Insurance

KPI
Encyclopedia
A Comprehensive Collection
of KPI Definitions

What's Inside?
1. Insurance KPI Definitions
(More than 100)
2. Insurance Organizational
Area Definitions

2019 Version
Table of Contents
Insurance KPI Encyclopedia

Insurance Metric Definitions

Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Back Office Operations
Claims Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
New Business Processing. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Policyholder Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Payments & Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Lines of Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Agency Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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Insurance
Insurance Insurance is a means to manage a
contingent loss through which responsibility
Back Office Operations for a risk is transferred to another party
in exchange for payment before the loss.
The cost of insurance is based upon the
Lines of Business insurance company’s pooling of similar risks,
occurrences that can be estimated using
Agency Operations statistical modeling (actuarial analysis). An
insurance company earns revenue from
premiums, as well as the investment of those
premiums in various financial instruments/
markets. Insurance can be purchased by
individuals for life, health, property and
liability losses. Corporations purchase
insurance to cover liability, property, business
and executive health and life risks. Insurance
can be purchased directly from a company,
through “captive” agents working for a single
firm or through independent insurance
agents who sell products from multiple
insurance providers.

2
Insurance
Insurance KPI Encyclopedia
Cost
• Combined Ratio – Combined Ratio is the sum of loss
ratio (claims paid out divided by premium earned; referred
to as "Medical Loss Ratio" for health insurance providers)
and expense ratio (cost of sales, underwriting and
customer service divided by premium earned).
• Expense Ratio – The total operating expense incurred by
the insurer (NOT including claims paid out) divided by the
total amount of premium earned over the same period of
time, as a percentage.
• Total Expense: Claims, Benefits and Operations –
The total benefits and claims paid out to policyholders,
plus total operating expenses incurred by the insurance
firm over a certain period of time.
• Combined Ratio: Commercial Lines – The sum of
the loss ratio (claims paid out divided by the premium
earned) and expense ratio (cost of sales, underwriting and
customer service divided by the premium earned) incurred
over the same period of time for commercial insurance
products only, as a percentage.
• Combined Ratio: Personal Lines – The sum of the loss
ratio (claims paid out divided by the premium earned) and
expense ratio (cost of sales, underwriting and customer
service divided by the premium earned) incurred over the
same period of time for personal insurance products only,
as a percentage.
• Loss Ratio – The total amount of claims paid out to
policyholders divided by total premium earned over the
same period of time, as a percentage.
Organizational
• Employees per $100M of Total Premium
Written – The total number of employees working for the
company divided by each $100 million in gross premiums
written.
• Management Levels: Insurance – The total number
of management levels, or layers, within the insurance
company.
• Insurance Policyholders per Employee –
The total number of active members/policyholders divided
by the total number of company-wide employees. A
single policyholder may hold multiple insurance policies
(life, auto, home) and have multiple insured individuals
(sometimes referred to as "riders") tied to those policies.
• Revenue per Insurance Policyholder – The total
revenue earned by the company divided by the total
number of active policyholders.
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Organizational (Cont.)
• AUM per Investments Employee – The total value of
assets owned by the company divided by the total number
of global investment employees.
• Investments Headcount Ratio – The number of
company-wide, full-time equivalent employees (FTEs)
divided by the total number of Investment function
employees.
Productivity
• Policies and Certificates In-Force per Insurance
Agent – The total number of active insurance policies and
certificates (proof of insurance) managed by the insurance
firm at a certain point in time, divided by the number of
agents (captive & independent) selling the firm's products.
• Policies In-Force per Employee – The total number of
active insurance policies (across all insurance products/
lines) managed by the insurance firm at a certain point in
time divided by the number of company-wide employees
working for the firm.
Revenue
• Percentage of Revenue from Operations –
The percentage of total revenue earned directly through
company's operations, rather than sale of investments
or assets.
• Gross Premiums Written – The total written premium
for the insurance firm over a certain period of time, which
includes total premium to be paid by policyholders before
ceded reinsurance fees and commissions are subtracted.
• Gross Premiums Written Plus Policy Fees –
The total written premium plus any policy fees collected
by the insurance firm over a certain period of time.
Gross Premiums Written includes total premium to be
paid by policyholders before ceded reinsurance fees and
commissions are subtracted.
• Net Premiums Written – The total written premium for
the insurance company, minus ceded reinsurance and
commissions, over a certain period of time.
• Gross Premiums Written per Employee – Total written
premium for the insurance firm over a certain period of
time divided by the number of company-wide employees.
Gross Premiums Written includes total premium to be
paid by policyholders before ceded reinsurance fees and
commissions are subtracted.
3
Insurance (Cont.)
Insurance KPI Encyclopedia

Revenue (Cont.) Volume (Cont.)

