Benchmarking for Improved Financial Performance

Does measuring performance matter?

Strong measurement leads to strong management. After all, what you measure can provide you with insight into gaps, opportunities, and other areas in which you can focus and invest. So, let’s think about the use of analytics in your insurance organization. Your Agency Management System (AMS) contains a treasure trove of useful data, but are you using this data to its fullest capacity?

Let’s first explore what goals can best be supported by analytics, then talk about how the data from your AMS can better inform your decisions.

dog holding measuring tape

Develop Your Analytics Game Plan

The data journey begins with determining what you hope to accomplish with the data, so you must first ask four questions:

  1. What do you need?
  2. How will you get it?
  3. Where will you get it?
  4. What value will you derive and at what cost?

Avoid building models or theories—stick with real problems and the outcomes you want to achieve.

spongebob thinking

Five Levers for Building Organic Growth with Analytics

You may already be familiar with the three main drivers for growth:

  • Exposures and rate changes
  • Client retention
  • New business generation

For the most part, exposures and rate changes are out of the agency’s control, and with client retention averaging between 90% and 95%, there’s not much room for differentiation.

But where you can be proactive in organic growth is in new business generation, but how do you harness data analytics to improve it?

  1. Know Where You Stand in the Insurance Agency Rankings

According to Reagan Consulting, sales velocity is the best metric for measuring your organic growth against that of your peers, and they define it as “new business written in the current year divided by the prior year’s commissions and fees.” Best practice agencies have a sales velocity of 12-13%, so use your data to see how you measure up, then consider the following tips to drive your sales velocity even further.

  1. Identify Account Rounding Opportunities

Account rounding is one of the most reliable ways to build profitable growth. Consider what data you have that can help account managers identify and seize opportunities that may be right under their noses.

For example, most businesses today are in need of cyber insurance. Attackers actually prefer small-to-medium businesses. Look across your commercial accounts to spot cyber gaps in your insureds’ coverage.

  1. Increase Account Manager Efficiency

When you use analytics, you can connect action to results. To increase the performance of account managers, start tracking what their activities and outcomes are. For the account rounding opportunities mentioned above, measure which got traction. It’s not just about tracking revenue—it’s what did to write more lines.

  1. See an Overview of Key Performance Indicators (KPIs)

Should you change your overall business mix, shift to larger premium policies, establish practice groups, or even clarify your goals and compensation alignment, you’ll want to be able to monitor your critical KPIs with a dashboard or spreadsheet.

  1. Measure Carrier Partner Performance

An often overlooked path to growth is in improving your relationships with carriers. Selecting, but more importantly reevaluating your insurance carrier representation is critical if you want to succeed every year. Your firm changes, and so should your carrier partners.

Leverage analytics tools that help you maximize carrier contracts while also considering a wide range of components for success: people, technology, underwriting appetite, products, pricing, and access to responsive underwriters. At the end of the day, both of you want to close the deal with your customers.


Moving Forward with Analytics

Don’t let yourself become overwhelmed by analytics. Start small and focus on real, solvable problems. Commit yourself and have conviction that your changed behavior will optimize your efficiency and give you more client-facing time.

Need help elevating your performance? Contact us to find out how you can deploy new strategies that maximize productivity and profitability.