Measuring Your Success: Identifying Important Insurance KPIs

KPIs for Health Insurance Sales

No matter how long you have been selling insurance, you know there are certain measurements to help you judge your success. These are often called Key Performance Indicators (KPIs).

KPIs for health insurance sales include:

1: Sales leads: The number of individuals or businesses that you’ve received or identified (or a third-party resource has identified) as a prospective new customer.

Your leads can come through your own efforts, your website, referrals from current customers, social media, direct mail, and other sources. Your goal is to always have leads, but not to let them turn cold because of your or another broker’s inaction.

2: Conversion rate: The percentage of leads that you successfully convert to a sale.

3: Cost per lead: What you pay, if anything, for a lead depends on multiple factors. Those include the lead source, how segmented your list is (filtering options), and how much competition you have. (Is your target market popular among insurance agents? What are others willing to pay?)

 4: Written premium: The amount of revenue generated by your clients – both first-year customers and renewing clients.

 5: Retention rate: The percentage of business renewed each year. It’s important to consider both policies sold and annual premium.

There are other measurements to consider as it relates to insurance sales, too. Insight Software suggested there are as many as 28 Best Insurance KPIs and Metrics Examples in a June 2023 post. (Their list encompasses sales, claims, and reporting.) Among their sales KPIs are the following:

  • Quote Rate and Contract Rate: This is a performance measure. It looks at quotes requested versus the number of quotes acted on or to whom you have reached out.
  • Referrals: This KPI is just what you would expect; it measures new clients referred by existing clients against total new clients over a specified period. This helps you in two ways: 1) it measures how satisfied your existing clients are (since they are willing to share your name and contact info with others), and 2) it’s useful in measuring sources of your agency growth (referrals vs. advertising vs. social media/online promotion and other methods).
  • Sales Growth: This metric measures your sales increase (or decrease) over a specific period. It includes both new sales and renewals.

In an early 2023 post, Oracle NetSuite lists more KPIs to consider, including:

  • Monthly Sales Growth: If you review monthly sales data, you can quickly spot problems and act on evolving trends. You do it by looking at sales for the current month minus sales from last month; then you divide that figure by sales last month, multiplied by 100.
  • Average Customer Purchase: Your median customer purchase value is the average amount each client spends on products or services with your agency. If you can persuade a current customer (individual or group) to buy more from you, that is usually better than making a first-time sale to a new customer. Bundling also creates a greater bond with your customer. The Average Customer Purchase amount is determined by taking your total sales and dividing it by your total customers or total transactions. Some brokers and agencies use the average purchase value to help shape future sales strategies to motivate existing customers to spend more.
  • Sales by Contact Method: Tracing a completed sale back to its origin offers great sales data. It provides insights into the most effective tools to generate sales — and it can help you decide which methods to avoid, use less frequently, or focus on more in the future. The method of calculation is sales per contact method divided by total revenue multiplied by 100.
  • Average Sales Cycle Length: This is the average length of time from an initial contact to closing a sale. Tracking this metric is important to evaluating sales efficiency. Once you have a sales cycle length benchmark, you can look for ways to reduce the sales cycle. The Average Sales Cycle Length formula is the total number of days for closing all sales divided by the number of new sales.

Other Things to Consider

If you are losing customers each year (or failing to attract new clients), it’s important to find out why. Are there service issues that are driving customers away? Is it “all about price”? Are departing groups all covered by the same carrier? Did a major hospital or medical group drop out of a carrier network? If so, that could mean the issue is not really with you, your colleagues, or your agency. But you do need to find a way to respond.

Maybe you can offer your customers a viable alternative health plan? Or maybe just a different network? Perhaps the carriers your clients want are part of the CaliforniaChoice private exchange. If you move that group to CalChoice, it may resolve some of the issues – while broadening coverage options for employees without increasing costs for the employer.

Read our blog, 3 Ways to Increase Insurance Client Retention, for tips on keeping customers coming back.

If you’re working with Word & Brown as your GA, ask your representative about more ideas that can help you overcome customer objections or service issues.

If you are not already doing business with Word & Brown, contact us at 800-869-6989 or complete our online information request to get started.


How Much Can You Earn as an Insurance Broker?

Find out what you can be earning as an insurance agent in our handy, up-to-date salary guide. Produced by our in-house experts, this resource is bound to help you in advancing your career.

Word & Brown Salary Guide