NZ's biggest insurer IAG ditches staff sales targets

IAG whose brands include State Insurance, is to stop using sale targets to incentivise staff. Photo/Stuart Munro.

Insurance Australia Group - New Zealand's largest general insurer - is to stop incentivising its staff using sales targets.

The insurer - whose brands include State Insurance, AMI, NZI and Lumley - will stop rewarding its staff based on how many policies they sell from July 1 amid pressure from the union.

First Union finance spokesman Stephen Parry, who had previously criticised the insurer for its sales targets, welcomed the move and called for the banks to follow suit.

"This is a really positive move from IAG, who are now the first major finance sector employer to take this step.

"The union applauds IAG's decision, and encourages other finance sector employer ― particularly the banks ― to follow suit.

"Until recently IAG's practices around sales targets and sale pressure have been largely the same as the major banks, so this is a very significant development."

Parry said sale targets created a toxic culture of sales over service where staff felt pressure to sell or face losing their job.

Banks have been under pressure to change their sales targets in the wake of a report released in Australia last year called the Sedgwick report, which made 21 recommendations urging banks to change their focus from sales to service by 2020.

Sales practices have also been under the spotlight as part of Australia's royal commission into misconduct in the financial services industry.

An IAG spokeswoman said the decision was not related to the royal commission.

IAG chief executive Craig Olsen said its decision was the culmination of an on-going process of review and change over recent years.

"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."

Craig Olsen, chief executive of IAG New Zealand. Photo/Supplied.

Olsen said removing sales targets would enable IAG to build a culture that had its people and customers at the core of everything it did.

"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."