Getting Started with SAP Agent Performance Management

Objective

After completing this lesson, you will be able to summarize the features and benefits of SAP Agent Performance Management.

Introduction to SAP Agent Performance Management

SAP Agent Performance Management (APM) is a cloud-based system that provides a complete solution to the complex sales channels common in the insurance industry.

Compensating the entities involved in selling and managing insurance policies involves the incorporation of many different types of data. Let’s start by looking at some of the challenges faced by a typical insurance carrier. As we go through this course, you’ll learn how Agent Performance Management helps its users face these challenges.

Insurance companies have complex sales channels that can number over 100,000 producers.
Producers can be internal or external.
Assignments to customers can be direct or indirect.
Producer hierarchies can be quite complex, with up to nine levels involving hundreds of producers.
The same producer may be a member of multiple hierarchies.

Not only do insurance carriers often have sales channels that number over 100,000 producers, but their sales channels can also be complex. Some producers may be direct employees, while others are independent agents or agencies. Relationships can be made up of multiple, complex hierarchies between the carrier, brokers, wholesalers, agencies, and agents.

APM eliminates the need to maintain multiple and independent sources of information needed to manage and compensate its producers. Some key points include customer and policy data, credentials such as licenses, appointments and continuing education, and relationships between payees.

Features of SAP Agent Performance Management

To understand the importance of the features of SAP Agent Performance Management, it helps to have an idea of how insurance agencies and agents work together and with their carriers.

There are three general types of relationships among agents and agencies: sole proprietors, which are identified by an individual tax ID such as a Social Security Number; independent agents writing under a business entity, which are identified with a corporate tax ID but are still considered individuals; and agents who write under a larger agency.

When an agent sells a policy to a customer, they are compensated for that sale in the form of a commission. The amount of this commission varies based on several factors, such as the contract with the carrier, the type of policy, or the type of customer. The commission may also be split, or shared, with other payees; for example, if more than one agent was involved in the sale, or if an agency or other payee has a relationship with the agent who made the sale.

As you can imagine, this is only a basic overview of the complexities of SAP Agent Performance Management. Some of the features of the solution that help manage these complexities include:

Producer Management
Payee Relationships
Compliance
Integration
Customers and Ownership
Commission Schedules
Performance Metrics
Correspondence

Key Concepts of SAP Agent Performance Management

SAP Agent Performance Management is an enterprise-level system with many features and capabilities. As we go through this course, we will be covering many of these features. Here are a few of the key concepts and functionalities; having a familiarity with each of these concepts and functionalities will help you with a successful implementation.

Payout

The Payout refers to two things: the task that is run after posting of all transaction files for a specific period is completed, and the record that is produced by the Payout task. The payout process consists of a series of subtasks that must be completed successfully for the payout to be finalized. The payout record contains everything needed by either the Accounts Payable or Payroll team to process the payment to the producer; for example, the producer name and address, bank routing information, and of course the amount of the payment.

License and Compliance

The License and Compliance (L&C) portal contains information on how a broker's License, Appointment, Contract, Insurance, and Background Check should impact the broker's commission payment. These rules are established at the Certificate of Authority (from here on referred to as Certificate), Line of Business (LOB), and Product level.

Why is this important? Let’s go back to the example of Deborah Willis that we saw in the video. If Deborah was licensed to sell auto insurance through SafeCare but not homeowners insurance, she would not be compensated for the homeowners policy she sold to Susan and Frank. Instead, the commission would go to another producer in her upline; most likely another licensed agent.

Versioning

Versioning refers to the concept of defining start and end dates for policies, relationships or other entities that are date oriented. To ensure accurate commissions, managing change to producer and other data over time is crucial. For example, if a producer achieves a new license or takes a required education course, the Effective Date of the activity can have a significant effect on their commission. To manage this, many types of records have an Effective Date and an Expiration Date field. Adding an expiration data to a record allows you to add a new version that includes updated information without creating a new record.

Groovy Expressions

SAP Agent Performance Management uses Groovy for all in-application scripting. Groovy is an object-oriented scripting language based on the Java platform. If you already know Java, you’ll find that Groovy is similar.

In this course, we will provide any Groovy expressions you will need, so you won’t need to know how to create expressions; however, if you would like to learn more, the Expressions Reference Guide contains a guide to getting started.

Statements and Reports

SAP Agent Performance Management provides several reporting features to configure and use for analysis, auditing, and much more. Statements are static reports designed to return payout data for a single payee, while reports are optimal for returning historical sales, process, and other high-level data that is useful for non-payee users such as financial analysts.

Summary

SAP Agent Performance Management (APM) is a cloud-based system for managing insurance sales channels.
Insurance carriers have complex sales channels with many producers, using internal and external producers.
APM eliminates the need to maintain multiple sources of information for managing and compensating producers.
APM features include producer management, payee relationships, compliance, integration, customers and ownership, commission schedules, performance metrics, and correspondence.
Key concepts of APM include payout, license and compliance, versioning, Groovy expressions, and statements and reports.

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