A Key Performance Indicator (abbreviated as KPI) is an evaluation concept widely used by organizations across the globe. It is best used to evaluate an organization’s success in achieving its strategic goals by track remote employees and several critical processes and activities.
Insurance KPIs or metrics are used by insurance companies to monitor their performance and productivity. These metrics can help insurers identify operational areas that are successful and that need improvement. These metrics also allow investors to compare multiple insurance companies to ensure they invest in the right one.
Defining and keeping track of the right KPIs is crucial for the success of your insurance business. It is the very first step where you collect valuable information in order to make important decisions. However, these days, insurers are facing a new challenge, which is making it difficult for them to connect their employees with KPIs, especially those who are working remotely.
Therefore, the following are some of the most important metrics insurance companies should use to measure the productivity of remote employees.
- Create a policy to implement on the measurement of remote employees’ productivity
- Define a KPI for each role
- Create steps to complete each task
- Use a project management software to track work and improve visibility
- Keep accurate track of employees’ working hours
- Set an estimated completion time for all tasks
- Build a robust reporting system
- Use a reliable structure to measure progress toward objectives
Using these, you can work on a variety of operational improvement plans, leading to better insurance business process management. But, first things first, you need to find which metrics are helpful for your insurance business; therefore, let’s read about some of the important ones.
KPIs and Metrics for Insurance Businesses
- Record the time taken to respond to the customer
- Track the time taken to close certain cases (for instance, cases that take longer than the usual processing time)
This will help you measure performance and can be a great customer satisfaction indicator. Agent time measurement is important to find how much time the agent is dedicating to specific tasks, helping you evaluate their efficiency and spot areas that need immediate improvements. It would be even better to improve processes that could lead to enhanced performance of employees. For an accurate evaluation, keep track of;
- The average time your company takes to settle a claim (keep different records for different types of policies)
- Underwriting speed
Are your agents or sales teams bringing enough results? Keeping track of their activities provide helpful information about your company’s overall performance. For this, you can use the following metrics.
- Quotes vs. Production
- Number of New Policies per Agent
- Expense Ratio
- Loss Ratio
Measuring costs is vital. Check how much money your company spends for lead conversion; this includes the classification of expenses at each stage of the entire sales process. In return, cost evaluation will help you determine how you can optimize your business expenditure, which is crucial for excellent insurance agency management. Here are a few examples of insurance business KPIs for cost evaluation.
- Cost per quote
- Bind Cost (to bind a policy or acquire a customer)
- Cost per claim
- Cost by source (cost per acquisition)
Since the insurance business is vast and complicated, you might want to use different performance indicators for your company’s performance. Thus, to help you further, here are some of the points you should consider while developing KPIs.
Set a Goal
This is paramount; you need to have a clear goal in mind before creating a KPI.
When developing KPIs, consider what impact they can have on your business processes and the whole company?
Integrate KPIs with Processes
Try to align performance metrics with the existing operational framework of your company. This will not only reduce your burden of resource management but also help you spot bottlenecks and other factors that are creating process-related inefficiencies.
Set a Culture
Keeping your staff’s mentality in mind, create an excellent working environment in your company that could have a positive impact on the workplace while encouraging and rewarding employees for their work that benefits the company.
Data Compilation & Reporting
This is one of the most important aspects of developing KPIs for your insurance business. You might put a lot of effort into creating new KPIs for your company, but to utilize them effectively, you need to track and interpret data efficiently. Here, a KPI dashboard can help.
Make Better Decisions
One of the purposes of KPIs is to make informed decisions. You must ensure that the KPIs you have developed are providing you with valuable insights into your company’s operations, helping you make better business decisions.
The Collection of Data and Building a KPI Dashboard
The data you will need for the selected KPIs would most likely come from your company’s internal surveys, notes, logs, work reports, accounting department, process management systems, etc. According to your convenience, you can collect this data daily, weekly, monthly, and even yearly. After data collection, you need to organize it so that it can be used in a way that will help you evaluate the overall performance of your company.
Having a KPI dashboard here becomes an essential tool. It is a collection of charts and graphs that present the information. It is a good idea to use some software systems that create reports and KPI dashboards automatically.
This writing piece will help you to make a set of effective insurance key performance indicators. Using insurance KPIs we discussed in this blog, you would be able to improve your company’s processes, for instance, underwriting, forms processing, insurance claims management, etc. Most importantly, you should not ignore the importance of utilizing a dashboard to manage data and effective KPI reports.
These days, several companies are struggling to achieve complete visibility into their most crucial performance metrics. For these and similar insurance companies, it is advised to use remote employee monitoring and time tracking solutions that offer an easy way to track and distribute KPIs across the company. With an efficient solution, you can connect with your agents and see their performance from wherever you are. These solutions can help your company enhance engagement, accountability, and reporting. So you can be leading to the improved overall performance of your company.