Insurance Agency Key Performance Indicators

KPI’s, or Key Performance Indicators are used by organizations to measure performance. These are quantifiable measures that can quickly determine historical, current, and future performance. It all depends on the KPIs chosen and the platform used. KPIs for insurance agencies might include net new clients, renewal growth, producer quotes, average book by producer, revenue per employee, and net losses. We will focus on KPIs that insurance agency owners and producers can use, but these KPIs will also be important to agency executives.

The agency’s goals should be reflected in key performance indicators. It is important to choose KPIs that quickly indicate tactical and strategic success. The KPIs for Producers, which are listed below, might be very similar to those used by many industry sales executives.

  • New Commission Revenue
  • Renewal Commission
  • Ratio of net new commissions to renewal commissions
  • Average Book of Business for Producers
  • Revenues by Lines of Coverage
  • Total new quotes
  • Close Ratio (Ratio between Closes and Quotes)
  • Closest by Lead Source
  • YTD Revenue Growth (year over year)
  • Revenue from Employee

These Key Performance Indicators are used to measure your business and provide indicators of future performance and past success. Year-over-year revenues are compared to past performance. Web meetings and proposals provide a forward-looking indicator of your future business. You can predict a decline in new business if your prospect meetings dropped 20% from the previous quarter. If you saw the same drop as a year ago, it is a good indicator that your sales are comparable.

While KPIs may vary from agency to agency, they should be consistent and accurately defined and measured if you want them to be valuable. To track and measure performance, KPIs should include goals or targets. Our company’s goal is to close half of our proposals and 25% for web meetings prospects. To track our progress, we measure this goal against the KPIs in this category. One goal for an agency could be to keep a $1 million book of business for each veteran producer. For new producers, you might have a different goal. These goals should be tied into your overall KPI tracking. This will provide quick insights into the health and future performance of your agency. These KPIs can be tracked year-over-year, providing historical insight into your performance in mission-critical areas. KPI rollups can be used by larger agencies to track sales, marketing and accounting KPIs departmentally. A few mission-critical KPIs will then be rolled up to an executive level. You can do this manually or with an automated system.

What systems are available for KPIs tracking? An agency can use any system, from Excel spreadsheets to CRM to Agency Management Systems to complex KPI dashboards. You may also use selected Web metrics from Google Analytics and other web monitoring tools. KPI’s should not exceed a certain number to achieve maximum effect. Tracking 10 KPI’s per month is acceptable, but 50 would lead to information overload. The dashboard of your car is an analogy. These measurements could include fuel level, RPMs and speed. These are just six of the KPI’s that can be monitored while driving. You may also find more advanced KPI’s such as the average mileage per gallon, current MPG and tripometer. These KPI’s might not be visible constantly as they may not be considered critical to your driving. Consider your insurance agency KPIs the same way. Pay attention to only those that are essential to your success.