Key Performance Indicators (KPI) in the Work of an Insurance Agent

Maciej Wir-Konas
June 18, 2024

You already know KPIs are important, but it's not the matter of stating whether KPIs are vital, or not – it's about determining WHICH KPIs are worth tracking, and which are just a waste of time and effort.

This is what saved Amazon in the late 90's. In the late 1990s and early 2000s, Amazon was struggling with profitability despite rapidly growing revenues. The company was investing heavily in expanding its operations and infrastructure, but its costs were outpacing its revenue growth, leading to mounting losses.

To address this issue, Amazon's leadership team identified a critical KPI: the company's gross profit per unit. This metric measured the profitability of each item sold after accounting for the cost of goods sold and shipping expenses.

Amazon was able to make data-driven decisions that improved its profitability, by closely monitoring and optimizing this KPI. 

As a result of these efforts driven by the gross profit per unit KPI, Amazon was able to achieve its first full-year net profit in 2003, after several years of losses.

In this article we'll tell you which KPIs to measure as an insurance agent to strive, and avoid Amazon-like struggle.

Sales KPIs for Insurance Agent

The lifeblood of any insurance agent’s career is sales and revenue. Sales KPIs give you a clear and measurable view of how well you’re attracting new clients and closing deals.

  • New Business Premium: This is the total premium from new business sold in a given period. A direct measure of how much new revenue you’re bringing in and growing your client base.
  • Policies Sold: This simple metric tracks the number of new policies written in a given timeframe. A good indicator of your activity level and sales volume.
  • Closing Ratio: This is the percentage of leads you convert into paying customers. A high closing ratio means you’re good at persuading prospects and closing deals. An average closing rate in insurance is around 55%.
  • Average Policy Size: This KPI calculates the average premium per policy sold. Gives you an idea of the types of policies you’re selling and your ability to upsell or cross sell.
  • Cross Selling/Upselling Rate: This metric tracks the percentage of existing clients who buy additional products or upgrades to their existing policies. How well you’re identifying and meeting the changing needs of your clients.

Why are sales KPIs important?

Sales KPIs are the foundation of an insurance agent’s success. They connect an agent’s actions to their financial results. By tracking these KPIs agents can see their strengths and weaknesses, set realistic goals and measure progress over time. 

For example a low closing ratio might mean you need to work on your sales skills or lead qualification, a high cross-selling rate means you’re building strong relationships and providing value to your clients.

How to Track Sales KPIs?

Most insurance agencies use Customer Relationship Management (CRM), insurance software or sales tracking tools. These insurance solutions automate data collection, track leads and sales activities and provide detailed sales reports. Insurance professionals can also use spreadsheets or manual methods to track their KPIs but this can be time-consuming and error-prone.

Tips for Improvement Sales KPIs

To improve sales KPIs agents can:

  • Refine sales skills: Invest in ongoing training and development to improve communication, negotiation and closing skills.
  • Target specific demographics: Identify niches or demographics where your expertise or product is valuable.
  • Leverage referrals: Encourage happy clients to refer friends and family, which can be a powerful way to get high quality leads.
  • Build relationships: Focus on building trust and rapport with clients to build long term relationships and increase repeat business and referrals.

Customer Focused KPIs

While sales are important, long term success of an insurance agent depends on building strong relationships with clients and providing great insurance service. Customer focused KPIs give you valuable insights into how well you’re building trust, meeting client needs and fostering loyalty.

  • Customer Satisfaction Score (CSAT): This measures how satisfied customers are with the agent’s service, products and overall experience. Typically collected through surveys or feedback forms. High CSAT means customers are happy with the agent’s performance and more likely to stay loyal.
  • Net Promoter Score (NPS): NPS measures customer loyalty and how likely they are to recommend the agent to others. It’s calculated by asking customers how likely they are to recommend the agent on a scale of 0 to 10. Customers who score 9 or 10 are promoters, those who score 6 or below are detractors. NPS is the percentage of promoters minus the percentage of detractors. High NPS means you have a loyal customer base and are generating positive word of mouth. Customer Gauge points that the average NPS for insurance companies in the US is 35.
  • Policy Renewal Rate: This KPI tracks the percentage of policies renewed by existing clients. High renewal rate means customers are happy with the agent’s service and the value of their policies. According to a Bain & Company study increasing customer retention by 5% can increase profits by 25% to 95%.
  • Customer Retention Rate: This measures the percentage of customers who continue their policies with the agent over a given period. High retention rate means strong customer loyalty and positive customer experience.

Financial KPIs

While sales and customer satisfaction are important, an insurance agent’s ultimate success is often measured by their financial performance. Financial KPIs give you a complete view of your book of business, showing profitability, efficiency and long term sustainability.

  • Loss Ratio: This KPI is the percentage of premiums paid out in claims. Lower loss ratio means you’re selecting profitable risks and managing claims well. NAIC report states the direct loss and defense and cost containment (DCC) expense ratio for the P&C industry was 52.27% for the first half of 2023.
  • Expense Ratio: This measures the percentage of premiums used to cover your operating expenses such as salaries, commissions, marketing and administrative costs. Lower expense ratio means greater efficiency and profitability. 
  • Combined Ratio: The combined ratio is the sum of the loss ratio and the expense ratio. It gives you a complete view of your profitability. A combined ratio below 100% means you’re making underwriting profit, above 100% means you’re in underwriting loss.
  • Persistency Rate: This KPI measures how long customers keep their policies in force. Higher persistency rate is a good sign of customer satisfaction and quality of service. According to LIMRA the average persistency rate for life insurance policies in the US is around 80%.

