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Enterprise incentive management (EIM) systems quickly have emerged as the leading alternative to traditional processes for managing producer relationships and compensation.
Designed to support the complexities of incentive compensation management, EIM leverages technology to offer flexibility and scalability, as well as best-of-breed functionality that support large multi-product and multi-channel environments. These features have become necessities as insurers continually strive for channel dominance, where diverse distributor networks help create and sustain competitive advantage and, in turn, drive shareholder value.
Fueled by this desire to increase company revenue and profitability, carriers are actively transforming their field forces by leveraging enterprisewide compensation solutions as a means to achieving this goal.
For most insurance companies, the management of distribution channel compensation has been undervalued greatly as a means for increasing sales activity or reducing costs. While historically seen as an administrative back-office process, this viewpoint is rapidly changing as insurance carriers evaluate the tools necessary to support a shifting distribution landscape brought on by new market pressures and marked by complex distribution relationships. EIM systems steadily have gained importance in many organizations, as strategic initiatives focused on increased sales and profitability are driven by the management and transformation of a carriers distribution force.
In addition, this move toward diversifying distributor growth and management has exposed glaring limitations and gaps in the standard practice through which most large insurance carriers service and incent their producers. The chasm only widens as one travels to the systems application level, where rapid response to shifting business drivers has challenged information technology groups to keep pace with market demands. The emerging struggle of complex business initiatives outpacing current system capabilities has further pressed the need and desire for alternative solutions.
Leveraging EIM Solutions
Carriers have long realized that the best way to motivate is through the wallets of individual producers, where commissions drive loyalty and performance. The better a carrier can manage and adapt the sales process, the more likely that it is perceived as a market leader. This focus on retaining top agents has led many insurers to evaluate what incentive processes best motivate and align their field force and distribution channels.
New methods, which embrace various facets of an agents relationship with both the end consumer and the carrier, have lead to the development of dramatically different compensation programs. Diversification of product offerings, performance measures and roles is re-defining the compensation landscape and helping insurers achieve market presence through agent loyalty and product innovation.