Key Performance Indicators, or KPIs, are an excellent way to see just how well your agency is performing and what areas you may need to focus on. However, knowing where to start and what KPIs are important to track regularly can make all the difference when it comes to evaluating your current business strategy and monitoring your business growth. Dedicated insurance-specific CRMs allow you to track these key KPIs with the touch of a button, allowing you to then focus on the results and reaching your goals.
What is Insurance KPI?
Insurance KPIs are measurements used by insurance companies to monitor key areas of the business to identify areas of operational success and areas that need attention to achieve your business goals. The metrics KPIs track focus on areas of sales, costs, productivity, and claims.
Importance of tracking KPIs
The old saying, “If you can’t measure it, you can’t improve it.” holds true for just about every aspect of your business. Tracking specific KPIs allows you to get a clear picture of your business. Not only can you see where you are finding your greatest success, tracking KPIs allows you to pinpoint areas of your business that need specific attention to improve. This allows you to prioritize which areas of your business you can focus on first to achieve the most impactful improvements.
KPIs your business should be tracking
When it comes to KPIs, there are hundreds of different metrics available, but trying to track everything can be near impossible and, when you try, may prove to be more stressful than beneficial for your business. Here we offer a list of some of the top insurance KPIs, organized by category, that can provide better insight into your business and its operational success.
Productivity KPIs focus on the performance of your insurance agents and their performance. You can track both individuals as well as team performance. Some top KPIs in this category include:
Quota vs. production
This KPI allows you to evaluate your agents and see how well they are meeting set goals that have been established. This allows you to evaluate each agent individually, but it also lets you see if goals and quotas are set too high. For example, if every agent does not meet quota expectations, the current quotas set are unattainable and not motivate employees. Lowering quotas to an attainable level may provide motivation, and you can eventually build back up to higher goals.
New Policies Per Agent
Similar to the quota and production, the new policies per agent KPI tracks individual agent productivity. This matric allows you to see how each agent is performing and allows them to see how they compare to other team members. These numbers are often a way to motivate agents and create a more efficient sales team. In addition, this allows you to measure growth by new agents.
Underwriting Expense Ratio
The Underwriting Expense Ratio KPI measures the company expenses against the total premiums acquired. When the value of this ratio is high, it often shows a lack of productivity or inefficient production within the agency.
Time-related KPIs measure how your agency and agents utilize time and show you ways to improve your efficiency.
Producers talk time and dials
Your goal when making calls is to engage potential customers, and low talk times often mean low engagement. This KPI measures how productive calls are and how they convert. In many cases, low call times may mean skill development is necessary for your agents.
The Underwriting Speed KPI measures the time required for the underwriter to process an application. Long time frames can indicate that customer information collection is not adequate or staff is working unproductively. Long underwriting times often lead to unhappy customers.
Cost-related KPIs allow you to measure costs associated with each sales pipeline. These are some of the top cost-related KPIs.
Cost Per Bind
The Cost Per Bind KPI, also called the cost per acquisition, shows how much it costs your agency to bind a policy and acquire a new customer.
Cost Per Quote
This KPI is often overlooked by insurance agencies but can be very important in evaluating your business. It measures the costs you incur by putting a quote in front of a customer. If this cost is low and your cost per bind is high, chances are something is causing your customers to drop after receiving an estimate. It gives you insight and alerts you to the need for possible changes.
Cost Per Premium by Lead Source
What is advertising or marketing source proving the most beneficial? This KPI tracks your monthly expenses based on lead sources, showing you which marketing source provides the lowest cost per acquisition.
Sales are essential for your business growth, and tracking sales and lead KPIs are essential to see where you need to make improvements to grow your business.
The contact rate KPI takes a more in-depth look at contact conversion, measuring how many leads an agent could contact versus the total number of leads they reached out to.
This KPI tracks the number of new clients you receive by referrals from existing clients versus the total number of new clients. This helps you gauge how happy existing clients are with your service, as well as how much of your growth is organic versus advertising.
The Bind Rate KPI measures the percentage of quotes that convert into binding policies.
Claims are a significant part of the insurance industry, and that means they should also be an important part of your business tracking. These are some of the top claims-related KPIs to take note of.
Average Cost Per Claim
You will never be able to avoid paying out on claims. That is just a part of the insurance industry. This KPI measures how much your payout for each claim and is categorized based on the type of claim. This helps you properly assess the risks associated with each policy and adjust policy pricing as necessary.
The Claim Frequency KPI measures the likelihood of loss by predicting how many claims are expected based on the number of policies you have outstanding.
Developing KPI for an Insurance Agency
Here we have discussed only a small number of the potential KPIs that you can use to help your business reach its goals. While you can see the wealth of information this tracking provides, you may feel overwhelmed and confused about where to start. Tracking all this information on a regular basis can seem overwhelming and time-consuming, but it doesn’t have to be.
Choosing the right CRM program for your agency can make all the difference when it comes to KPI tracking, as all these metrics can be monitored and evaluated in an automated system, leaving you with all the results and none of the work. This allows you to truly monitor your agency productivity without having to stress over the reporting process. And not only will you receive the numbers from each KPI, BUT the right CRM can ALSO help you better understand how to improve those numbers.