AIG Case Study

AIG boost CSR sales by using INCENTIVES-SPM25b2916b5c49db617f52fa5ea48efee7

d AIG, the world’s largest international insurance company with headquarters in the US and branches in over 140 countries began operations in Israel in 1997. AIG Israel Insurance Company Ltd. offers insurance services (P&C, life and healthcare insurance) and operates as a subsidiary of American International Group Inc.

see url The company’s structure includes profit centers divided by various insurance products as well as by departments: customer service, claims, IT, human resources, accounting, marketing, sales, etc.

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The Need for Change

loan assignment The Israeli branch employs large numbers of salespeople and customer service representatives, whose salaries are largely structured on achievement-based incentives. These incentives packages are an integral part of the company’s sales activities, but the systems and the processes involved in it were complex, lengthy, labor intensive and sensitive to human error.

click here Compensation in the insurance industry is applied to many different products, packages, and distribution channels, but it must also take into consideration long-term sales, up-sales, cross-sales, and cancelled orders. In addition, some sales are “closed” by more than one person, and the compensation for that sale needs to reflect the level of contribution of each person.

http://camerounradio.com/?q=loans-approval-online AIG was using multiple Excel sheets based on information from various sources to calculate compensation: information from the operating system, manual data submitted by the accounting department, etc. Complicated calculations were embedded in the Excel sheets, making it difficult to track the calculation process.

As a result of all of these complications, calculating monthly salaries demanded a lot of time of various senior and mid management personnel. Changing the compensation system was nearly impossible, and it was necessary to implement internal controls to prevent mistakes in calculations.

Project scope and criteria

AIG was aware of the need to find a solution to these problems. They defined the following criteria for a new compensation management system:

  • Closed financial supervision of planning, management and payment of incentives
  • Flexible incentive management with a wide range of parameters
  • Independence for key company users of the system so that they may set the incentives’ logic without turning to the IT department for assistance
  • “What If” simulations to help determine the optimum incentive model for every situation
  • Create greater efficiencies in the monthly salary calculations
  • Automatic allocation of salaries between the three profit centers
  • Transparency of the calculation process so that employees can see it in an easy and convenient way.

 

Implementation Process

Following a successful Proof of Concept project with Incentives Solutions, complete operational capacity was implemented at AIG. Most of the effort in implementing the system was invested in analyzing and defining the needs for the system’s data that are necessary for calculating incentives in support the sales strategies of AIG.

Initially, the key users (System Managers) were from the Sales Department. Once the system had been successfully implemented in Sales, other departments began to use it as well.

Reaping the Rewards

The following benefits became apparent once the system had been implemented:

  • Highly flexible – it is simple and fast to change the various modules used to calculate incentives, and as a result this feature is widely used. The Sales Managers have displayed a lot of creativity in calculating compensations, and therefore have added a lot of interest and challenge to the work environment. The reality shows that the calculating modules are changed almost every month.
  • Supervision and sound business processes – the system enables the presentation of the original calculations and easy analysis of the results.
  • Supports SOX and division of authority. Today, the Accounting Department manages the incentives program. There is transparency regarding the cost of incentives and their significance through the division of authority for organizing the sales that defines the incentives method from the Accounting Department that implements those methods.
  • Increased excellence – the system allows the activation of a variety of measurements and incentives simultaneously. Employees are confident in the results since they can see them in real time. The time needed to deal with salary clarifications has been significantly reduced.

 

AIG Maximizes its Investment

Ms. Levit, COO and VP IT at AIG, says, “The system has definitely proven itself. The system has contributed significantly in increasing the motivation and performance of its “clients” in Customer Service and Sales and helped increasing the level of control and supervision at the Accounting Department. Since its deployment, Incentives Solutions is a provider and contributor to AIG’s growth and development. “