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Automating Incentive Compensation Management to Strengthen Broker Trust

In the insurance industry, incentive compensation management is a fine art. Ideally tied to organizational strategy, incentive compensation programs need to foster a culture of selling, drive the desired performance, and support sustainable growth in the organization.

Of course, modeling, building, distributing, and managing compensation plans can be extremely complicated. There are numerous metrics and rules around the amount of money brokers can earn that need to be put in place. Then there’s the process of calculating commissions and paying brokers accurately and on time.

However, many salespeople are often on the receiving end of commission errors made through manual processes. Sometimes, they lack visibility into calculations giving rise to compensation disputes and the organization having to spend considerable time and resources to resolve disputes post payment. These issues can create significant financial repercussions and impact the morale of salespeople, impinging on their ability to perform at their best.

Shoring up an improved experience requires an investment in intelligent technologies and processes. Success comes from automating incentive compensation management and providing real-time visibility to brokers and agents. Transparency in transaction amounts and credits helps restore broker confidence while reducing risk, payment errors, and potential disputes.

Streamlining incentive compensation management

Owned and backed by Massachusetts Mutual Life Insurance Company (MassMutual) – one of America’s oldest and most reliable life insurers – Haven Life Insurance Agency LLC (Haven Life) is reshaping how people protect their loved ones.

The company offers end-to-end online purchasing of term life insurance policies, successfully transforming a complex purchase and approval process into an online transaction that takes about 20 minutes to complete.

Haven Life also sells term life insurance policies through its network of 100,000 distributors, agents, brokers, and career advisors. For the firm, managing incentive compensation management was a highly manual process. It required working with complex compensation agreements for different types of agents and a patchwork of systems and processes. This meant Haven Life had limited visibility for sales performance management and was only able to process compensation payouts twice a month.

Modernizing inefficient processes

To reimagine incentive compensation management, Haven Life deployed the SAP Commissions solution, creating one streamlined, end-to-end process from sales order to payment. With comprehensive reporting and insights, the firm optimized sales management functions and enabled greater sales and commissions transparency – helping it strengthen broker trust and retain top sales talent.

End-to-end process from sales order to payment

Taking centerstage at SAPPHIRE NOW Converge, Bharat Rao, product manager at Haven Life Insurance Agency LLC, tells the story of how the insurance start-up reimagined incentive compensation management. In this fascinating, 20-minute conversation, he describes how the organization took a top-down and bottom-up approach to operationalizing incentive compensation processes. The company shared positive feedback on efficiencies, productivity gains, and speed of commission payments from early adopters, which smoothed buy-in and adoption for the wider business.

For further reading, take a look at the business transformation study, “How Does Streamlining Incentive Compensation Management Boost Operational Efficiency?”

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