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The story
Prudential Life Insurance has released a committee report investigating a money-extortion scandal involving its sales staff. The report concludes that an extreme performance-based pay system created fertile ground for misconduct, and that company-wide governance failures were left unaddressed for years. President Hiromitsu Tokumaru pledged sweeping reform at a press conference, saying the company will overhaul its “Life Planner” system and full-commission pay structure starting next year, including introducing a guaranteed minimum pay system. On 5ch, opinions split over whether the real problem is the performance-based system itself or how it was run in ways that harmed customers, with many also questioning why none of the dismissed employees have faced criminal charges, and drawing comparisons to the Big Motor scandal.
Prudential Life Insurance released a report on the 8th from a committee investigating a money-extortion scandal involving its sales employees. The report revealed that an extreme performance-based pay system bred misconduct that ultimately led to the extortion scandal. It also found serious company-wide governance failures, concluding that the company had chances to fix the problem but left it unaddressed for years. While the company is rushing to roll out new preventive measures and rebuild its structure, regaining the trust it has lost from customers won’t be easy, and the road to recovery is a long one.
At a press conference held the same day, President Hiromitsu Tokumaru declared emphatically, “I promise we will carry out fundamental reform, including of our corporate culture.” The preventive measures set to launch next year center on overhauling the “Life Planner (LP)” system and the full-commission pay structure tied to sales performance, with diversifying customer touchpoints and introducing a guaranteed minimum pay system as the key pieces.
Aiming for an annual income of 50 million yen within five years (continued in the paid edition)
Source: sankei.com / Original article here
What people said
Beat me to it…
Yeah, pretty much the same kind of thing
That's because Big Motor's hard to prosecute
As a method for recruiting people who lack ethics and critical thinking, that's genuinely effective
I bet once you're hired they tell you to go make your sales pitch to all 100 of them
Sounds like a lot of MLM and religious-cult types in there
They're hiring people with the makings of con artists, right? No wonder normal people don't get hired
That's not true at all. You ignorant fool!
Excellent — in a sea of self-proclaimed elites who just shout based on surface impressions and emotion, you're actually separating the issues correctly. Exactly right.
This is flat-out fraud, isn't it? Why aren't the police moving on this? They're a gang of criminals who saw customers as nothing but marks from day one
It's basically like a front company and organized crime operating side by side at the same time
Yeah, that's right. Same as Japanese life insurers in general — sell enough and you clear 50 million yen a year, and I'd bet the top seller nationwide pulls in over 100 million.
If you did it solo you could probably rake in something like a billion yen
Nobody said that
Does a life insurance company even sell real estate? And also, why are they angry about losing money just because they believed what they were told and bought it — isn't real estate investment supposed to be at your own risk?
The damage came from stuff outside their actual insurance business — like getting people to buy crypto
You'd think you'd at least check the lease agreement before buying a property.
Sounds like the sales reps themselves were pretty strapped for cash — partly vanity spending, partly the cost of their own sales activities.
When it comes to liberal-arts hiring, a built-like-a-tank rugby player from a bottom-tier school seems way more capable than the top student from Tokyo University's law school. In sales you don't need to come back until you've got the numbers, and employees just need to be fired up and shouting (like a sports team chant).
For religion and sales, having a network of underclassmen from your old sports club gives you an edge
In insurance sales it's a structural flaw where pushing disadvantageous contracts onto people is exactly what boosts your numbers
The problem is that governance broke down, corporate ethics collapsed, and the place got riddled with organized-crime ties
So basically a salesman's job is to con the customer all the way through without ever letting them realize they've been conned
Background and Key Issues in This Story
In life insurance sales, a full-commission system where income rises with each contract signed is standard, and it’s not unusual for top performers to earn tens of millions of yen a year. What this report flagged as a problem is the governance failure of leaving that system unchecked for years — never addressing the structural flaw that made it easy to push disadvantageous contracts onto customers — and this needs to be read separately from the question of whether performance-based pay itself is right or wrong. On the thread, reactions split between posts that drew this distinction properly and posts that emotionally condemned the entire system. Also, a disciplinary dismissal within a company and a criminal indictment are two different things, so the view that over 100 people being disciplined should automatically mean arrests is, in some respects, premature. The preventive measures mentioned — overhauling the Life Planner system and pay structure, and introducing a guaranteed minimum pay level — appear aimed at reducing forced, unreasonable contracts by guaranteeing a baseline income even when results fall short.
*This article is compiled and summarized from the 5ch (News Express+) thread “[Prudential] Governance Breakdown from Extreme Performance-Based Pay, “Hiring People Who Sell Hard” While Disregarding Regulations — Investigation Report.”
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