The Connected Business of Insurance
April 06, 2016
It is the Masters golf tournament week. This means azaleas, pimento cheese sandwiches and of course, incredible golf. Taking place in Augusta, Georgia at Augusta National Golf Course and steeped in Southern traditions, the annual Masters tournament is where top global golf talent compete for the famed green jacket.
With each year, viewers watching the Masters on TV see an increasing number of stats and data on each of these world famous players. Scrolling along the bottom of the screen, networks broadcast stats on distance, accuracy, iron play and short game. It’s really quite fascinating how each facet of a player’s golf game can be digitally tracked and compared, then improved upon.
Even more amazing is that this one tournament holds just a small subset of all of the data that goes into the game of golf. Golf has millions of data points behind it. GOLFstats.com alone boasts 1.6 million records (that is records per golfer) for men/ladies golf tournaments in the U.S., Canada and Europe. The record for Tiger Woods for example, takes into account EVERY single tournament he’s played, each swing from driving distance to short game – even his cash winnings.
Truly, big data is everywhere these days.
Like golfers, independent agents and brokers have a vast amount of data to draw upon and analyze to improve their business game, both long and short. But, what information is critical to understanding your business on a deeper level?
Here are some questions you should ask yourself to understand your game, improve your swing and get one step closer to a business performance “hole-in-one.”
Look at the trend of new business over the last two years.
- How many new clients are you adding on a quarterly basis?
Dig into this data to determine what is contributing to the increases, decreases or steady streams on a quarter-by-quarter basis. Are certain lines of business driving new clients more than others?
- Which geographic locations are driving new business?
Your agency or brokerage might be focused on expanding your client base in a specific suburb in your main city of operation. To increase awareness and drive new sales, you could run an advertising campaign, including local print and TV, for a month targeted at this specific suburb or nearby neighborhoods to identify success in current and new geographies.
- Is there seasonality in your revenue stream?
Consider what could be driving the seasonality and execute more marketing/sales tactics during the off-season to drive revenue.
An important factor of being able to react to changes in the marketplace is understanding your current customers and what impacts their retention and renewals.
- What clients are driving the most revenue and why?
You should identify client value, size, policy mix, servicing team, and various client trends over time – and evaluate how each is impacting your bottom line.
- What clients could be affected by a natural disaster?
Natural disasters are inevitable. Can you identify who is impacted by a recent earthquake and what coverage they have in order to proactively reach out and provide your trusted advice?
- What is driving client retention?
Analyze factors affecting client retention, such as insurer choice and renewal submission status, against various drivers, like policies, revenue or premium.
Your staff keep your business running. It’s important to look at how they impact the growth and profitability of your business.
- What is the average revenue per employee at your firm?
Evaluate which employees (and potential branch locations) of your business are leading revenue per employee (RPE) and closely monitor individual, team, and total business performance against this essential metric as it changes over time.
- Who are your top performing producers?
Identify top performers and evaluate their best practices to share with the wider team to enhance overall sales performance.
Lastly, it’s important to look at your insurer relationships to see which are the most responsive, providing the best services and driving the most revenue.
- Who has the best submission rates?
Track the performance of submission responses, declines, and what policies were written with each of your insurer partners.
- Who brings in the highest policy volume and revenue?
Look at insurer performance in terms of new business and activity across all of your insurers.
Consider More Robust Reporting
It’s hard to imagine analyzing so many metrics when traditional reporting is complex and time consuming. In addition, basic reports on any of the scenarios mentioned above, created in Excel for example, are defined and static and only offer a point-in-time snapshot of one or more business metrics. Consider robust business intelligence applications, such as Applied PerformanceManagement, to transform data into visual insights so you can more efficiently understand how your business is playing “the game” and the strategies needed to improve.
Understanding your data gives you a competitive advantage into today’s digital market, as well as the opportunity to grow your business. While our handicaps may never be as good as the golf pros at the Masters, we can at least analyze our performance data in many of the same ways.
How are you leveraging data to better understand your business? Share your thoughts here.