Optimizing modern business efficiencies is primarily about concentrating on core business activities and strengthening the bottom line. Anything that facilitates this process is an encouragement in the modern business scenario. One of the sectors where it you will find its significance is the insurance industry. The major role of insurers is devising and structuring new policies and selling them. But to sustain this task there is a need for huge investments in infrastructure and manpower. This is something that they can ill afford if they have to bring in products at attractive rates. That’s where outsourcing commissions management comes into play.
The range of support services includes data processing, payroll and administrative functions, claims management, policy management, and commission management. Specialist agencies handle all these tasks, which in an effort to cut the flab. It helps insurers to make their business more lean and viable. However, the insurance companies are attain benefits when they decide to Outsource Commission Management. This is because of its inherent unique features.
Commissions are based on business generated by the agents and hence unlike regular salaries differ from month to month. Again, all schemes do not yield the same amount of commissions so calculations of the total monthly amount payable can be extremely complex. This lack of uniformity is what makes commissions management so tricky. This is why insurers prefer outsourcing this task.
Pitfalls to Avoid When Outsourcing Commissions Management
Need for Specialized Infrastructure – It has to be understood that not all outsourced agencies handling commissions management can tackle the business of all scales. Many insurance companies outsource without verifying this aspect. This results in the delay in settling commissions payable to agents and compromises with accuracy. To avoid this pitfall the antecedents of the agency, their past track record and the testimonials of previous clients should be thoroughly looked into.
Software and packages in use – When insurance companies outsource insurance commissions management they have to ensure that the outsourced agency is making use of the latest software and relevant packages so that this recurring task is completed every month without delay. One of the pitfalls occurs when this aspect is not given importance. It has to be made sure that insurance process outsourcing service provider is using the comprehensive Commissions Management package. This system takes care of the total commission’s payable process in detail and all the data therein is supplied by the insurance company. Those that do not incorporate this package will not be able to provide top end commission payable results.
Data security – This angle has to be looked into before the decision to outsource insurance commissions management to a particular agency is finalized. Data security is of utmost importance as the personal details of agents of an insurance company as well that of their policyholders is at stake. Not ensuring this can have disastrous consequences in case of breach of security.
These then are the factors that should be looked into if pitfalls are to be avoided for outsourcing commission management.