In the previous post, we discussed how data can help revenue growth. Now, we turn to how data can be used to increase profit margins by improving efficiency.


Data delivers powerful insights about the efficiency of the business, whether in sales, marketing, or back office functions, and using them can make the difference between booking a profit or a loss.

To improve efficiency, you need to create a baseline of current business performance and manage upwards from there. The way to do that is by using key performance indicators (KPIs).

Deciding what to measure: the importance of KPIs

KPIs are used to measure aspects of the business that are critical to its success. Consider them a navigational tool that converts operational data to business intelligence.

Many are generic and applicable to any business. Others are drawn from the brokerages business strategy and might vary over time, depending on the different pressures the business must respond to.  

Regardless of where they come from, the first step in using data to improve business performance is to identify which KPIs are important to you.

Modern broker management systems make the process of measuring and reporting KPIs straightforward, but you get what you manage so make sure you select the right ones.   

KPIs to measure sales and marketing efficiency

Sales and marketing KPIs help determine if producers are as effective as they should be and whether your marketing spend is producing a good return on investment. Some more common metrics are:

Sales Velocity:

This measures how quickly sales are being made and is a good headline business metric to follow. The higher the sales velocity, the faster income is being generated, while a low sales velocity suggests problems in the end-to-end sales process that should be investigated further. Calculated by multiplying the number of sales opportunities over a period of time by the average deal value and your % win rate, then dividing that total by the length of the sales cycle.

Producer productivity:

A calculation of revenue per producer, minus the compensation they are paid. Some producers arent as good as others, and it pays to know who they are. Low performance can be down to individual capability, but it might also indicate structural problems such as unfair territory allocations or ineffective training.

Conversion rate:

This is the number of quotes issued and their conversion to policies, split by product line or industry. If the ratio is high, then you might be quoting on the wrong business, where you have a low chance of success, the quality of quotations is poor, or pricing is uncompetitive.    

KPIs to measure back office efficiency

Brokers spend more than half their day on administrative tasks, which is time that could be better spent on clients.  

The efficiency killer is wasted activities: manual processes like shuffling paper; fixing avoidable errors; handling simple queries or attending valueless meetings. Even simple tasks – sending emails, making calls, starting claims can add up to a sizable impact on the bottom line.

All of which makes it important to measure a range of KPIs such as:

Time and cost of processing an application:

The total cost (labor, technology, and other overhead) of application intake, processing, data entry, and quote generation, divided by the total number of applications received over the same period. This, and the next KPI, measure your efficiency in delivering two of the main brokerage processes responsible for a lot of back-office costs and contribute directly to customer satisfaction, so theyre worth keeping a close eye on.

Time and cost of processing a claim:

The total cost of claims intake (i.e., first notice of loss, triage, etc.), claims data entry, estimate, adjustment, negotiation and final settlement/closure.

Customer service cost per policy:

This is the expense incurred by the customer service function divided by the total number of policies in force. Some customers are more demanding than others, and quantifying the cost of those demands can serve as a wake-up call to either manage the costs better or reduce your commitment to that customer.

Improve decision-making: visualizing the data

For a busy brokerage with different business lines, several locations, and a large customer base, leaders can find themselves swamped with data and metrics. Consequently, data has to be presented in an easy-to-understand format that makes it easier to make decisions.

Spreadsheets are no longer fit for purpose. Instead, dashboards bring the data to life, graphically representing policies by line of business, product, and location. Heatmaps can show the scale of problems and deep-dive reports can be used to provide details for planning remedial action.

Ironing out the inefficiencies

Monitoring KPI trends lets you find the inefficiencies, and the next step is getting rid of them.

Some manual processes can be automated or removed, others can be revised to remove errors and eliminate communication silos between departments. Staff can be re-allocated to customer-facing activities or other, value-add, back-office tasks and, by regularly taking their feedback, youll find other areas for improvement.

Monitoring KPIs isnt a once-and-done job and should be integrated to day-to-day operations. Again, technology makes that straightforward by linking data collection to new and changed processes, so you can evaluate the impact changes are having.

Other ways data can improve business performance

Collaborate with carriers

Carriers, such as AXA, are introducing data-powered tools that enable collaboration with brokers to  track applications, claims, and commissions, saving both parties time, effort, and cost.

Tools like that will become commonplace as carriers re-shape and streamline their business models, and its important for brokers to adapt their business else theyll be left behind.  


Data protection regulations GDPR in Europe and the emerging Data Security and Breach Notification Act in the US are increasingly important to brokers, given how fundamental personal data is to their day-to-day operations. By carefully managing data you significantly reduce the chances of non-compliance.


Profits leak because resources arent being used wisely or unnecessary costs are being incurred. By combining KPIs with a mindset of continuous improvement you can find out when its happening and where you need to make changes.