What life insurance KPIs should I be measuring?
- Policy lapse ratio.
- Average customer satisfaction.
- Sales/new business.
- Quota vs. production.
- Average policy size.
- Revenue per policyholder.
- Average cost per claim.
There’s always room for improvement.
Whether it’s a little or a lot, you can continually get better.
Measuring life insurance agent key performance indicators (KPIs) is a crucial element of getting more business – and retaining the clients you already have.
KPIs help you identify what’s working and what’s not so you can make the changes that will give your revenue a boost.
Let’s look at what life insurance KPIs are, what you should be measuring and why.
Life insurance KPIs
Life insurance key performance indicators are business metrics that track the performance of life insurance agents and their products over a specific time period.
As a life insurance agent, here are the KPIs you should be tracking.
1. Policy lapse ratio
This is a measure of how many policies get renewed compared to the ones that don’t.
Low numbers here can indicate an issue with customer service, billing or another area.
Customer service is notoriously an issue for life insurance agencies.
Having a KPI like this in place, helps you to zero in on problems and start turning things around before you lose more business.
2. Average customer satisfaction
Since customer service is often a sticky spot for producers, it’s a good idea to have a specific KPI to measure this interaction.
As an insurance agent KPI, average customer satisfaction is the number of clients who are satisfied with their experience compared to the number of people who were surveyed.
When you dig a little deeper and get into specifics about customers’ experiences, you can make positive changes.
3. Sales/new business
This metric focuses on the number of new policies sold by which life insurance agents. It may or may not be measured during a specific time period.
It’s useful for evaluating individual producers, as well as developing a sales strategy that works.
4. Quota vs. production
It’s vital that you know how effective individual life insurance agents are.
This measurement shows how well producers are hitting their sales goals.
With this knowledge, you can set realistic goals that motivate the whole team.
5. Average policy size
This life insurance KPI is the size (price) of all policies sold in a certain time period divided by the number of life insurance policies sold.
6. Revenue per policyholder
This measurement tells you the amount of revenue generated per policyholder.
It’s information you need because a low number indicates something is breaking down in your sales process and/or your customer service practices.
7. Average cost per claim
How much is your organization paying out for each claim by a client?
You need to know and that’s what this metric will tell you.
One note about this KPI: When keeping track, you should categorize the claims based on the type of claim, since they have different costs.
Life insurance KPIs to track
You want to make changes with a lasting impact on your life insurance business.
Measuring life insurance KPIs like policy lapse ratio, average customer satisfaction, quota vs. production – and others – is the best way to hone in on what’s working and what you need to reevaluate so that you’re closing cases and hitting your numbers.