• Total Revenue per Insurance Agent – The total
revenue generated by the insurance firm (across all
insurance products/lines) over a certain period of time
divided by the number of insurance agents (captive and
independent) selling the firm's products.
• Total Revenue per Captive Insurance Agent –
The total revenue generated by the insurance firm (across
all insurance products/lines) over a certain period of time
divided by the number of captive insurance agents selling
the firm's products.
• Total Revenue: Commercial Lines – Total revenue
generated through the firm's commercial (non-personal)
insurance products over a certain period of time.
• Total Revenue: Personal Lines – Total revenue
generated through the firm's personal insurance products
over a certain period of time.
• Total Premium Earned – Total premiums paid by
policyholders to the insurer over a certain period of time
that apply to the "expired" portion of the insurance policy.
For example, at the end of the sixth month of a twelve
month insurance policy, six months of premium have been
"earned" by the insurer.
• Percentage of Revenue Earned from Investments –
The percentage of total revenue earned by the insurance
group that came from investing premiums in various
financial instruments (bonds, stocks, mortgages, real
estate, etc.).
• Return on Investment (ROI) – Net profit earned as a
percentage of total amount invested. ROI indicates how
successful the insurance group is in investing premiums
earned from policyholders in various financial instruments.
• Policies In-Force: Total – The total number of active
insurance policies (across all insurance products/lines)
managed by the insurance firm at a certain point in time.
• Policies In-Force: Auto – The total number of active
auto insurance policies managed by the insurance firm at
a certain point in time.
• Policies In-Force: Commercial Lines – The total
number of active commercial insurance policies managed
by the insurance firm at a certain point in time.
• Policies In-Force: Fire – The total number of active fire
insurance policies managed by the insurance firm at a
certain point in time.
• Policies In-Force: Health – The total number of active
health insurance policies managed by the insurance firm
at a certain point in time.
• Policies In-Force: Life – The total number of active life
insurance policies managed by the insurance firm at a
certain point in time.
• Policies In-Force: Personal Lines – The total number
of active personal insurance policies managed by the
insurance firm at a certain point in time.
• Assets Under Management (AUM) – The total dollar
value of assets managed by the company at a certain
point in time.

Volume
• Number of Policyholders – The total number of active
policyholders managed by the insurance company at
a certain point in time. A single policyholder may hold
multiple insurance policies (life, auto, home) and have
multiple insured individuals (sometimes referred to as
"riders") tied to those policies.
• Total Volume: Policies and Certificates
In-Force – The total number of active insurance policies
and certificates (proof of insurance) managed by the
insurance firm at a certain point in time.

