If there’s one thing we’ve seen working with insurers across Malaysia, it’s this: agent performance is no longer just about premiums sold. The industry has matured. Customers expect more than transactional interactions. They expect advice, service and professionalism. 

In 2015, Bank Negara Malaysia (BNM) mandated the implementation of the Balanced Scorecard (BSC) for life insurance and family takaful providers, effective January 1, 2018. The goal was to shift the focus from short-term sales to long-term customer value so that emphasis is on advice quality, policy servicing and professional intermediary conduct. 

Overall, the industry performance reflects the positives of this shift. According to the General Insurance Association of Malaysia (PIAM), Malaysia’s general insurance sector recorded a resilient performance in 2024, with gross written premium growing 6.9% year-on-year to MYR23.1bn ($5.4bn), despite global economic headwinds. Maintaining this trajectory requires not just stronger sales, but robust ecosystems as well that embed customer-centric performance standards like the BSC.

That’s where Incentive Compensation Management (ICM) platforms make a difference by linking Balanced Scorecard KPIs with incentive structures so aspects like compliance, customer service and quality of advice matter just as much as sales. 

Also Read: Digital Insurers in Malaysia: What New Licenses Mean for Takaful & Lending Platforms

Balanced Scorecard: A Detailed Overview

The concept of agent performance BSC is powerful because it shifts the lens from volume to value. Within this framework, performance is tracked across four dimensions including financial, customer, internal processes and learning & growth. 

In simple words, the BSC provides a structured framework for how insurance companies compensate their agents, aligning rewards with outcomes that deliver value to consumers. The framework sets clear performance indicators, such as sales targets (30%), customer fact-finding (15%), persistency ratio (30%), substantiated complaints (10%), and completion of 30 hours of continuous professional development (15%). 

Before its implementation, there were no standardized benchmarks and many of these criteria were left to the discretion of individual intermediaries. 

Why Malaysian Insurers Are Embracing BSC

In many of my interactions with senior teams of leading insurers in the region, I have often been told that agents respond more positively when the system reflects what matters: a balance of revenue generation, professional conduct and customer experience.

For insurers in Malaysia, BSC is now a strategic imperative. We’ve seen three major impacts in the insurers that adopt BSC thoughtfully:

Mitigating Mis-selling Risks: When compliance and quality of advice are measurable KPIs, agents internalize that these aspects directly affect their earnings. This alignment reduces regulatory friction and protects the brand.

Encouraging Long-Term Relationships: Incentivizing persistency shifts the focus from acquiring policies to nurturing clients. This emphasis increases trust & policy renewals while likely creating more predictable revenue streams.

Aligning Incentives with Organizational Goals: When commission structures reflect both sales and qualitative performance metrics, agents understand that ethical & professional behavior drives both personal and organizational success.

Ultimately, insurers that embrace the BSC see agents become more holistic in their approach. They are not just selling products. They are building trust, enhancing customer engagement and contributing to long-term business outcomes.

The Real Challenge: Turning BSC Framework into Action

While the BSC framework is compelling, its real test lies in execution. One of the biggest hurdles we have observed is how insurers operationalize it.

Manual scorecards and spreadsheets are still common in some organizations across Malaysia. This creates disputes over payouts, delays in reporting and a lack of transparency that could hamper trust. Agents, understandably, become skeptical when errors affect their commissions, even if the underlying intent of the BSC is sound.

Another challenge is data integration. KPIs span multiple systems—Customer Relationship Management (CRM) platforms, Learning Management Systems (LMS), Human Resource Management Systems (HRMS)—and consolidating these inputs into a unified performance score can be technically and operationally complex.

Finally, behavioral change is critical. Agents trained and incentivized under a purely sales-driven system often struggle to adapt. If non-sales metrics are not transparently linked to rewards, agents may perceive the BSC as punitive or opaque which could undermine the very purpose of the framework.

But the difference between those who succeed and those who struggle often comes down to how technology is applied. ICM platforms help insurers move beyond manual processes and turn the BSC into something practical, consistent and trusted.

Here’s how:

– Flexible Compensation Rule Engine

Modern ICM platforms come with a flexible compensation rule engine that is central to translating the Balanced Scorecard into actionable performance management. In insurance, agents operate across multiple products, customer segments, and channels, and the BSC KPIs may not be applied uniformly in a manual setup. 

A robust rule engine allows insurers to create role- and channel- and geography-specific scorecards so that each agent’s performance is evaluated fairly against the metrics that matter for their specific role. By aligning compensation to these differentiated KPIs, insurers can reinforce behaviors that support long-term value creation and not just short-term sales.

– Seamless Integration Across Systems

Balanced Scorecard KPIs often rely on data from multiple systems: policy administration, learning platforms, HRMS, CRM, and more. Without integration, consolidating this data is slow and error-prone. 

API-first ICM platforms with solid integration capabilities ensure that all relevant data feeds into the scorecard automatically and accurately. This reliable data flow allows insurers to track holistic performance, measure behaviors consistently and tie rewards to outcomes across multiple dimensions of the BSC.

– Lifecycle Management at Scale

The Balanced Scorecard requires consistent tracking of agent performance throughout their tenure. Lifecycle management capabilities in ICM platforms enable insurers to manage the full agent lifecycle—from onboarding to performance assessment to payout and eventual separation —centrally. This means that BSC metrics are applied consistently across geographies, hierarchies, and channels, eliminating errors and discrepancies that can affect trust. 

– Diverse Incentives and Rewards

One of the most impactful ways ICM platforms reinforce the BSC is through diverse rewards. Traditional systems often reduce incentives to cash payouts, which may fail to sustain motivation across different roles or levels. 

Modern ICM platforms allow insurers to tie a variety of reward types—cash, reward points, or non-monetary perks—to performance on all BSC dimensions. Due to this, agents are recognized not just for sales, but also for compliance, customer service and learning, in turn, aligning incentives with the full spectrum of desired behaviors.

– No-Code Configurability

The Balanced Scorecard is dynamic, given that market conditions, regulations, and product portfolios evolve over time. No-code configurability in ICM platforms like Incentihub allows business teams to update rules, KPIs, and reward structures quickly without relying overtly on IT. This agility ensures that the BSC remains current, relevant, and aligned with strategic priorities, rather than becoming a static framework that lags behind operational reality.

Parting Thoughts 

The Balanced Scorecard has the potential to redefine agent performance in Malaysia’s insurance sector, moving the focus from short-term sales to long-term value creation. But its impact depends on execution with the right ICM platforms. 

For insurers looking to fully realize the benefits of the Balanced Scorecard, platforms like IncentiHub provide the capabilities needed to make incentive management consistent, transparent and aligned with both regulatory expectations and strategic priorities.