How to Create a Sales Territory Planning for Insurance
A structured process for defining, assigning, and optimising sales territories to ensure balanced coverage, maximise revenue potential, and minimise overlap or gaps.
Purpose
To allocate sales resources effectively across the addressable market, ensuring every territory has adequate coverage and every representative has fair opportunity to achieve their targets.
Scope
Covers the design, assignment, and periodic review of sales territories based on geography, industry, account size, or policy line. Applies during annual planning cycles and mid-year adjustments.
Prerequisites
- Market data including total addressable market, account density, and revenue potential by segment
- Current sales headcount and capacity information
- Historical sales data by region, segment, and representative
- CRM configured to support territory assignment and reporting
Aligns with ASIC regulatory requirements, General Insurance Code of Practice, and AFSL obligations. Includes audit trail provisions.
Step-by-Step Procedure
Analyse the Addressable Market
Gather and review data on the total addressable market to understand where revenue potential exists.
- 1.1Compile market data including number of potential accounts by region and segment
- 1.2Assess revenue potential based on average deal size and market penetration
- 1.3Identify geographic or segment clusters with high opportunity density
- Use third-party data to supplement CRM data for a complete market picture
Review Historical Performance
Analyse sales performance data by territory, representative, and segment to identify patterns.
- 2.1Pull revenue, win rate, and pipeline data by current territory
- 2.2Identify territories that are overperforming or underperforming relative to potential
- 2.3Assess representative capacity utilisation and workload balance
- 2.4Note any territories with coverage gaps or excessive overlap
- Look at 2-3 years of data to smooth out anomalies from individual deal fluctuations
Define Territory Criteria
Establish the criteria that will be used to define territory boundaries.
- 3.1Choose the primary segmentation dimension (geography, industry, account size, or hybrid)
- 3.2Set parameters for what constitutes a balanced territory (number of accounts, revenue potential, existing customers)
- 3.3Define rules for named accounts versus open territory accounts
- The best territories balance both current revenue and future growth potential
Design Territory Maps
Create the proposed territory assignments based on the criteria and market analysis.
- 4.1Draft territory boundaries using the chosen segmentation approach
- 4.2Assign accounts to territories following the established rules
- 4.3Verify that each territory has comparable revenue potential and workload
- 4.4Create visual territory maps for stakeholder review
- Perfect balance is impossible — aim for territories within 15% of each other on key metrics
Assign Territories to Representatives
Match territories to sales representatives based on skills, experience, relationships, and proximity.
- 5.1Consider representative strengths and industry experience when matching
- 5.2Minimise disruption to existing customer relationships where possible
- 5.3Ensure travel requirements are reasonable for each territory
- 5.4Document the assignment rationale
- Involve the team in the process where appropriate — buy-in reduces resistance to changes
Review and Approve the Territory Plan
Present the proposed territory plan to sales leadership for review, feedback, and approval.
- 6.1Present the proposed territories with supporting data on balance and rationale
- 6.2Address any concerns about coverage gaps, overlap, or fairness
- 6.3Incorporate feedback and adjust the plan as needed
- Prepare for pushback on account reassignment — have data to support decisions
Communicate and Implement
Roll out the new territory plan to the sales team with clear communication about changes, rationale, and transition timeline.
- 7.1Announce the territory plan in a team meeting with full transparency on the process
- 7.2Provide each representative with their territory details and account list
- 7.3Update the CRM with new territory assignments and account ownership
- 7.4Set a transition period for account handovers where ownership is changing
- Address individual concerns privately after the team announcement
Monitor and Adjust
Track territory performance after implementation and make adjustments as needed.
- 8.1Review territory performance metrics monthly for the first quarter
- 8.2Identify and address any emerging imbalances or coverage issues
- 8.3Conduct a formal mid-year territory review to assess whether adjustments are needed
- Resist making frequent changes — territories need time to mature before conclusions can be drawn
Quality Checkpoints
Common Mistakes to Avoid
Expected Outcomes
Variance in actual revenue across territories as a percentage of the median, targeting below 20%.
Percentage of addressable accounts actively covered by the sales team, targeting above 80%.
Spread of quota attainment across the team — a well-designed territory plan should narrow this distribution.
Frequently Asked Questions
What is the fairest way to balance territories?
Balance territories on a composite of revenue potential, number of accounts, existing revenue, and workload. No single metric gives a complete picture. Use a weighted scoring model and accept that perfect balance is not achievable.
How often should territories be redesigned?
Major redesigns should occur annually during the planning cycle. Minor adjustments (adding new accounts, handling departures) can happen as needed. Avoid mid-year overhauls unless there is a significant structural change like a merger or new market entry.
How do we handle named accounts that span multiple geographies?
Assign the account to one owner based on the primary relationship or headquarters location. If the account has multiple buying centres, consider a team-based approach where one person owns the relationship and coordinates with territory reps in other regions.
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