New Zealand's largest general insurance company, IAG, will stop sales target incentives for its staff, as a result of an on-going process of review and change over recent years. The move took effect yesterday.
IAG is the first major organisation in the finance sector to have made this change around sales incentives.
In a statement, the insurer said, “IAG New Zealand has had a long-standing commitment to a balanced scorecard with regard to rewarding staff which has seen an incremental reduction over the past few years in the value of sales incentives in our performance framework.
“We have now decided to completely remove sales target incentives from our people’s objectives effective 1 July 2018 so we can support customer requirements from a service and needs basis.”
The statement added, “To demonstrate we are truly purpose-led and to create world-leading customer experiences, we are continually assessing our current business practices and future approach.
“We know that customer and community sentiment is evolving, people expect to receive a great experience. Removing sales targets will further enable IAG to build a culture that has our people and customers at the core of everything we do.
“Over the last three years we have continually reduced individual objectives around sales. In the current financial year, we introduced an objective to place less emphasis on the outcome and more emphasis on the customer experience. The latest move means will we have zero incentivised sales targets.”
IAG will however continue paying commissions to the brokers and advisers who sell its products but whom it doesn't employ.