The Evolution of Sales Incentive Tools and Their Impact on the Insurance Industry

Sales cannot move an inch without incentives. 

For the simple reason that it's not easy to survive without motivation in sales. 

People need that validation, that appreciation, that push to keep going. 

Today, this push comes with not just the promise of getting a monetary reward in the future. But in the clarity and visibility into how much they earned, when they will receive it, and the actions that will contribute to this earning.

Especially in the insurance industry, where the sales cycles are long, the product is hard to sell and the competition is high- your sales reps need clear and reliable incentive information.  

So, it is not the incentives themselves that drive motivation, but the system that powers them.

That system is your sales incentive management tool. 

In this article, we will discuss: 

1. How sales incentive tools redefined the insurance industry. 
2. Why are they an important part of insurance sales? 
3. Why are they no longer 'value-addition' for your reps, but a necessity?
4. And why Kennect is the #1 choice for Insurance companies.

Let's begin. 

A brief overview of incentives in insurance:

Sales incentives in the insurance industry have taken a paradigm shift. 

They evolved from being one-directional to being dynamic; from being volume-based to value-based. 

Traditionally, insurance incentives were commission-based. You sell a policy, you get a commission. 

The number of policies sold was what mattered. 

As competition tightened, companies started looking at the long-term goal- customer value. 

It was not just about how many policies you could sell but how long you could retain them with the company. 

With this shift, KPIs also evolved. New policies were not the sole criterion for incentives. It became just one among the many KPIs.

Now focus was placed on customer retention, upselling, cross-selling, and overall business success.

Today, the insurance industry has become dynamic in its approach towards incentive compensation.

Customization and personalization are priorities now. 

Companies are stepping away from the idea of mere commission-based compensation. The trend is to take a holistic and diversified approach that ranges from monetary to non-monetary incentives. 

But this can be chaotic at times.

With insurance agents having different sales roles, various types of policies, compensation structures, commission rates, performance targets, and milestones, the complexity becomes layered.

As a result, admins find it difficult to manage complex calculations. While the sales agents are left with limited understanding and visibility into how their incentives are calculated and what they’ve earned.

This is where ICM tools stepped in as life savers. 

With their automated functions and AI-powered features, these tools turned incentive management fairer, faster, and more functional.

7 Key Impact Areas for ICM Tools in Insurance

Surely with the incentive trends evolving each day and the complexity increasing, the need for a support system is crucial.  

This is where sales incentive tools are built to deliver.  

Here are  7 impact areas in insurance where sales incentives drive outcomes: 

Commission Accuracy

In the insurance industry, commission calculation can be complex. Factors like policy type, deal size, client profile, and tiered structure can complicate the process. 

With ICM tools, these rules and calculations can be automated. This eliminates manual errors and delays and ensures accurate and timely payouts.

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Performance Visibility

Sales agents often work on multiple policies at different stages simultaneously. New policies, renewals, upselling and cross-selling. This juggling of tasks leads to sales agents lacking clarity on targets and the commissions they earn. 

ICM tools give agents instant access to their performance and earnings. This real-time visibility motivates agents and enables managers to spot trends and support their teams. 

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Plan Personalization

The insurance industry has different sales roles working on different types of policies. There are new business agents and renewal agents. There is insurance from life, health, and home to automobile policies. This diversity means a one-size-fits-all approach cannot give expected outcomes from all agents. 

ICM tools customize and tailor incentive plans according to each agent's role, policy type, and performance goals. This approach ensures that all agents feel motivated to achieve their respective performance, goals, and rewards.

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Payout Transparency

If your sales agent doesn't fully understand the possible commission they can make from insurance selling, you are missing out on their full potential. 

ICM tools provide easy-to-understand reports to agents that clearly explain how their commissions are handled. It provides clarity and a better understanding of commission calculation and distribution, KPIs, payout timings, etc. 

This transparency helps agents see exactly how their hard work gets translated to earnings. Making them motivated, confident, and engaged. 

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Regulatory Compliance

Insurance companies must comply with audits, legal standards, and industry regulations when compensating sales agents. With multiple sales roles, varied policy types, and complex commission structures, maintaining a proper sheet becomes challenging. 

ICM tools automatically track all transactions, making audit trails seamless. They maintain a clean record of payouts that ensure incentive plans align with industry regulations. This reduces the risk of compliance breaches and improves trust with stakeholders. 

In short, ICM tools make your financial records clean, fair, and compliant.    

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System Integration

For an accurate and timely payout of incentives, the admin requires data. The policy type sold, the premium amount, the commission rate, the agent role, and their tier, and KPIs are some of the key inputs needed for commission calculation. 

