Author
Bowtie Team
Updated on
2025-07-09
Disclaimer: This article is translated with the assistance of AI.
The structure of traditional insurance companies resembles a pyramid, with layers of roles and goals. Join Bowtie as we dive into this mysterious pyramid with industry veteran Bo, uncovering how it really operates.
Most Agents Are at the Bottom of the Pyramid
At the top of the pyramid sit the company’s senior executives, crafting strategies and steering the direction. Just below them are regional managers overseeing specific areas. Further down, team leaders directly manage groups of insurance agents. And at the very bottom, forming the largest group, are the insurance agents—the frontline staff who interact directly with clients.
This system might seem orderly, but it hides plenty of issues. Picture yourself as a newbie joining an insurance company, starting at the pyramid’s base. Your goal is straightforward: make money. But how? The company offers two paths—sell policies or recruit new agents.
Agents Climb by Recruiting and Selling Policies
So, you hit the ground running, pitching insurance to friends and family. At the same time, you’re on the hunt for recruits to join your team, because each new member means a cut of their sales commissions for you. It’s like playing a massive multi-level marketing game—everyone’s scrambling to climb higher up the pyramid.
However, this system isn’t so great for clients. Imagine you’re a customer considering insurance. An enthusiastic agent pitches a policy that looks fantastic. What you don’t see is that a big chunk of your premium goes to the agent’s commission, their upline’s commission, and so on, all the way to the pyramid’s peak.
Take this example: suppose you buy a life insurance policy with an annual premium of HK$10,000. In the traditional model, up to 50% of the first year’s premium might go to commissions for agents at various levels. That means HK$5,000 of your payment isn’t securing your coverage—it’s fueling a complex commission network.
Worse still, to hit sales targets, some agents might push products that aren’t the best fit for you but offer them the highest commissions. It’s like walking into a fruit shop that only sells apples—whether you need oranges or bananas, the staff will still push apples on you.
This model not only burdens clients with unnecessary costs but can also lead to buying unsuitable insurance products. Plus, since agents must keep recruiting and selling to maintain their position, clients often feel constant sales pressure.
Online Insurance: No Hard Sell, Save on Commissions
In contrast, online self-service insurance platforms offer a refreshing alternative. Here, you can browse various insurance products at your own pace, compare features and prices, and skip the sales pressure. By cutting out the complex commission structure, premiums are often more affordable. Best of all, you can choose the right product for your needs and budget, making the process transparent, efficient, and cost-effective.
In this digital age, it might be time to step out of the traditional insurance pyramid and embrace a more open, transparent online insurance model. After all, when it comes to securing your family’s future, shouldn’t you have more choice and control?
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