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Claims Processing
Insurance
Back Office Operations
• Claims Processing
• New Business Processing
• Policyholder Services
• Payments & Commissions
Lines of Business
Agency Operations
5
The Claims Processing function is tasked
with examining and processing insurance
claims, paper and/or electronic. Processors
determine whether to return, pend, deny
or pay claims within the client’s policy
guidelines and determine steps necessary for
adjudication. In addition, claims processing
compares claim applications and/or provider
statements with policy files and other records
to evaluate completeness and validity of a
claim.
Claims Processing
Insurance KPI Encyclopedia
Cost
• Change in Number of New Claims – Total number
of claims for a given period of time divided by the
number of claims for a previous given period of time,
as a percentage.
• Unit Cost: Claim Processing – The total cost of
processing claims divided by the total number of claims
processed over a certain period of time.
• Unit Cost: Claim Processing (Back Office) – The total
back office cost of processing claims divided by the total
number of claims processed over a certain period of time.
• Unit Cost: Claim Processing (Front Office) – The total
front office cost of processing claims divided by the total
number of claims processed over a certain period of time.
• Claims Expense by Product – Total expense related to
claims transactions during the year. They can include life
insurance, disability, dental, health, property/casualty and
so forth.
• Claims Ratio – The total amount of claims paid out to
policyholders by the insurance company as a percentage
of total premium earned over the same time period. Also
known as Loss Ratio.
• Electronic Claims Payments – Yes/no metric indicating
whether the insurance company currently pays claims out
to policyholders via electronic funds transfer.
• Unit Cost: Disbursement – The total cost of
each disbursement divided by the total number of
disbursements processed over a certain period of time.
Organizational
• Claims Employees per 1,000 Reported Claims –
The total number of claims processing and servicing
employees working for the company, per 1,000 reported
insurance claims.
• Claims Headcount Ratio – The total number of
company-wide, full-time equivalent employees (FTEs)
divided by the number of claims employees working for
the company.
Productivity
• Claims Processed per Claims Employee – The total
amount of claims processed over a certain period of
time divided by the total number of claims processing
employees.
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Productivity (Cont.)
• Adjustments per Employee – Number of claims
adjustments completed over a certain period of time
divided by the number of employees processing
adjustments.
• Percentage of Claims Completed Within 15
Days – The total number of claims processed within 15
days after receiving the claim divided by the total
number of claims processed over the same period of
time, as a percentage.
• Percentage of Claims Completed Within 16-30
Days – The total number of claims processed within 16
to 30 days after receiving the claim divided by the total
number of claims processed over the same period of time,
as a percentage.
• Percentage of Claims Completed Within 31-45
Days – The total number of claims processed within 31
to 45 days after receiving the claim divided by the total
number of claims processed over the same period of time,
as a percentage.
• Percentage of Claims Completed Within 46-60
Days – The total number of claims processed within 45
to 60 days after receiving the claim divided by the total
number of claims processed over the same period of time,
as a percentage.
• Percentage of Claims Completed Within 60+
Days – The total number of claims processed 60 or
more days after receiving the claim divided by the total
number of claims processed over the same period of
time, as a percentage.
Quality
• Claims Closure Rate – The number of claims that
have been closed out (paid or denied) and made inactive
divided by the total number of claims received over a
certain period of time, as a percentage.
• Cycle Time: Claims Settlement – The number of
business days required to settle an insurance claim, from
the time the claim is reported up until it is paid out.
• Claim Error Rate – Percentage of claims processed with
errors that require correction.
• Cycle Time: Dividend to Pay Premium – The number
of business days required to process a dividend, from the
time the dividend is received in the home office until a
check is mailed.
6
Claims Processing (Cont.)
Insurance KPI Encyclopedia
Quality (Cont.)
• Premium Payment via Credit Card – Yes/no metric
indicating whether premiums can be paid via credit cards.
• SLA Adherence: Claim – Percentage of claim checks
mailed in the time specified within the company's service
level agreement (SLA).
• SLA Adherence: Disbursements – Percentage of
participant disbursements processed in the time specified
within the company's service level agreement.
• SLA Adherence: Dividend to Pay Premium –
Percentage of dividend to pay premium confirmations/
acknowledgements mailed within the time specified within
the company's service level agreement (SLA).
• SLA Claim Cycle Time – Number of calendar days
within which a claim check should be mailed as defined by
the company's service level agreement (SLA).
• SLA Disbursement Cycle Time – Number of calendar
days within which a participant disbursement should be
processed as defined by the company's service level
agreement (SLA).
• Claims Auto-Adjudication Rate – The total number
of claims that are automatically adjudicated (no need for
manual intervention) divided by the total number of claims
