Spitzer To Sue Marsh, Other Insurers. New York Attorney General Eliot Spitzer will announce that he is filing both criminal and civil lawsuits against Marsh & McLennan, the largest U.S. insurance brokerage firm. [Forbes, Carrie Coolidge]
How are your people influenced by sales incentives?? The basis of the Marsh & McLenna case:?they tell clients that incentive payments don't influence recommendations of insurance carriers, but in practice tell sales to segment client?toward carriers with more profitable incentives. Fundamentally, what you tell your clients must match what you do internally.
Every industry has some form of channel incentives. They could come in the form of margins, better terms, marketing reimbursements, or cash payments for representing a certain line. Incentives?are not the problem here, it is that this broker represents itself as a non-bias advisors to clients.
It clearly states in marketing literature that broker agents are not aware of incentives, nor are they influence by them. However, internal memos demonstrate agents were specifically instructed to channel clients to more profitable programs, and incentives were a determining factor of carriers represented. Their actions were contrary to their disclosure to clients.
Is this a case where marketing has created materials contrary to what really happens in sales?? Or has the company deliberately mislead its clients?? As a leader, you need to know that this type of inconsistency is unacceptable if you want to cultivate strong business relationships.
Three steps to take to improve communications consistency and avoid this problem:
For as long as products are sold, there will always be reasons to receive incentive payments. Incentives will always influence the products recommended, but whenever possible provide clients a fair assessment and never misrepresent competitors to move sales toward the better compensation plan. Integrity is key to building business relationships.
/ customer-relations | clearly-communicate /
By Justin Hitt at October 14, 2004 12:57 PM Subscribe in a reader