Transparent insurance

In the world of insurance, independent distribution channels or large numbers of non-captive agents and brokers work together to sell a product. So what motivates a sales force and pushes them to sell one product over another? Incentives drive and influence behaviour and it is that behaviour that affects a company’s bottom line.

The management of compensation schemes, however, often lack a key element: transparency.

From a channel perspective, many independent brokers and agents are simply unclear about their achievements against goals and corresponding payments. In the highly saturated insurance market, if you don’t incentivise accurately, it’s likely your channel will find a competitor who does.

Closer to home, insurers lose millions each year due to inaccuracies or mistakes in payouts and risk de-motivating their sales force (and likely the channel network as well). Some sales people even misdirect valuable time by ‘shadow accounting’ their expected commissions. It is not surprising that this often leads to disputes and more wasted effort.

To gain transparency, insurers need an IT-solution that provides every detail of every agent or broker in an organisation and distribution channel. Insurers must be able to track agent/broker demographics, licenses, appointments, continuing education, contracts, as well as payment schedules and have the ability to see the above in relation to dispute resolution, analytics and reporting tools.

The leading software solutions in the market have a built-in flexibility to allow insurers the visibility and transparency to motivate a sales team to drive revenue, quickly release new product lines, set appropriate sales forecasts and drive sales performance to meet them.

Transparency gives management the opportunity to undertake historical and modeling analysis and more accurately forecast commission payments. This helps drive the insurance business forward and significantly aids the optimal timing of product launches and promotions.

As insurers are faced with the task of managing this process for distribution channels and large numbers of captive agents or brokers, transparency is key to ensuring this process is strategically planned and completed accurately.

While simply paying the distribution channel the correct amount of compensation in a timely manner is a good first step, organisations can truly transform their business and reap the rewards of increased sales and a highly motivated sales force to meet the goals of the business by implementing and using sales performance management software.