ICM tools can be easily integrated with other tools like CRM, payroll software, and policy administration software for easy access to the required information. It acts as a central data hub making operations streamlined and smooth. 

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Strategic Decision-Making

Insurance is a competitive industry where every decision determines whether you thrive or dry in the race. This shows the importance of making decisions based on insights and strategy. 

To facilitate this strategic decision-making, the ICM tool can act as a central hub. It provides insights on all areas of sales from agent performance to incentive effectiveness. These insights help you make informed decisions for better success and growth. 

You see, the ICM tool is a whole package. It ticks every box in your checklist. Want commission accuracy? Done. Better visibility, transparency, and personalization? Done. Done. Done. 

It even makes compliance and decision-making seamless. Double tick. 

ICM is not just a tool you choose to have or not -it’s a necessity of today's insurance industry. The tool that helps you win before the game even begins.

What is the relevance of ICM in insurance?

With all the complexity involved in insurance incentives, ICM is your best ally. 

There are multiple roles, varied policies, and complex structures that make it a real challenge.

A new business agent gets a different commission rate than a renewal agent. House insurance has a different premium structure than life insurance. To top it all off, agents work with diverse client profiles each with unique risk factors, policy sizes, and coverage limits. 

These variations significantly influence the bonus structures and keep adding to the complexity of the incentive plan. 

Think of a human being sitting to track and calculate the commission for a timely payout. Not to mention the errors with manual processes and disputes due to lack of clarity. 

ICM simplifies it for you. 

No manual entering of data. No sitting and calculating commissions. No asking for basic or additional information from others. 

All are readily available and accessible HERE. 

ICM provides real-time visibility for everyone. The manager wants to know how much their team has achieved- information accessed. The sales agent wants to know how much they have earned- right there on the dashboard. 

Guaranteed agent satisfaction. Guaranteed managerial empowerment.

When you can automate the process, build trust and transparency on the system and ensure everyone’s satisfaction then why hold back?. 

It is this simplicity with seamlessness, trust with transparency and performance with precision that makes ICM relevant in the current insurance industry. 

How Kennect helps insurance companies with our ICM tool

Let us explain with a case study. 

Star Union Dai-ichi Life Insurance (SUD Life) is one of our first insurance clients. 

SUD Life is a joint venture between two of India's leading public sector banks, Bank of India and Union Bank of India, and Dai-ichi Life Holdings, a leading life insurance company in Japan.

The organization faced serious structural and communication issues. 

They had a 7-level hierarchy, 5000+ users, 4 sales channels, and multiple incentive schemes managed by three siloed teams (BIU, Sales Strategy, and Calculations). The undefined data flow and team coordination between these teams added to the complexity. 

On top of that, insurance-specific requirements like product-wise weightages, persistency metrics, cost-output analysis, and transfer promotions added further layers.

When they realized that these complexities were beyond the limits of spreadsheets, they decided on automation. They found the right fit in Kennect.

We offered them all the support they required. 

✅End-to-end automation for complex insurance structures across hierarchies, channels, and schemes.
✅Quick configuration of incentive calculations that go live within minutes.
✅Built-in approval workflows that ensure accuracy before payouts.
✅Handling of product weightage changes down to the day.
✅Calculation of persistency and vintage.
✅Management of cancellations with recovery workflows.
✅Scenario modeling to test incentive impact.
✅Real-time nudges that keep sales teams aligned and motivated.

What difference did it make?

🏆5% increase in sales productivity.

🏆66 % reduction in time spent on incentive calculations.

🏆75% reduction in queries related to incentive payouts.

This case study of SUD Life shows how Kennect can streamline even the most challenging incentive processes. 

Today SUD Life handles incentives efficiently, makes data-driven decisions, and drives growth. 

Conclusion

The insurance business is competitive. Insurance incentives are complicated. 

To ease the complexity and be on par with the competition what you need is a good incentive compensation management tool. 

One that gives real-time visibility, transparency in the process, clarity in the calculation, and streamlines the entire process. 

That is where Kennect comes into the picture. 

With Kennect you are not upgrading your incentive management. You are making a fundamental shift.

Today we provide a seamless, no-code experience that enables even non-technical users to easily build, manage, and optimize incentive plans. 

We are purpose-built to align with your business needs. That is why Kennect’s plug-and-play functionality ensures rapid deployment with minimal effort and helps you hit the ground running.

We have only scratched the surface here. To know more about our product Book A Demo with us NOW.