Sales Force & Broker Compensation: Standardization & Consolidation

Client Project

  • In a project intended to standardize processes and to migrate sales and broker compensation for all lines of business to a common platform ("Common"), PPI assisted the Client by conducting a detailed current-state analysis and comparison of broker and sales force compensation processes for all lines of business, analyzed the compensation models for brokers and sales force, and documented recommendations to facilitate effective future state design and development.
Business Challenges
  • The Client sells a large variety of insurance and financial products through a large number of separate sales channels. The client uses both its own sales force and external agents/brokers. All sales channels receive sales-related compensation according to different rules via different line of business-specific processes and systems.

  • The processes needed to manage compensation for the internal sales force are substantially different and simpler to manage than those of external brokers and agents.

  • Many of the process differences between the various lines of business in how compensation was handled reflected actual differences in the products and sales processes, e.g. rapid volume-based sales of standardized insurance products to small businesses vs. lengthy negotiation cycle & relationship focus of sales to large corporations. Other differences were required by different regulatory regimes, some were artifacts of the systems in use, and some were simply different practices that had developed within the separate organizations.

  • A vendor for the consolidated compensation platform was selected and development of the system begun over a year before any work began to document current state processes or gap analysis; despite significant cost, very little demonstrable progress had yet been made.
Specific Recommendations and Outcomes

PPI identified opportunities and helped bring the following improvements to fruition:

  • Standardize sales force compensation processes for the Small Market and Mid/Large Market lines of business where standardization would be practical and create efficiencies without requiring manual workarounds, e.g. automate and standardize reporting, referrals, and sales force status updates.

  • Developed detailed analyses of the current Compensation Business Models for both broker and sales force compensation, and proposed future target business models, including strategy and approach, future state process diagrams, and recommended changes and improvements from current processes for both target and interim future states.

  • Reduce non-value-added activities in sales force licensing by automating the Licensing & Appointment validation process and moving the process up in the flow to a point before the sale is released to the Compensation team.

  • Streamline broker License and Appointment processes to reduce L&A compliance and non-compliance risk, eliminate duplicate, non-value-add steps and significantly improve Broker Operations process efficiencies.

  • Improve Common project ROI by prioritizing future deployment phases based on business impact and ensure that the sequence/schedule of phases accounts for cross-organizational technology and process interdependencies.

  • Significantly improve Broker Operations process efficiencies by streamlining Broker Operations processes via workflow automation/integration tools, reducing the number of systems needed to track and complete work, and reducing waste by improving the quality and completeness of inbound requests.

  • Automate Broker payments in the MLM/NA channel as much as possible to significantly reduce process inefficiencies and financial risk associated with manual payment calculation and processing.

  • Reduce risk and improve the quality of Small Market case setup for broker compensation by redesigning case set-up processes and/or providing targeted training to reduce error rates, ensure compliance with Agreement and W-9 requirements, and reduce inefficiencies caused by re-work and mistrust of the original case set-up.

  • Summarized the Group's SLA's to key stakeholders and the paths to analyzing accompanying resource allocation decisions.

  • Analyzed operational activities in context of the client's goal to focus more on their core operations & businesses. Resulting recommendations centered on the feasibility of outsourcing certain activities.

  • An Outsourcing Implementation Plan on outsourcing functions was prepared and approved by client operations locally and abroad.