adjudicated (manual and auto) over the same period of
time, as a percentage.
• Claims Denial Rate – The total number of claims
that are denied divided by the total number of claims
processed over the same period of time, as a percentage.
• Percentage of Claims Processed
Electronically – The number of claims received by the
insurer that are submitted and processed electronically
with little or no manual effort divided by the total
number of claims received over the same period of time,
as a percentage.
• Percentage of Claims Requiring Manual
Resolution – The number of incoming claims from
plan members that are removed from the general claims
adjudication process for manual resolution due to missing,
erroneous or questionable data divided by the total
number of incoming claims from plan members over the
same period of time, as a percentage.
• Cycle Time: Claim Payment Remittance –
The number of business days required to complete
payment following the receipt of a claim.
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Service
• Cycle Time: Initial Customer Contact – The number of
business days for the company to respond to a customer
that has reported an event that incurred a loss, from the
time when the damage is reported until the customer is
contacted for the first time.
• Cycle Time: Repair Completion – The number of
business days for the company to complete the repairs
on a reported loss, from the time when the damage is
reported until the customer accepts the repairs performed.
• Cycle Time: Initial Damage Inspection – The number
of business days for the company to perform an initial
inspection on a reported loss, from the time when the
damage is reported until the initial inspection takes place.
• Electronic Fund Transfer Rate – The total number
of claims payments processed through electronic fund
transfers divided by the total number of payments
processed over the same period of time, as a percentage.
• Claims First Pass Resolution Rate – The total number
of claims resolved on the initial submission divided by the
total number of claims resolved over the same period of
time, as a percentage.
• Percent of Claims Requiring Rework – The total
number of claims processed that require back-end
reworking divided the total number of claims processed
over the same period of time, as a percent.
Volume
• Claims by Product Line – Total number of claims for
certain types of products during a year. They can include
life insurance, disability, dental, health, property/casualty
and so forth.
• Total Volume: Claims – Total number of claims received
(segmented by product line) over a certain period of time.
7
New Business
Processing
Insurance
Back Office Operations
• Claims Processing
• New Business Processing
• Policyholder Services
• Payments & Commissions
Lines of Business
Agency Operations
8
The New Business Processing function is
responsible for ‘onboarding’ new insurance
policyholders. They collect the requisite
information, pass that information to the
appropriate underwriting and application
processing staff members (based on
application type, language requirements
and product knowledge) to assess the
appropriate premium and coverage levels,
then communicate options and premium/
deductible structures to the prospective
policyholder.
New Business Processing
Insurance KPI Encyclopedia
Cost
• Underwriting Expense Ratio – Total expense incurred
by the Underwriting function over a given time period
divided by the total amount of premium earned over the
same time period.
• Unit Cost: Application Processing – The total cost
of processing insurance applications divided by the total
number of applications processed over a certain period
of time.
• Unit Cost: Application Processing (Back
Office) – The total back office cost of processing
insurance applications divided by the total number of
applications processed over a certain period of time.
• Unit Cost: Application Processing (Front
Office) – The total front office cost of processing
insurance applications divided by the total number of
applications processed over a certain period of time.
• Group Case Installation Expense – Total cost of
installing group cases divided by the total number of
group cases installed.
• Processing Expense per Application – The total
expense incurred by the company divided by the total
number of insurance applications processed.
• Unit Cost: New Business Application – The total
cost of processing new business applications,excluding
commissions and assigned risk-related expenses,
divided by the total number of new business applications
processed over a certain period of time.
Heacount
• Actuarial Headcount Ratio – The number of company-
wide, full-time equivalent employees (FTEs) divided by the
total number of actuarial employees.
Productivity
• Total Premium Written per Underwriting
Employee – The total amount of premiums written over
a certain period of time divided by the total number of
Underwriting employees.
• New Accounts Opened per New Business
Employee – The total amount of new accounts opened
over a certain period of time divided by the total number of
employees opening new accounts.
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Productivity (Cont.)
• New Policies per Agent – The average number of new
insurance policies onboarded by the insurance group, by
product line (i.e., Life, P&C, etc.), over a certain period
of time divided by the total number of agent (captive or
independent) employees.
• Policies Issued per Month – The total number of
policies issued per calendar month.
• Underwriter Quota – Yes/no metric indicating whether
underwriters are required to review a specific number of
new applications per week.
Quality
• Cycle Time: Underwriting – The number of business
days required to perform an underwriting final action, from