Why are Financial KPIs important?

Financial KPIs are critical for insurance agents to know the financial health of their business. By tracking these metrics insurance agents can see where they can improve profitability, reduce expenses and increase customer retention. 

For instance, a high loss ratio might mean you need to improve risk selection or claims management, a high expense ratio might mean you need to streamline operations or reduce costs.

How to Track Financial KPIs?

Agents can calculate these financial KPIs using data from the insurer’s financial reports and agency management systems. These systems often provide detailed reports on premiums, claims, expenses and policyholder data so agents can track their performance over time.

Tips for improvement

To improve financial KPIs, take care of:

  • Risk selection: Select risks carefully and write policies for individuals or businesses that are less likely to claim.
  • Claims management: Work with clients to file claims promptly and accurately and advocate for fair settlements.
  • Expense control: Look for ways to reduce expenses such as automating tasks, negotiating better rates with vendors and streamlining workflows.
  • Customer retention: Focus on good customer service and build strong relationships with clients to get policy renewals and reduce churn.

Operational KPIs

Operational KPIs give you insights into how well an insurance agent is managing their day-to-day operations. These metrics measure how well an agent is using their time, resources and processes to deliver value to clients and achieve their business goals.

  • Quote-to-Close Ratio: This KPI is the percentage of quotes that result in a closed sale. A high quote-to-close ratio means an insurance agent is converting leads into paying customers. 
  • Average Response Time: This metric measures the time it takes for an agent to respond to customer inquiries or claims. Fast response time is critical for customer satisfaction and can be a key differentiator in a competitive market. A study by the Harvard Business Review found that companies that respond to leads within an hour are seven times more likely to qualify the lead than those that respond even an hour later.
  • Policy Processing Time: This KPI is the time it takes to issue a new policy or process a renewal. A streamlined and efficient policy processing system can improve customer experience and reduce administrative overhead.

Why are operational KPIs important?

Operational KPIs are critical for insurance agents to see inefficiencies, bottlenecks, and areas for improvement in their workflows. By tracking these metrics agents can optimize their processes, increase productivity and deliver better customer experience.

How to Track operational KPIs?

Insurance agents can track operational KPIs using time-tracking tools, automated workflows and analytics dashboards. These insurance tools can help agents monitor their response times, policy processing times and other operational metrics so they can see their performance.

Tips for improvement

To improve operational KPIs:

  • Optimize processes: Remove unnecessary steps or delays in your workflows.
  • Automate repetitive tasks: Use insurance software to automate tasks like data entry, document processing and appointment scheduling.
  • Delegate tasks: Give your team members tasks to do so you can focus on more strategic activities.
  • Invest in technology: Use insurance CRM, insurance software, agency management systems and other digital tools to streamline operations and increase efficiency.

Decerto's Agent Portal: All The Job Done For You

Decerto's Agent Portal provides a powerful insurance software for insurance agents to track and improve their Key Performance Indicators (KPIs) in several ways:

  1. Real-Time Sales Dashboards: The insurance software - Agent Portal - offers customizable dashboards that display key sales metrics in real-time, such as:
    • Policies Sold: Track the number and types of policies sold within specific timeframes.
    • Conversion Rates: Analyze how effectively leads are converted into customers.
    • Revenue Generated: Monitor total revenue earned and identify high-performing products.
    • Commission Earned: Keep track of individual agent commissions for motivation and performance tracking.
  2. Goal Setting and Tracking: Agents can set personal sales goals within the Agent Portal and monitor their progress in real-time. This feature helps maintain focus and motivation while providing a clear picture of performance against targets.
  3. Performance Comparison: The Agent Portal allows insurance agents to compare their performance against team averages or other benchmarks. This insight can identify areas for improvement and highlight successful strategies.
  4. Data-Driven Insights: The Agent Portal's analytics capabilities go beyond simple reporting. Insurance agents can analyze trends, identify patterns, and gain insights into customer behavior. This information can be used to refine sales strategies, personalize offers, and improve customer engagement.
  5. Post-Sales KPI Tracking: The Agent Portal also tracks post-sales KPIs, such as policy renewals, claims ratios, and customer satisfaction levels. This information is crucial for understanding long-term customer value and identifying opportunities for improvement in customer retention.


As the insurance industry evolves KPIs will only become more important. By embracing KPIs and using them to their advantage insurance agents can be successful in the digital revolution. The key is to see KPIs not as a burden, but as a tool to unlock their full potential and achieve their goals.

The future of KPI tracking for insurance agents is looking good with emerging technologies like artificial intelligence (AI) and predictive analytics set to change the way agents measure and improve their performance. The Agent Portal can automate data collection and analysis and provide real-time insights and recommendations to agents. Predictive analytics can forecast future trends and identify potential risks and opportunities so insurance professionals can make proactive decisions.

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