Top 6 Tips to Overhaul your Insurance Compensation Management Process
By Fernando Larez – @mando_vzl – Marketing Manager at @VUESoftware
Industry experience comes with time. At VUE Software, that is 110 years to be exact. The VUE Software executive team has more than 110 years of combined industry experience including a priceless insight on how the insurance business has evolved, and what are the best practices to adapt to an ever-changing marketplace. With this in mind, we will be sharing some of this knowledge to help you identify the path for revenue growth within your organization.
As a carrier or agency decision-maker faced with the possibility of improving your technology, you might ask, “What’s in it for me?” That’s a good question — particularly when it comes to compensation management.
Like many other insurers, you may have found that compensating producers involves unnecessary expenditures, time-consuming error corrections, convoluted spreadsheets and difficulties designing and communicating incentives. With our longstanding expertise in insurance distribution, we’ve been addressing these and other common challenges for more than 23 years. We recommend certain critical best practices that help you leverage compensation management technology to improve efficiencies and increase revenue.
Let’s look at some areas where best practices can benefit you:
Commission accuracy: Commission underpayments and overpayments can be costly in terms of potentially missing revenue, labor-intensive resolution efforts and disrupted business relationships. By automating compensation processing, you can ensure accurate commission calculations that include revenue reconciliation and chargebacks along with traceable audit trails. Getting it right the first time sharply reduces time-consuming support calls and eliminates hassles.
Hierarchy management: Complex hierarchies mean complex calculations, multiplying opportunities for errors. An automated solution accommodates an unlimited number of hierarchies of any complexity and still delivers accurate payments. That’s a huge value in terms of operational efficiencies and the ability to assign hierarchies as needed.
Database consolidation: Multiple databases with no single source of truth can waste time, involve intricate workarounds and drain profits. A modernized system makes accurate commissions and seamless hierarchy management possible by consolidating all producer records into a single database. You can track hierarchies with certainty without conducting database cleanups or trying to match inconsistent records.
Incentive design: You might have a strategic incentive program in mind, but can your system implement it? Will producers know about it? We suggest an automated solution with analytics that empowers you to design complex bonus and incentive programs. You can target unique products, prospects, producers and territories and successfully push incentives out to the channel.
Sales promotions using game-like programs: Some insurers are losing ground to competitors because their systems lack gaming capabilities. Today’s best practices include gamification, the use of game-like incentives to encourage producers to compete with each other in a fun way. Agencies can also compete. The result is increased revenue for producers, agencies and carriers. The right solution lets you customize and communicate incentive programs so producers can see opportunities and track their performance against their peers. Trophies, stars and other graphics display the rewards.
Channel relationships: If it’s difficult or inconvenient to work with a particular carrier, top producers often go elsewhere. Producer satisfaction is a by-product of best practices. It goes hand-in-hand with revenue increases. An automated system makes it easy for producers to sell without distractions or problems and get paid correctly, right on time. The system’s accuracy and reliability promote good agency/carrier relationships, too.
Where does your organization stand with respect to best practices in compensation management? Share your thoughts in the comment box below.
If you’re in need of an automated system, VUE Producer Compensation could be your ideal solution. Contact one of our insurance professionals for a custom demo of VUE Software just for your organization here.