Simplicity is the ultimate sophistication: How life insurers can streamline incentive compensation for their producers

April 2013

Overview

The complex web of compensation schedules that has evolved over time is reaching a critical mass. The demand for simplicity and transparency in producer compensation is arising from demographic, industry, and regulatory factors.

We have observed carriers struggling with a proliferation of schedules and incentives that are not aligned with strategy, while leading carriers are establishing the flexibility to craft compensation that aligns with corporate goals. Once this flexibility is established, carriers are better able to distinguish themselves from competitors in agents’ eyes. In our view, carriers should reduce the overall number of plans offered before replacing the underlying systems supporting incentive compensation. Without simplification before system transformation, carriers will re-platform legacy problems and miss out on many possible benefits.

Contact us

Paul Livak
Director,
Advisory Services
Tel: +1 (718) 496 7460
Email

Jim Quick
Tel: +1 (312) 298 6882
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Matthew Hurlbut
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Paul McDonnell

Tel: +1 (646) 471 2072
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Jamie Yoder
Insurance Advisory Practice Leader
Tel: +1 (312) 298 3462
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Chris Box
London region Tax leader
Tel: +44 (0)20 7804 4957
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