Historically, managing and paying producers has been an afterthought. But the topic now has to be addressed.
Producer management and compensation is an essential downstream process and a critical component of the insurance value chain. It is in place before a policy is even sold and extends all the way into billing and claims. It occupies a unique place in insurance organizations, connecting data, processes and people in distribution, marketing, actuarial, operations, finance, servicing and even human resources. To attract and retain producers and encourage more sales, insurers must:
--Meet evolving producer expectations to increase the ease of doing business and service them in an on-demand, omni-channel manner.
--Design attractive and flexible compensation plans, administer them accurately and ensure timely payments via preferred modes.
Historically, transforming this integral function hasn’t been top of mind at insurance companies. However, producer management and compensation transformation has recently become a hot topic. In this two-part blog series, we’ll lay out the current landscape and share what we’ve seen in successful transformations.
See also: 5 Rules for Hiring Quality Producers
First and foremost, transformation is all about what matters to you most and where you, as an insurance leader, want to create the biggest impact for the function and the producers you serve. Contrary to popular belief, not all transformations require platform replacements; in fact, many can be surgical enhancements to your current state (e.g., service-focused operating model improvements and enhancement of distribution capabilities for the field through digital portals). However, there exist key business drivers that can significantly affect your business and help anchor these efforts. These drivers, which we list below, answer the fundamental question, “Why transform?” and can help you make the case for change:
See also: Key to Digitizing Customer Experience
- Service-oriented operating model, to deliver differentiated experiences and effectively manage demand via a producer-focused, service-centric operating model.
- Producer self-service, to increase access, transparency and visibility through a service-centric platform with producer portals that enable easy viewing and generation of reports and statements.
- Optimized operational efficiency, to create efficiencies throughout the organization and provide flexibility to administer and manage compensation.
- Increased process automation, to provide operational efficiency and accuracy with centralized automated processing and administration.
- Data-driven decision making, to provide insights that can generate greater productivity from producers and operational teams, as well as explore analytic endeavors like incentive analytics and penetration models.
If these drivers resonate, then you know the “Why?” Your next question is likely, “How?” This is where most insurers are tempted to issue an RFP, start a vendor bake-off, mobilize teams and start implementing. However, as we address in the next post, there are key considerations before starting this journey that will help you create an overall vision, establish guiding principles and provide a framework to stay true to your business drivers and transformation goals.