Insurance agents and brokers have been accustomed to considering primarily four key performance indicators (KPIs) when assessing how to best measure their overall success:

  • Customers
  • Policies
  • Premiums
  • Commissions

But there is one more KPI that is often overlooked


It is actually the #1 KPI that insurance agents should focus on.

Brokers need to measure performance

A vital part of achieving growth is measuring it. Clearly definable metrics, such as an organization’s profitability, help motivate management to do what it takes to ensure that targets are reached and keep the focus on the bottom line.

Being able to identify and quantify unprofitable customers, portfolios, policies and activities in real-time will enable agents to take immediate, confident action to better manage the firms time and resources. Customers, partners and third-parties respect and listen to agents/brokers who have data to back up their positions. In fact, the more insight you bring to the table, the stronger your negotiating position will be with any stakeholder.

If your agency is making profitability its key tracking metric this quarter (and we think it should), then the following four tips should put you in good stead to achieving significant growth.

1. Rationalize books of business to create efficiencies

Whether your agency deals in personal lines of insurance, commercial, or a mixture of the two, it’s vital that you know how much profit each is contributing to the firm’s overall financial health.

From a management and operations perspective, commercial and personal lines are two very different beasts. Contents insured, liability concerns, and the extent of vehicle coverage (which in commercial is much wider) are all significantly different. In addition, selling business insurance is, of course, a B2B sales process that involves different expectations and methods than its consumer counterpart.

Every major line of insurance that your agency supports, whether it be fire and theft or motor insurance, requires unique expertise, dedicated marketing materials, and planning and research to ensure that you offer a better proposition than your competition in that area.

Knowing which types of insurance lines are better for your customers via real-time data on sales cycles, renewal rates and claims frequency, for example, will improve engagement with providers. With advanced data-driven and cloud technologies offering extensive dashboards and reports, this information is at your fingertips.

Also, the ease and availability of data from an end-to-end platform provides management the visibility and insights needed to determine how the different insurance lines are performing. This data enables them to make the relevant business decisions that will ultimately help grow the business, such as terminating under-performing lines or reducing resource investment in them.

Many agents/brokers will be surprised when the data shows that a potentially significant amount of their business may have been generating minimal revenue. Thus, investing resources in only profitable insurance lines is a winning strategy.

2. Smart technology pays long-term dividends

With the constant pressure to cut overheads, it may seem tempting to simply ‘make do’ with your current technology stack no matter how historic its deployment date. But there are two reasons why this is faulty thinking:

  1. Using legacy systems accrues ongoing Although difficult to quantify, these are the result of customer frustration due to your systems’ inability to meet modern expectations (such as the ability to conduct basic operations via a self-service portal); increasing maintenance costs (by staying with outdated systems); and difficulty in integrating current systems with new technology.
  1. Using advanced cloud technology saves money. Less IT resources are required both during setup and maintenance. Physical hardware does not need to be purchased and maintained on-site.

But more importantly, advanced technology delivers a superior customer experience through offering better, faster and more personalized service.

Those remaining with legacy systems therefore face both direct costs, related to using platforms incapable of meeting the expectations of modern customers, and opportunity costs, due to missing out on the great potential to drive efficiencies. If this is you that we’re talking to: take action today and your agencys profitability will surely see a boost!

3. Provide value and strengthen relationships

The rise of the internet, with its emphasis on self-sufficiency and the empowering of consumers to do everything possible for themselves online, has created a strong pressure on middle-man industries such as insurance distribution. Those remaining in the game need a stronger value proposition to answer consumers’ ever-mounting question: ‘Why couldn’t I just do this for myself?’

In order to remain competitive and profitable, insurance agents need to bring more value to their clients and to take on the role of a trusted advisor or consultant for them. Doing so will enable them to provide the most value to their customers, strengthening the relationship and creating dependency.

They can do this by leveraging real-time data and actionable insights gleaned from a platform that gives them customer intelligence capabilities and a 360-degree view of their business. This, in turn, leads to cross-selling and upselling opportunities and provides the value needed for the customer to think twice before looking for alternative agents/brokers when the time for policy renewal arrives.

In addition, workflow efficiencies that are created in a seamless platform built specifically for both front and back office operations make customer renewals an automatic part of the process and prevent them from falling between the cracks.

4. Keep track of your most profitable accounts

Time tracking is fundamental to ensuring that your manpower is directing its efforts towards ensuring the maximum return on investment (ROI).

To maximize profitability, it’s important to allocate resources in close accordance with the accounts’ levels of profitability to the company. This avoids giving excessive “free” time to customers that hold comparatively little monetary value and can help management to identify areas that are causing serious time-drain or backlogs — areas that could be ripe for process improvement.

Time tracking is also a useful means of keeping track of your agents’ profitability. 80% of surveyed workers in a recent survey admitted to having ‘stolen time’ from their employers. Therefore, it’s important to, both, hold your agents accountable for how they spend their time and to ensure that their time is being invested appropriately on your highest yielding accounts.

Make profitability your top KPI

Profitability should be the KPI that outweighs them all. Run a rationalized, tech-empowered operation that makes liberal use of tools like time tracking and you’ll see your bottom line taking a boost in no time.