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Sales force automation and enterprise incentive compensation systems not only help make insurers' sales efforts more productive, they also improve customer service, customer retention and compliance.

Q. What does the industry shift toward an independent agent distribution model demand in terms of automated tools that support EIC and SFA?

A. Pass, Bridge Strategy Group: These tools will have to be sold to, rather than forced on, the agent. The focus must be on the agent's needs, not those of the underwriter - with the assumption that the benefit to an underwriter will still be significant if its SFA becomes the agency standard. With underwriters increasingly dealing with larger agencies rather than sole proprietorships, requirements will include the ability to interface with the agency's chosen agency management system (perhaps via ACORD XML standards), support for greater variety in contracts and compensation plans, and technology-enabled assurances that proprietary agency information will not be accessible to the underwriter.

A. Johnston, Callidus Software: Independent agent distribution has two major impacts for insurers using EIC and SFA tools: the need to support divergent business processes and the reaffirmation of the importance of industry standards such as ACORD. Insurers used to dealing with captive agents could dictate the rules for end-to-end business processing, data definitions and the technology stack used. Now, insurers must design partner-centric business processes that assume clear hands-off points between partners, common data definitions and ubiquitous transportation mechanisms. EIC and SFA implementations must be prepared to integrate multiple data streams from diverse technology vendors, be robust enough to deal with multiple business processes, ensure data integrity when passing information to and from partners' systems, and provide strong security models to support competing partners' simultaneous use of the system.

Q. How can EIC and SFA systems help carriers' regulatory compliance efforts?

A. Saccocia, TowerGroup: These tools and applications allow insurance companies to get closer to the data transparency that's necessary for them to demonstrate that they're in compliance. They need to fully understand who they're paying and how much they're paying at any given point in time. The tools establish some data transparency that's necessary to meet compliance and regulatory guidelines and then they can expose that information to the appropriate third parties, whether they're the distributors or folks coming in for a compliance review.

A. Lazarz, CUNA Mutual: Regulators, such as state insurance departments, are asking very tough questions that require significant historical compensation data to answer. A robust EIC solution makes it easy to gather such information quickly and easily. I can only see more demand in the future for such data, both from the regulators and from internal executives with sales practice oversight.


The Experts: sfa/eic

James Lazarz
Vice President, Compensation
CUNA Mutual (Madison, Wis.)

Cindy Saccocia
Senior Analyst, Insurance Practice
TowerGroup (Needham, Mass.)

Russell J. Pass
Bridge Strategy Group (Chicago)

Chuck Johnston
Insurance Industry Expert
Callidus Software (San Jose, Calif.)

Peggy Bresnick Kendler has been a writer for 30 years. She has worked as an editor, publicist and school district technology coordinator. During the past decade, Bresnick Kendler has worked for UBM TechWeb on special financialservices technology-centered ... View Full Bio

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