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Returning to the workplace: Actions for insurance salesforces

System og strategi for kompensasjon |Executive Compensation|Talent
COVID 19 Coronavirus

By Darren Tse , Ron Burke and Eric Macksoud | June 15, 2020

Though COVID-19’s impact on insurers isn’t as visible as in other sectors, their salesforces can be particularly vulnerable to demand shocks.

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About our COVID-19 coverage

In our ongoing coverage of the COVID-19 outbreak, experts from across Willis Towers Watson share insight into what you need to know to manage your business and employees and reduce your risk.

Willis Towers Watson has surveyed the impact of the COVID-19 pandemic since February 2020. One issue companies across industries have been grappling with is how to motivate and engage the salesforce in the face of extreme uncertainty and volatility in demand. Though the impact on insurers has not been as visible as say empty travel hubs and retail stores, insurance salesforces can be particularly vulnerable to demand shocks given the historically strong appetite to put the majority of pay at risk.

Consider the typical insurance advisors or wholesalers, who are likely heavily or fully commissioned, with a modest or no base salary. Their total compensation is potentially quite volatile, especially for sellers with less mature books of business. The most progressive insurers have been thinking about ways to preserve salesforce engagement and motivation, and the data show that insurers as a group are focused on tuning and nurturing their sales engines.

Field sales reduction actions across general industry and insurance industry organizations.
Response – field sales reductions General industry Insurance industry
Action taken 3% 2%
Planning action 3% 2%
Considering action 19% 3%
Neither planning nor considering action 45% 60%

Initial insurance-industry response

The COVID-19 effect on sales compensation plans has been pronounced among insurers, with more than 80% reporting a negative business impact. Interestingly, at the start of the second quarter, over 50% had not intended to change their sales incentive plan designs. In contrast to “waiting out” the impact on sales incentives, approximately 80% of insurers have refocused their salesforces on activities that do not require face-to-face interaction.

The industry also appears steadfast in keeping salesforces active. Very few (7%) are using furloughs as a possible course of action. This contrasts to a higher prevalence of furloughs in general industry, where 7% have already furloughed part or all of the field salesforce, and nearly a quarter more (24%) are planning or considering this action.

The data regarding field salesforce reductions follow a similar pattern to that of furloughs, though a small number of insurers have resorted to implementing some degree of reduction.

The return-to-work opportunity

Our latest Returning to the Workplace survey was fielded in mid-May 2020. Insurers give sales programs and policies middling marks for effectiveness addressing COVID-19-related challenges. A minority of insurers reported having sales management, sales compensation plans and sales compensation governance practices that have been effective in addressing COVID-19-related challenges. Clearly, more agility is needed in the ecosystem.

The time to act is now. Two in three insurers report that their sales teams are connecting “normally” with customers. Additionally, 63% of insurers agree or strongly agree that sales teams have the right technical knowledge, goals and incentive compensation plans to reflect market opportunity and support priority behaviors. However, the salesforce needs more help reorienting to new selling priorities. Only 17% of insurers think sales management, territory management, learning and development, and performance management are all effective in helping salesforces reorient to the new selling priorities.

Across general industry organizations, only one in four has made changes to drive sales force engagement and motivation for the rest of the year, with the most common change being quota adjustment. In contrast, nearly one in two insurers have already made changes thus far. There is a clear opportunity to continue leading the charge, as almost all insurers agree or strongly agree that driving salesforce engagement and motivation is a key priority. Cost management appears to be more of a secondary consideration.

As organizations seek to restore stability, here are some salesforce actions to consider:

  • Update sales strategy; identify implications for the engagement process/playbook to accommodate new work circumstances and required customer interaction.
  • Adjust the coverage model to reflect continued disruption.
  • As forecasts improve/stabilize, revisit goal allocation.
  • Evaluate whether a “bridge” plan should be used to reflect continued uncertainty (i.e., not working around current plan, not a full redesign).
  • Ensure sales managers utilize a full range of performance management practices to support performance priorities.

There is no time like the present to act.

Authors

North America Practice Leader, Sales Effectiveness and Rewards

Global Practice Leader, Sales Effectiveness and Rewards

Associate, Talent & Rewards (New York)

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