Although insurers are beginning to use enterprise incentive management systems, they have yet to take advantage of the technology's broader potential, according to Chad Hersh, senior analyst at Boston-based Celent Communications. Most insurers are using EIM tactically-to manage producer compensation more efficiently, he says. "But insurers won't see the true value of EIM until they use it strategically," he says. "Otherwise, it just fixes a broken system."Strategic uses of EIM include managing individual producer profitability as well as distribution channel profitability, according to Hersh.

"These systems enable insurers to drill down right to the producer level to manage a channel more effectively," he says. "You can reward your best producers, and you can adjust your relationship with the ones that aren't as profitable," he says.

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