Understanding Productivity Based Commission Structure

Understanding Productivity Based Commission Structure

Productivity definition

Productivity = Total new business WRP (including top ups) during a financial year.

Business done across all products is taken into account

Example :

Product

WFP collected

Savings Suraksha

3 lakh

GWP

2.5 lakh

Wealth Builder II

2.5 lakh

Cash advantage

1 lakh

Total Productivity

9 lakh

RP ? 100% of received premium | SP/Top-ups ? 10% of received premium

Productivity categorisation - Traditional

The categorisation for a partner/advisor will be based on productivity and will be subject to change based on factors like inflation.

The current annual categorisation will be as follows:

Category

A B

C

Quarter Productivity

< Rs. 2.25 lakh

Rs. 2.25 lakh to Rs. 4.99 lakh

Rs. 5 lakh & above

Category

A B

C

Annual Productivity

< Rs. 9 lakh

Rs. 9 lakh to Rs. 20 lakh

Rs. 20 lakh & above

ULIP categorisation

The categorisation a partner/advisor will be based on productivity and will be subject to change based on factors like inflation.

The current categorisation will be as follows:

Category A: Less than Rs. 20,00,000 p.a. Category B: Rs. 20,00,000 p.a. to less than Rs. 5,00,00,000 p.a. Category C: Rs. 5,00,00,000 p.a. and above

Illustration 1

Advisor X sells a ICICI Pru Cash Advantage, 10 pay policy with WRP of Rs. 1 lakh p.a.

JAS quarter productivity (for all products) for X is Rs. 3 lakh, i.e. Category B

Year end productivity for X is Rs. 28 lakh (Category C)

Base commission: 20% X Rs. 1 lakh = Rs. 20,000

Bonus commission:

( 25%-20%) X Rs. 1 lakh = Rs. 5,000

Bonus commission:

( 30%-25%) X Rs. 1 lakh = Rs. 5,000

July 1 2013

Sep 30 2013

Mar 31 2014

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