the time the application is received until the decision has
been made.
• Cycle Time: New Business Processing – The number
of business days required to mail a new customer's first
bill, from the receipt of the original insurance application
until the initial bill is mailed to the policyholder.
• Percentage of Applications Approved – The number
of applications submitted by potential policyholders
that are approved and paid (first month's premium)
divided by the total number of applications submitted by
potential policyholders over a certain period of time, as a
percentage.
• Percentage of Insurance Applications Received
Electronically – The number of new applications that
are received by the company through the internet divided
by the total number of new applications received by the
company, as a percentage.
• Application Wastage Rate – The number of insurance
applications received that were not approved and did not
pay the first month's premium (i.e., incomplete or denied
applications) divided by the total number of insurance
applications received over a certain period of time, as a
percentage.
• Cycle Time: Actuarial Analysis – The number of
business days required to complete an actuarial analysis/
pricing model, from the time the necessary information is
gathered until the analysis is complete.
• Cycle Time: Actuarial Response – The number of
business days required to respond to an actuarial
request, from the time the request is received until a
response is sent out.
9
New Business Processing (Cont.)
Insurance KPI Encyclopedia
Quality (Cont.)
• Applications by Product Line – Percentage of new
applications received by product type such as life,
disability, dental, health, property/casualty and so forth.
• Automatic Updating of Databases – Yes/no metric
indicating whether the creation of new accounts
automatically updates all other databases.
• Cycle Time: Application Mail – The average number of
day required to acquire an application, from the time the
application is mailed until the application is received.
• Cycle Time: Coverage Offer – The average number
of days required to process a coverage offer, from the
time the offer is given and accepted until when the
insurance is approved.
• Cycle Time: Group Contract – The average number of
days required to process a group contract, from the time
the group contract proposal in approved until the group
contract is mailed.
• Cycle Time: Group ID Cards – The average number
of days required to process group ID cards, from the time
the insurance proposal is accepted until the group ID
cards are mailed.
• Cycle Time: Group Proposal – The average number of
days required to process a group proposal, from the time
the group proposal is created until the approval of the
group proposal.
• Cycle Time: Issue Case – Average number of days
required to issue a case, from the time the case is
approved by the underwriter until policy generation.
• Cycle Time: Management Reporting – The average
number of days required to complete a management
report, from the time all necessary information is gathered
until the management report is completed.
• Cycle Time: Pending Requirement – The average
amount of time required to process a pending requirement,
from the time the first underwriting review is completed until
the receipt of the final required information.
• Necessary Duplicate Database Entries – Number of
times the same information must be entered to establish a
new account.
• New Account Feedback – Yes/no metric indicating
whether any form of external or internal feedback about
the new account process is solicited.
• Number of New Business Forms – Number of distinct
forms used during the new account process.
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Quality (Cont.)
• Pending New Business Case Personnel – Yes/no
metric indicating whether a specific area/department/
desk/person is in place with the sole responsibility to
provide status on pending new business cases.
• Percentage of Automated Application
Screening – Percentage of new business applications
screened by an automated system.
• Percentage of New Accounts with Insufficient
Documents – Percentage of new accounts opened with
insufficient documentation.
• SLA Adherence: Application Mail – Percentage of
applications received within the time specified within the
company's service level agreement.
• SLA Adherence: Coverage Offer – Percentage of offers
accepted and approved for issue within the time specified
within the company's service level agreement (SLA).
• SLA Adherence: Group Contract – Percentage of
group contracts mailed within the time specified by the
company's service level agreement (SLA).
• SLA Adherence: Group ID Card – Percentage of group
identification cards mailed within the time specified within
the company's service level agreement (SLA).
• SLA Adherence: Group Proposal – Percentage of
group proposals delivered to the producer within the
time specified within the company's service level
agreement (SLA).
• SLA Adherence: Issue Case – Percentage of policies
generated within the time specified within the company's
service level agreements (SLA).
• SLA Adherence: New Business – Percentage of first
bills mailed within the time specified by the company's
service level agreement.
• SLA Adherence: Pending Requirement –
Percentage of final pending requirements received within
the time specified within the company's service level
agreement (SLA).
• SLA Adherence: Underwriter Reviews –
Percentage of underwriting reviews that occur within the
standard cycle time (SLA).
• SLA Adherence: Underwriting Decisions –
Percentage of underwriting decisions made within the
time specified within the company's service level
agreement (SLA).
10
New Business Processing (Cont.)
Insurance KPI Encyclopedia

