Status Quo Must Go
The Revenue Centric Business Case
Carriers regularly cite lack of budget as a reason for being unable to improve or replace their distribution management and incentive compensation platforms, but there is an argument to be made that carriers can’t afford not to improve or replace under performing platforms.
What’s the cost of maintaining a legacy incentive compensation platform?
Modern cloud-based platforms position carriers to address critical operational and strategic limitations that unlock business value in the form of cost reduction and increased revenue. While reducing costs is often the driver for the business case, carriers emphasizing revenue-centric benefits can build a more compelling business case that demonstrates a strategic vision that will more effectively resonate with key stakeholders and decision-makers.
The revenue-centric side of the business case is driven by the increased capabilities supported by the technological and functional advances of a modern cloud-based platform. Carriers are now free to impart strategy into compensation plan design, while also vastly improving the producer experience and reducing operational costs—a win/win/win.
Consider the impact of incentive compensation plan design without limitations—carriers can fine tune payout on higher margin products, reward producers for business quality, efficiently launch new products, and create competitive advantages in key markets. Advanced analytics and AI can add tremendous insights to support cross-selling initiatives, product placement, and customer profiling.
Modern cloud-based platforms easily support these strategies and deliver the capabilities, and time to market advantages, to drive growth and improve retention and margins. The financial impact of even minor improvements in these critical areas delivers return on investment that can easily exceed 100x that of a cost reduction-based business case.
Given the complexity of incentive compensation in insurance many carriers have adopted the “if it ain’t broke don’t fix it mentality”, but it is clear the status quo mentality is a far more costly proposition than investing in a market leading, cloud-based platform.
Ready to go deeper on this topic? OpenSymmetry’s strategy and advisory team offers high-level guidance and workshops on a non-billable basis.
