Top KPIs for Your Insurance Agency Performance Evaluation
Insurance agency owners and leaders or decision-makers are continuously looking for new strategies and solutions to obtain sustainable growthHowever, if they closely look into how KPIs can help them evaluate their insurance business’s performance, they would not need to look for solutionsInstead, they can prepare effective strategies to achieve desired goals.
Importance of KPIs for Your Insurance Agency
If you are running an insurance agency, tracking its overall performance regularly with specific key performance indicators (KPIs), you can build your own growth strategiesInsurance agency KPIs are a set of metrics that give an insightful overview of your agency’s performanceFurther, you can use the results of performance measurement to have a close idea of your agency’s strengths and weaknessesKnowing these, you can take actions required for improvement.
Therefore, KPIs are highly important and they play a crucial role in helping you plan your agency’s short- and long-term growth because they bring you valuable information you need to make sound decisions.
Key Measures to Include in KPIs for Your Insurance Agency
Every agency should use multiple types of measures both new and those that already exist in the systemLet’s discuss some of the key measures you should include in your set of KPIs.
Operational measures
These measures help you focus on operational progress and tactics, supporting your decision-making related to daily operating functions.
Project Measures
You can use these measures to evaluate your projects’ progress and their impact on the overall agency’s growth.
Strategic Measures
This is used to track the progress in terms of meeting strategic goals, allowing you to look into details if the set objectives are met or not and why.
Risk Measures
Risk measures include those measures that are focused on determining risk factors that can influence or threaten your agency’s progress or ‘to be precise’ success.
Employee measures
These measures are as important as others discussed aboveUsing these measures, you can identify your employee’s general behavior, various skills, and overall performance.
These are the major areas of measurement you should look into when using KPIs for your agencyHowever, crucial measures are not limited to the aforementioned and can be increased or decreased according to your requirementGetting further, let’s now discuss the categorized KPIs you need for your insurance agency.
Top KPIs to Use for Evaluating Your Insurance Agency’s Performance
Cost Evaluation KPIs
These KPIs will bring you numbers associated with your expenditure in the sales phaseTake a look at these three key metrics to track under the cost evaluation category;
Cost per quote – as the term itself says it refers to the amount of money spend your agency to prepare a quote for a potential client.
Cost per bind – use this KPI to find out how much you spend for policy binding and client acquisitionYou might want to measure this metric monthly to manage biding costsComparing cost per bind with cost per quote reflects how many clients do not proceed after they see the quote, allowing you to address potential issues.
Cost per lead – this metric helps you determine how much you pay for your marketing campaignsMeasuring this on a regular basis will ensure your marketing strategies are working well or not; if they are going out of budget or not.
Turnaround Time Evaluation KPIs
These KPIs are used to track your employees’ efficiency and client satisfaction levelsLet’s discuss some of the key KPIs to track time-related progress in your agency.
Underwriting speed – this is one of the key metrics to track time-based progressIt measures how much time it takes to complete a typical underwriting processThe lower the turnaround time in completing underwriting tasks, the more the client will be satisfiedIf you find some underwriting issues during the evaluation and couldn’t find a way to resolve them, you may consider underwriting support services from reliable providers.
Producer talk time – this measure identifies the level of effectiveness your insurance producers can bring in client engagementHigh talk time reflects a higher possibility of leads converting into business.
Time to settle a claim – it tacks the amount of time your agency takes to settle a claim, depending upon the type of policy you sellSince each insurance policy will have a different claim settlement period.
Lead Evaluation KPIs
Take a look at these lead evaluation KPIs you can use for your agency.
Quote rate – you can measure the number of quotes your agents send compared with the number of potential clients they connect withYou can also use this measure on a per-agent basis to evaluate their performance individually as well as collectively.
Bind rate – it refers to the percentage of quotes converted into legally binding policiesThis evaluation will help you find out how many agents are closing and how many numbers of deals, further determining the top and the least performing agents of your agency.
Productivity Evaluation KPIs
Finally, this is one of the most important KPIs, which help you measure your employee’s productivity, enabling you to have an idea of how well they are performing according to set key responsibility areas (KRAs)Here’re some of the metrics falling under this category;
New policies per agent – using this KPI, you can determine the number of new policies generated per agentBesides that, you can also compare the obtained numbers to determine how many agents have contributed in the best mannerThis KPI should be monitored weekly or monthly to track your staff’s performance and take appropriate actions well in time.
Loss ratio – the loss ratio is one of the most crucial metrics you should use to measure your insurance business’s profitabilityIt evaluates your agency’s loss in the form of claims settled comparing it with the total premium collected, which is usually done per policy.
A high loss ratio indicates your agency has been through financial loss, most probably caused certain factors including, slow underwriting, not estimating claims properly, lengthy claim cycle, lack of effective insurance agency management, etc.
If you find a lack in the way you manage your agency, you may consider outsourcing insurance agency administration services to a reliable insurance services firm.
How to Effectively Track KPIs for Your Insurance Agency?
Ideally, you should have a reporting system (most commonly an EMS) in which employees put relevant information about their daily job responsibilitiesOther than that, CRM systems are also used to track client-related activitiesIf you are not using these systems, then it is highly recommended to dive into operational data and reports and use the above-discussed KPIs to evaluate your agency’s performance and make appropriate and timely decisions for progress and growth.
With some of the best insurance agency KPIs, you will be able to maximize your business performance and bring your staff to a better position that would be effective in bringing successThe actions you take after a KPI-based performance evaluation will help you optimize your agency’s efficiency and productivity so that you can obtain sustainable growth in the years to come.
