The insurance industry can certainly be unpredictable at times, especially where finances are concerned. That’s why
financial reporting software and other management solutions are so essential. Having the right system in place to ensure that you’re hitting all of your key performance indicators (KPIs) and other benchmarks is a must.
It can also make your company more efficient and successful, which is why the team from
Synoptix wanted to highlight some of the most important industry KPIs for you to monitor.
Average Policy Size
For insurance companies looking to determine the success of their sales and marketing plans, divide the total number of insurance premiums by your total number of policies. This will help you determine the average policy size. Doing so will also enable you to use such data for risk management, in addition to determining your long-term growth.
Expense Ratio
This is what tells you how much you’re paying to earn a single dollar. It’s found by dividing your total cost of expenses by your revenue. By paying close attention to this data and whether it’s dropping or rising, you can get a better idea of your expenses and hone your firm’s resources where they’re needed most.
Cost Per Quote
Adding up everything it takes you to create a quote, from labor expenses to material costs, will give you a better idea of the money it takes to attract a new policy-holder. If they’re high, it could be a sign there are some inefficient practices that, once corrected, could help your firm save more money.
Loss Ratio
Just like it’s important to determine how much revenue you’re making, it’s also key to determine precisely how much you’re losing. Determining loss at an insurance company is one of the easier
industry KPIs to monitor, as it’s the direct ratio of what you pay out in claims compared to the amount of revenue collected due to premiums.
Net Profit Margin
This is the metric that every company, whether in the insurance industry or another one, uses to track its overall profit margin. You can determine your net profit margin by placing your net income over your company’s total revenue. It’s important for leaders in the company to understand this metric and whether it’s rising or falling to make key decisions for the future.
Contact us today for more information about our cutting-edge
financial reporting software. We also specialize in
budget and forecasting solutions,
consolidations, and more.
Contact us online today or call 801-254-4503.