What Are Your Insurance Metrics?

Financial results tell you what has been accomplished, but the right metrics are leading indicators for where you are headed.  For an early-stage company, tracking the right metrics can provide critical operational and sales intelligence.  What are your metrics?

This excellent non-insurance post, “16 Startup Metrics,” (here) from Andreessen Horowitz discusses the importance of metrics for early-stage companies, and also identifies key metrics.  Key points:

Metrics are leading indicators
Metrics can be better than financials
Embed metrics into your models for projections

Insurance and Insurtech startups can develop their own metrics based on their specific insurance products, customers, and economics.  Metrics in the insurance business are different because of the nature of the business.  Using the insurance distribution segment as an example, revenues are the commissions and fees generated by the sale of insurance – premiums are not revenues.

In addition to tracking revenues and other financial results, most insurance distributors focus on business flow as measured by submission and policy counts.  Because the characteristics of new business is very different from renewal business, most insurance distributors look at new business and renewal business separately.  Together, these metrics can provide real time indicators of what is flowing through the business.

Segments of the insurance business can vary widely and require different or additional metrics.  For example, some personal lines products have a very high early cancellation rates (ie low retention rates) and therefore cancellation and renewal rates need to be watched closely.

Here are a few articles on insurance metrics (KPIs):

Everquote                    10 Crucial Insurance KPIs & Metrics For Agencies In Growth Mode
insightsoftware           28 Best Insurance KPIs and Metrics Examples for 2020 Reporting
GuidingMetrics           The Insurance Industry’s 18 Most Critical Metrics
InsuredMine                5 Data Points Every Insurance Agents Should Track
Superior Access          7 Key Metrics for Independent Agents to Track Agency Growth
GenRe                          Measuring Underwriter Performance and Productivity
InformationWeek      Measuring Underwriting Productivity and Quality: The New ROI Metrics
PWC                            Commercial insurance performance measurement
iDashboards                5 Crucial Data Points for Insurance Companies

As an early-stage company, have you developed a set of metrics that are leading indicators for your business?

Innovate Insurance – Innovation & Entrepreneurship in Insurance

Also, see the related Specialty Insurance Blog – News & Commentary on Specialty Insurance – with an Emphasis on Professional Liability Insurance

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