Insurance Industry Compensation

Overview:

• Competitive market studies
• Salary administration
• Executive compensation
• Performance management
• Incentive compensation
• Sales compensation

• Property/Casualty
• Life Health

Case Studies:

Case Study #1: Executive Compensation Analysis

• Board of Directors wanted to review total compensation package for Senior Management
• Wanted to align total compensation package with competitive market
• Desired a review of the viability of implementing either a Long Term Incentive Plan or SERP, or both

• Interviewed members of the Board of Directors in order to understand culture, and confirm their position on compensation
• Interviewed executives to fully understand their duties and responsibilities
• Conducted a market analysis to determine the competitive market utilizing published survey and peer proxy data
• Developed appropriate salary grades and ranges for Senior Management
• Provided recommendations to the Board of Directors regarding base salary, annual incentive, long-term incentives, and SERPs

Case Study #2: Sales Compensation Program

• Current group sales incentive had so many variables that there was a questionable relationship between goal achievement and appropriate payout
• Desired to streamline sales compensation process
• Needed to focus sales incentives on definitive results
• Compensation levels not aligned with competitive market

• Adopted a Sales Compensation Philosophy that integrated sales compensation with the business objectives and marketing direction of the company
• Evaluated competitive market to determine base salary and commission levels
• Designed sales incentives based on desired mix of fixed and variable compensation
• Determined appropriate commission levels based on size and complexity of sales responsibilities
• Developed sales compensation guidelines and procedures to ensure consistency

Case Study #3: Salary Administration Program / Competitive Benefit Study

• Property/Casualty company experienced business turnaround in the past several years under the leadership of a new CEO
• Desired market pricing of all management / technical / professional and support staff
• Company had recently written job descriptions
• Salary structures were in place, but were dated
• Policies and procedures to handle compensation issues were not current or clearly defined
• Benefit plans had not been compared to market practices in many years

• Adopted a Compensation Philosophy for determining compensation levels
• Conducted a competitive market analysis to determine appropriate compensation levels
• Developed a market driven salary structure for all employees
• Developed formal salary administration guidelines and procedures to ensure consistency
• Provided a detailed Benefit Practices Study with recommendations for improvement where necessary
• Communicated with employees regarding the new program

Case Study #4: Performance Management Program

• Performance management process was very cumbersome and subjective
• Reviews were not performed on a consistent, systematic basis
• Management did not know how to set goals and objectives
• Infrequent communications regarding employee performance
• Not enough management training

• Developed new performance management program that was aligned with best practices
• Developed simplified forms specific for management and staff
• Conducted performance evaluations twice a year
• Developed supervisory handbook to act as guideline for program
• Conducted management training on proper use of forms
• Conducted training on goal setting
• Communicated with employees regarding the new program