Insurance outsourcing today is not simply a matter of cost cutting; it is much more than that. Leveraging sophisticated technological advancements and making it work to increase efficiencies is just one of the factors. Some of the others include spinning off non-core activities, data entry and processing and tedious time taking jobs that consume a lot of man hours but do not give the level of expected financial returns.
One of the very important functions of any insurance company is commission payment to agents. There is uniqueness here. While agents play the most crucial role in getting new businesses which form the very backbone of development and business expansion, the commission paid to them is just like any payroll management with a vital difference. Payroll management is fixed with annual or bi-annual changes in the salary structure of employees. But commissions paid are always performance-based and hence there is no uniformity from agent to agent and month to month. Because of this complexity insurance companies prefer to opt for Insurance Commissions Management Services to take care of this purely administrative task.
Commissions Management is a key component of outsourcing insurance services. What then are the attributes of an insurance outsourcing company that specializes in this line of business and the services they provide?
Infrastructure for Commissions Management – While most insurance outsourcing companies have the infrastructure in place to handle such insurance back-office work such as data processing and form processing, commission calculation and payment work requires specially trained staff to get to the bottom of complex computations. It also requires specifically designed software support that can handle this activity.
Professional Commission Management Services – This is a comprehensive Commissions Management package that looks after the total commission payable process. It starts with receiving data on work done by the agents that require the commission to be paid. This is received from the insurance company. Next is the all important Commission accounting procedure made more intricate by the fact that an agent sells a wide variety of products and no two have the same rate of commission payable. Then there is the calculation of the Producer Commission payable. In insurance jargon, an agent is considered to be the producer of an individual life insurance.
Benefits of Outsourcing Commissions Management – As said before, while the act of selling policies by agents is a core insurance activity, payment of commissions is not and best left to be taken care of by insurance outsourcing companies. Since these companies have the required fixed systems in place it facilitates accurate calculations of commissions and regular and timely payment. Further, through commission management services, companies save on costs that would have been spent to train manpower in commission management. And most importantly the whole aspect of Commissions Management is handled efficiently and effectively.
In the present day insurance scenario, accurate bookkeeping, keeping track of complicated accounting of commission payable and outsourcing the process judiciously to experts in the field is as important as the very act of selling insurance.