·
2 minute read
The individual health insurance industry is built on an independent distribution system with downlines and agents. These agents choose which products to sell to potential customers. So, how does a carrier ensure that the best agents are promoting their products as the first-choice solution? It starts with understanding what agents care about — getting paid.
Commission Systems are Unnecessarily Complex
Just as health insurance products have evolved and become more complex, so have commission structures. Most current commission systems are designed for P&C insurers or agencies, not for the specific needs of life and health carriers. These solutions also tend to be policy-driven, rather than agent or agency driven. As a result, the entire distribution value chain – carriers, FMOs, agencies, and agents – experience commission related pain points.
As carriers expand their independent distribution footprint, configuring, managing, reconciling, and paying commissions for multiple downlines via archaic systems is both challenging and time-consuming. Existing solutions not designed for health insurance lack the capabilities to manage numerous hierarchies, leading to labor-intensive workarounds such as creating and emailing spreadsheets to accommodate complex configurations or customizations. Payments calculated using legacy systems and manual processes that aren’t integrated are prone to errors and difficult to reconcile, causing confusion, aggravation, and delays.
Commission management can be extremely tedious and prevent carriers from actively expanding their distribution efforts. So, how can they meet their agents’ needs more effectively and efficiently while focusing on what really matters – driving sales? What agents want is simple – a digital commissions solution that pays them how they want to be paid – accurately, timely, and with transparency in understanding their payments.
Carriers and Agents are Frustrated
Current commission systems are failing carriers and their distribution partners, including agents. e123’s own research revealed that carriers' commission management challenges include:
- Offering flexible commission structures
- Automatically managing commissions for agents moving from one downline to another
- Managing a complex hierarchy of downlines
- Deploying flexible commissions by product, geography, agency, agent, date range, campaign,
- Freezing commissions for problem agents
- Requiring compliance sign-off before payout
- Onboarding and setting up new distributors quickly with commission schedules by product and state, potentially for thousands of agents
The limitations carriers face lead to frustrations for agents, including:
- Not getting commissions on a timely basis
- Not receiving digital payments on their preferred schedule (i.e. weekly, bi-weekly, monthly)
- Not seeing accurate, detailed commission statements that align with their enrollment history
As a result, carriers are inundated with complaints about errors and questions on payment details, or even worse, face agent attrition.
Simplify Commissions to Empower Growth
If it’s difficult to set up new downlines, it will be even more difficult to maximize distribution and growth. If agents don’t trust that they will be paid correctly and when expected, they will prioritize selling for other carriers that make it easy to get paid. In fact, 76% of agents said they would sell more for carriers who are easy to do business with. That means that commissions incentivize agent behavior and drive growth.
Commissions can become a powerful tool to attract new agents, motivate them to sell more, and retain top producers. Commission simplicity and transparency can also help carriers identify the strongest-performing agents by testing and modifying incentives over time to continually drive agent performance.
Gain a Competitive Advantage with Commissions
Fast, effective, and efficient commission payments are the best investment you can make in generating downline sales. Carriers who get commissions right will have a strong, lasting competitive advantage in expanding their distribution footprint for long-term business growth.
Those that invest in a digital commissions solution now will benefit from being the first to create a better experience for their distribution partners. This in turn will allow them to become easy to do business with and become the carrier that agents want to sell for. And it’s easier than you think with e123’s Commissions for Carriers. Learn more.
