takers walk into the exam room completely unprepared. They underestimate how challenging the exam is, both in terms of content and structure. The result? More test attempts, lower pass rates, and ultimately, more frustration for test takers.

Louisiana: A Case Study

Take Louisiana, for example. According to the NAIC , in 2020—when pre-licensing education was still required—898 people took the Property & Casualty Exam, and 423 passed. That’s a 47% pass rate.

Then, in 2022, after Louisiana dropped the pre-licensing requirement, PSI data shows that 1,256 people took the Property and Casualty Exam, but only 541 passed—a pass rate of just 43%. That’s 358 more test takers....

Let’s put that in perspective. At an exam fee of $53, that’s nearly $19,000 more in revenue for the testing centers. Great news for them—not so much for the test takers who didn’t pass.

A False Sense of Readiness

The core issue is that the difficulty of the Property and Casualty Exam hasn’t changed. The questions are still as complex, the terminology still dense, the material is just as thick and the expectations are just as high. Without structured, guided pre-licensing education, candidates are left to navigate complicated material on their own.

According to WebCE, Chris Humphrey’s summed up the rationale behind eliminating pre-licensing requirements: “The industry is seeing a shortage of agents right now, so this would remove that barrier and make it easier for individuals to get a license.”

But the results show otherwise. We still have a shortage. Why? Because we’re removing the wrong barrier.

How to Pass the Property and Casualty Insurance Exam — Property and Casualty Examination

What We’ll Likely See in Other States

Pennsylvania, for example, dropped its pre-licensing requirement in April 2025. Based on Louisiana’s experience, we can predict what may come next: a spike in the number of test takers, but a drop in the overall pass rate. More people will spend time and money chasing a license they’re not adequately prepared for, and many will come up short.

What’s the Real Solution?

If we truly want to address the shortage of Agents, we need to focus on how to improve the passing rate nation wide for the Property and Casualty Examination. We need to take a hard look at why only 50-60% of test takers are passing the exam. Removing the only examination that is closest to the real life exam is not the solution. We need to look at those that have a high passing rate and follow what they are doing. Expecting test takers to read through the rigorous material on their own and understand the complex terminology, concepts, and tricky wording of the questions is only going to continue setting people up for failure. P&CP has been focusing on the test taker, what is it that student needs to actually understand what they are learning; how can we take this complex information, break it down into tangible concepts that are digestible, and be able to apply it on exam day. That's what we need to be focused on, and luckily P&CP has been for years. Having strong pre-licensing programs that actually help test takers prepare for the Property and Casualty Exam is key to address the shortage of Agents.

Removing those programs doesn’t make the process easier—it makes success less likely.

Instead of eliminating preparation, we should be improving access to quality education. offering flexible online options, and teaching the concepts in ways that are easy to understand without sacrificing readiness. That’s how we set up test takers for success—not by giving them false hope and sending them into a tough exam blind.