Drop The Gut — Data Drives Agency Performance

If you want your brokerage agency to scale exponentially, you’ll have to leave your gut at the door.

That’s because data is what helps agencies grow efficiently and quickly – more quickly than relying purely on experience as a guide, according to panelists during the session “How Data is Driving Better Performance and More Business” during the National Association of Independent Life Brokerage Agencies’ virtual conference.

David Libesman, associate vice president, analytics, iPipeline, said companies that are data-driven rather than experience-driven have had a good year despite the historic challenges thrown their way.

“Even with the industry being down about 2.11%, the companies that are actually focused on leveraging data are actually up year on year compared to the industry median,” Libesman said.

Greater efficiency played a role, with e-apps and e-delivery use up significantly this year. However, agencies that have tracked not only their own performance, but have also compared it to industry data, have been able to achieve substantial growth.

A key to this improvement is keeping a close eye on placement ratio and cycle time, said Dan Stanley, vice president of operations, Lion Street.

“I think what it really boils down to is cycle times,” Stanley said. “And I'll just say that over and over again, we, we look at cycle times as the primary indicator for placement ratios. We manage it, and we take it very seriously.”

Lion Street closely tracks three levels in cycle times -- agent, case management and insurance carrier.

“The goal is really to eliminate buyer fatigue,” Stanley said. “In order to do it, we've got to shorten the cycle time.”

The agency sets internal and external metrics, such as individual goals for case managers and underwriters, and even carriers, to create optimum behavior to cut the cycle time.

As agency managers analyze the data, they compare their performance to other agencies and ask questions such as whether Lion Street has the right customers. Then they use the data to improve the cycle time, and compensation.

“We can really partner with our insurance carriers to drive up profitability because at the end of the day, it's a collective experience,” Stanley said. “It's between the producer group, the carriers and the clients - we're all working to close that that lifecycle of the case.”

Probably the overall benefit of using data consistently is transparency and accountability. The agency can examine the process throughout the cycle to identify the kinks in the pipeline.

“I look at a particular case manager,” Stanley said. “I'll then head into other areas of the data that the system provides to find out where are they finding roadblocks. Is it a pending delivery? Is it a customer issue with the agency versus a carrier issue? All those things matter.”

Dollars And Sense

Of course, the number that really counts for the bottom line is premium. And that is a key metric that Gen3 Advisor Group keeps an eye on, said the agency’s president and CEO, Mac Chrystal.

Chrystal, who admits to being a little bit of a data freak, said he goes over each day’s data every night. And the close attention paid off handsomely, even in the year of COVID-19, with higher placement ratios and a 259% increase in premium year over year.

The key is putting the analytics into action, he said.

“We're bringing it into meetings with executive leadership,” Chrystal said. “We're bringing into meetings with specific case managers. And it just provides a new level of accountability on a daily basis, that has allowed us to grow exponentially – and a lot faster than I even imagined.”

The close, daily attention helps the agency fix problems immediately.

“The numbers don't lie,” he said. “As long as you're putting good data in, you're going to be able to pull good data out. And visualizing reports is good for everybody. Whether it's the sales team seeing premium numbers on a weekly basis, or it's operations looking at cycle times and placement ratios.”

Steven A. Morelli is editor-in-chief for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers and magazines. He was also vice president of communications for an insurance agents’ association. Steve can be reached at [email protected].

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Steven A. Morelli is a contributing editor for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers and magazines. He was also vice president of communications for an insurance agents’ association. Steve can be reached at [email protected].