So what does motivate insurance agents? Recognition goes a long way. So what does motivate insurance agents? Recognition goes a long way. (Shutterstock)

A Cadillac for first place, steak knives for second… The loser gets fired.

This classic Glengarry Glen Ross reference may be the first thing that comes to mind for many when they think about incentive programs, but things have changed.

In an industry like property & casualty insurance, the responsibilities of an effective agent have evolved drastically. Insurance sales agents no longer live by maxims like ABC: Always be closing. Today more apt acronyms would be ABA, ABE or ABDWBFYC: Always be advising, Always be educating or Always be doing what’s best for your clients, respectively.

But those don’t sound as catchy.

If an effective incentive program is one that aligns individual goals with institutional goals — agents and brokerages, in this case — then, naturally, the structure of an incentive program must be designed to drive these new outcomes.

It’s time to revisit the way we think about incentive programs. While incentives can be used to motivate sales, they are equally effective at motivating other types of behavior as well. With that in mind, it’s important that brokerages take a more thoughtful approach to identifying KPIs (Key Performance Indicators) that better align with overarching company goals and extend beyond mere sales metrics, and to structure their incentive programs accordingly.

Leading vs. lagging indicators

At the end of the day brokerages are still focused on improving sales, which is why it’s important to distinguish between leading indicators and lagging indicators before deciding where the strategic use of incentives can make the biggest impact. Lagging indicators are the end result. Leading indicators are the predictive factors that ultimately lead to that result.

For a property & casualty insurance brokerage, important lagging indicators include sales data, repeat business and the optimization of insurance verticals. If those are all effects, then what are the causes that influence those outputs?

The most crucial leading indicators come down to the competency and drive of the agents you are working with. For instance, better product knowledge will improve initial sales, as well as your ability to fill certain insurance verticals. Better product knowledge will enable your agents to see opportunities for add-on policies and to persuasively communicate the benefits of those policies to the end consumer.

Additionally, better territory coverage will drive more sales. More leads equal more opportunities to sell policies. Better leads improve efficiency and save time. Circling back to Glengarry Glen Ross, there’s a reason the salespeople were literally paying for the best leads. Furthermore, if you can incentivize your agents to consistently follow up with current clients and to form relationships that build trust, those same clients might have additional insurance needs that they will turn to you for in the future.

Finally, motivation plays an important role in the entire process. Given that insurance agents earn commissions, do you think that they are more concerned with chasing lagging indicators or investing time in leading indicators? Like most humans, they are prone to focusing on instant gratification, especially when money is on the line. It’s up to you to look at the long-term picture and to figure out how to direct their focus on the factors that will ultimately lead to more sustainable, long-term growth.

Strategically structuring incentive programs

These leading indicators give us an idea of additional KPIs that can be incentivized to drive growth for your brokerage. For instance, if better product knowledge results in more sales, then you can provide incentives for agents based on their performances on educational-based modules where you quiz them on the ins-and-outs of certain policies.

Or, you could take a more cumulative approach and design quizzes around assigned reading material that will result in their personal growth. In fact, if you can inspire agents to invest in themselves, not only will their skill sets improve, but it will build important relational equity by making it feel like you are taking an active interest in their success.

If better area coverage results in more sales, you can structure incentives around lead generation or follow up with existing clients. You may also consider targeting your agents’ abilities to sell add-on policies in contexts where the client would be more inclined to purchase additional policies if they knew they were available. For example, a business that is shopping for property insurance might be interested in liability insurance as well. However, it is important to clearly define these contexts so that clients feel that agents are looking out for their best interests instead of trying to push additional policies in areas that don’t make sense for them.

Finally, let’s talk about matters of motivation, the most elusive of all leading indicators. You may wonder, “Isn’t commission motivation enough?” Well, not really. Commission vanishes into mortgages and car payments and can become associated with baseline pay, causing it to lose its motivational value. Plus, commission is often structured based on sales rather than an agent’s ability to act as a trusted advisor. Commission focuses more on a short-term approach than long-term growth.

So what does motivate insurance agents? Well, recognition goes a long way. Feeling valued. Feeling like a part of a company culture that goes beyond themselves. All of these are outcomes that an incentive program can be structured to promote. In fact, many companies we work with strictly offer reward points based on their agents’ displays of upholding company value, knowing that adhering to those principles will result in long-term growth and tangible return on their investments. It’s most important that you consider the individual factors that will motivate your agents to meet your specific goals as you design or revamp an effective incentive program.


Mark Herbert ( is president and CEO of Incentive Solutions, based in Atlanta, Ga. He has more than 30 years of experience overseeing business operations within the incentives industry. These opinions are the author’s own.

See also: A five-step staffing plan for insurance agency growth