Success can be defined in many ways. In life insurance sales, you could look at the satisfaction of your clients, the growth of your agency or the income you’ve made in the past year. These are only broad strokes at how your business is performing though, and it’s hard to find areas to improve based on only one of these criteria.
As a life insurance agent, it’s more important to track a few different metrics and how they align with one another. This varied approach will allow you to make more informed, data-based business choices in your career.
Here are five metrics in life insurance sales that are key indicators of how your life insurance business is performing. By regularly tracking all five, you can improve the efficiency of your business.
The five metrics of life insurance sales
Regardless of your experience as a life insurance agent, knowing what to track and how it aligns with your business goals is not always an easy picture to paint. With so many moving parts (coupled with the less hands-on privilege of working with automation), deciding what’s important to keep your eye on can get lost in a sea of numbers.
The following list is meant to make that job a little easier. Tracking all five metrics simultaneously will ensure the clearest picture of your performance and growth.
Here are our five metrics to watch while growing your life insurance business.
#1: Conversion rate
Your conversion rate is the percentage of your leads that turn into customers. Outside of it being a very high-level benchmark for your effectiveness working with clients, there are a lot of opportunities for growth hidden in this number.
Your conversion rate is built out of many touchpoints throughout your sales process: How is your initial outreach with the client, your presentation, your closing technique? The conversion rate is a means of highlighting this process and opening it up for improvements.
Your conversion rate can also be influenced by lead type and source. Segmenting out the conversion rate for each can help you identify the leads and product types that you’re more successful with.
Understanding your conversion rate and what influences it will be huge for tracking the growth of your life insurance business. Everyone’s rate will be different, so set a personal goal and work through your process until you get there.
#2: Policy placement ratio
Next is your policy placement ratio. This measures the number of applications submitted against the number of policies you’ve placed. A more nuanced metric than the conversion rate, the policy placement ratio reveals key issues in your underwriting process while also highlighting improvements to the quality of your applications.
The policy placement ratio is a key indicator of sales efficiency and time management. Improving this ratio will ensure you’re taking more time with your clients to find policies that fit their financial situation. Increase this ratio by identifying client qualification improvements.
#3: Average premium size
Third on our list of life insurance metrics is average premium size. This number indicates revenue generated per policy sold. For an agency, this number can be used as a benchmark across the team. The average can be broken down by premium size and product type to evaluate the highest and lowest performing categories.
With this data, you can choose product types that generate more income for you as an agent or your agency as you’re building your business. Trends for your average premium size should be tracked quarterly and annually. Both timelines will give you unique perspectives into trends month-to-month and year-by-year.
Focus on mastering products with higher premium potential and understand when certain products gain more traction throughout the year. Additionally, tracking your average premium size will highlight opportunities to combine multiple policy types to fill in gaps for your clients while creating more revenue for yourself.
#4: Client retention rate
Monitoring the percentage of clients who maintain policies over time is your client retention rate. It is a metric that has a direct impact on long-term profitability and referrals. This number reveals the quality of your client relationship management. Everything from how you engage with clients to the quality of the policies you sell influences the consistency of this rate.
Improving your client retention rate is vital to the growth of your business. According to research from Harvard Business School, increasing customer retention rates by just 5% can grow a company’s profits by 25% to 95%. Opportunities like a structured referral process and annual satisfaction surveys can go a long way in nurturing better agent-client relationships.
#5: Activity metrics (calls, appointments, presentations)
The last one is more of a metric of activity for life insurance agents. It’s the cumulative effort of tracking your calls, appointments and presentations throughout the week. Specifically, tracking calls, appointments and presentations will give you a view of how your sales activities drive results.
Use this metric to create accountability and clear performance expectations. With this knowledge, you can pinpoint the average number of sales activities in a week or month required to achieve your business goals. Beyond that, tracking your weekly and monthly sales activities can identify productivity bottlenecks within your sales funnel.
Once you can see the correlation between activities required compared to conversions, you can better implement strategies designed to improve other metrics like call-to-appointment ratios or cancellation rates. It might even be the simple revelation that a certain day of the week yields more positive results with clients.
Tracking your sales activities will provide clear goalposts for how to improve your life insurance business.
Keep track of your business with Symmetry
These metrics are critical to understanding your performance in life insurance sales while looking for ways to improve. Any one metric contains valuable insights, but all five will make you a better life insurance agent and business owner — whether you’re in the field or growing your agency.
