The insurance and wealth management industries are constantly changing, and companies encounter various challenges related to Agent and Advisor compliance, industry regulations, and managing external channel commissions. 

In order to compete, insurance and wealth management companies have to utilize their resources intelligently. Time spent managing manual processes is time lost in sales and marketing endeavors.  Agent and Advisor Producers prefer working with companies with efficient onboarding and compliance processes to reduce administrative work and increase customer facing selling time.

At Canidium, we have been implementing sales performance management tools since 2008. We have helped countless organizations streamline onboarding, compliance, and incentive compensation management.

Through this article, you will understand the challenges associated with managing Agent and Advisor commissions without a solution such as SAP Agent Performance Management (APM) and the benefits of using SAP APM to recruit and retain the best Producers.

What is SAP Agent Performance Management (APM) Software?

SAP Agent Performance Management (APM) software streamlines onboarding, compliance, and incentive compensation management.

SAP APM software has emerged as a powerful, integrated software suite. Companies who fail to use automated compliance and commission solutions like SAP APM risk facing obstacles in attracting and retaining Producers to build external sales and distribution channels.

Challenges of managing agent commissions without SAP APM Software

It can be challenging to manage Producer commissions without the help of SAP APM software. Here are some common difficulties that companies encounter:

Lack of Automation

Insurance and wealth management companies without a software solution must calculate commissions with spreadsheets or an in-house solution. This results in many parts of these processes such as complex commission structures, varying commission rates, and policy-specific factors being managed manually. These processes are often time-consuming, prone to errors and lead to incorrect payments and Producer disputes.

Data Organization

Managing commission-related information is challenging without a centralized system in place. Companies have to manage and retain a great deal of data, such as policy details, premiums, assets, renewals, cancellations, endorsements, and changes in the Producer of record. Manually organizing and cross-checking this data can be a tedious and error-prone process.

Lack of Transparency

It is challenging to provide Producers with transparent and thorough commission statements without a specialized software solution. This lack of clarity may cause confusion and mistrust, as Producers may need help determining how their commissions are calculated and may not be sure they are being paid correctly.

Commission Disputes

When commissions are managed manually, there is a higher chance of disputes arising between Producers and insurance and wealth management companies. This can lead to Producers having to invest considerable time and energy to settle these disputes, which may negatively affect their productivity and creates tension in their relationship with carriers.

Limited Insights and Reporting

Agents and Advisors may face challenges obtaining comprehensive reporting and accessing accurate business information without the right software solution. This can result in difficulty gaining insights into commission performance, identifying trends, tracking policy performance, or analyzing earnings. These limitations can hinder a Producer's ability to make informed decisions and optimize sales strategies.

Inaccurate Commissions

When commission management is done manually, there is a higher risk of errors in calculating Producer commissions. Additionally, applying business logic accurately to hold payments for compliance issues or retroactive changes can be challenging, which may result in over or underpayments.

Scalability Challenges

As external channels grow, it becomes challenging to manage all the data needed to remain in compliance, calculate commissions and retain historical information needed for audits.  Relying on in-house systems and custom operational processes creates risk and limits growth when changes need to be implemented quickly in response to competitors and market forces.  Leading SaaS solutions like SAP APM allow companies to adopt industry best practices, be adaptable and change rapidly when needed.

Benefits of using insurance SAP APM software to build external channels

Make recruiting and onboarding new Agents and Advisors more efficient with SAP APM. This system includes a pre-configured Onboarding module that integrates with NIPR, FINRA, background and credit check systems, Docusign, and online training programs.  This allows for a faster and smoother onboarding process once new Producers have been recruited. Recruiters can send email invitations to individuals or groups, and new Agents and Advisors can complete the rest of the onboarding process themselves through a self-service online portal.

Maintaining External Channels

Agents and Advisors have consistently ranked quality of service and ease of doing business as important as products and compensation when choosing who to work with. Given the resources invested in recruiting and onboarding to expand external sales channels, insurance and wealth management companies need to offer service tools that enable Producers to access all necessary information and  can easily submit service requests, update demographics, perform annual recertification, and training.

Simplified Compliance Management

In the insurance and wealth management industry, adhering to legal and regulatory requirements is essential. Insurance and Financial compliance is crucial, and SAP APM software helps automate and streamline all compliance-related tasks. With this software, Producers can easily access and stay updated on regulatory changes, keeping them compliant with the latest standards. The software provides a centralized platform for documentation, policy tracking, and reporting, reducing the risk of non-compliance and potential penalties.

Efficient Recruiting and Onboarding

SAP APM software streamlines the process of recruiting and onboarding new Producers, agencies, brokerages, FMOs and IMOs. Companies can quickly and smoothly onboard new Producers with pre-configured modules and integrations, such as NIPR, FINRA, background check systems, Docusign, and online training programs. APM also allows new integrations to be configured and deployed quickly.  This saves time and resources while ensuring a seamless transition for recruits.

Unified Producer Experience

Companies that utilize SAP APM software provide Producers with tools and features that enhance the quality of service and convenience. Producers have access to all necessary information, submit service requests, complete annual recertification, and participate in training through a self-service online portal  that can transform the Producer experience by providing a one-stop shop with a unified UI. This empowers Producers to manage their tasks efficiently and access resources conveniently, improving Producer satisfaction and productivity.

Streamlined Compliance Management

Compliance with legal and regulatory requirements is crucial in the insurance industry. SAP APM software automates and streamlines compliance-related tasks, making it easier for Producers to stay updated on regulatory changes and maintain compliance with industry standards. The software provides a centralized platform for documentation, policy tracking, and reporting, reducing the risk of non-compliance and potential penalties.

Accurate and Transparent Commission Management

SAP APM software ensures accurate and transparent commission management. By automating calculations and providing a clear breakdown of commissions, insurance and wealth management companies can eliminate manual errors and disputes related to commission payments. Producers can easily track and understand how their commissions are calculated, fostering trust and transparency in the agent-insurer relationship.

Scalability and Growth

SAP APM software enables carriers to efficiently handle the relationships between Producers and intermediary agencies such as GA’s, FMO’s, IMO’s, and Broker Dealers, ensuring scalability and facilitating business growth. By automating calculations, data entry, customer updates, and Producer of record updates, companies can manage a large volume of transactions without sacrificing accuracy or efficiency. This scalability allows carriers to expand their external channels while maintaining operational effectiveness and industry compliance.

SAP APM as a solution for Insurance and Wealth Management

Insurance and wealth management companies must embrace technological solutions like SAP APM software to stay competitive and overcome the challenges associated with Producer compliance, industry regulations, and managing external channel commissions. By doing so, carriers can attract and retain Producers effectively, foster transparent and trustful relationships, and position themselves for sustainable growth in the industry.

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