Quality (Cont.) Revenue

• SLA Application Mail Cycle Time – Number of
calendar days within which an application should be
received as defined by the company's service level
agreement (SLA).
• SLA Coverage Offer Cycle Time – Number of calendar
days within which the offer should be accepted and
approved for issue as defined by the company's service
level agreement (SLA).
• SLA Group Contract Cycle Time – Number of calendar
days within which a group contract should be mailed as
defined by the company's service level agreement (SLA).
• SLA Group ID Card Cycle Time – Number of calendar
days within which a group identification card should
be mailed as defined by the company's service level
agreement (SLA).
• SLA Group Proposal Cycle Time – Number of calendar
days within which a group proposal should be delivered
to the producer as defined by the company's service level
agreement (SLA).
• SLA Issue Case Cycle Time – Number of calendar days
within which the policy should be generated as defined by
the company's service level agreement (SLA).
• SLA New Business Cycle Time – Number of business
days within which the first bill should be mailed as defined
by the company's service level agreement.
• SLA Pending Requirement Cycle Time – Number of
calendar days within which the final pending requirement
should be received as defined by the company's service
level agreement (SLA).
• SLA Time to Underwriter – Number of calendar days
within which the first underwriting review should occur as
defined by the company's service level agreement (SLA).
• SLA Underwriting Cycle Time – Number of business
days within which the underwriting decision should
be made as defined by the company's service level
agreement (SLA).
• Cycle Time: Application to Underwriting – The number
of business days required to start the underwriting review
process, from the receipt of the application in the home
office until the first underwriting review.
• Underwriting Applications Received per
Month – Average number of underwriting applications
received per calendar month.
• Underwriting Automation Rate – The percentage
of applications that are underwritten by an automated
system, requiring little or no manual work.
• Percentage of Premium Written Through Direct
Channels – The percentage of premium written over a
certain period of time that is generated through direct
channels (internet, telesales).
• Percentage of Premium Written Through Agency
Channels – The percentage of premium written, per year,
that is generated by captive or independent agents (versus
through direct channels).
Service
• Cycle Time: New Member Enrollment – The number
of business days required to enroll a new member or
policyholder into an insurance plan, from the point-of-sale
until the new member is enrolled. Includes both manual
and electronic enrollments.
Volume
• Underwriting Approval Rate – Total approved final
actions, or application approvals, divided by the total final
actions taken by the underwriting function over a certain
period of time, as a percentage.
• Underwriting Declination Rate – Total declined final
actions, or application rejections, divided by the total final
actions taken by the underwriting function over a certain
period of time, as a percentage.
• Underwriting Incomplete Application Rate –
Total incomplete final actions, or incomplete applications,
divided by the total final actions taken by the underwriting
function over a certain period of time, as a percentage.
• Postponed Final Actions as a Percentage of Total
Final Actions – Total postponed final actions, or
applications postponed, divided by the total final actions
taken by the underwriting function over a certain period of
time, as a percentage.
• Total Final Actions – The total number of final actions,
or applications being approved or declined, made by
the underwriter.
• Withdrawn Final Actions as a Percentage of
Total Final Actions – Total withdrawn final actions, or
applications not being approved or declined, divided by the
total final actions taken by the underwriting function over a
certain period of time, as a percentage.

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Policyholder
Services
Insurance
Back Office Operations
• Claims Processing
• New Business Processing
• Policyholder Services
• Payments & Commissions
Lines of Business
Agency Operations
12
The Policyholder Services, or In-force
Customer Service, function is tasked with
serving as the customer's reference point
for all questions and needs concerning
the policyholder's insurance policy and its
related products. This function provides
personal service support to internal and
external customers for all areas within
and outside the company. Additional tasks
involve payment collection, offering advice
on various insurance products or services,
policy renewals, and providing accurate
responses to other policyholders, providers
and employee representatives as needed
for issue resolution. High quality customer
service is a key differentiator in the hyper-
competitive insurance industry.
Policyholder Services
Insurance KPI Encyclopedia
Cost
• Policyholder Services Expense per
Transaction – The total policyholder services (or in-
force customer service) expense over a given period of
time divided by the total number of transactions
performed by the Policyholder Services Group over the
same period of time.
• Policyholder Services Expense per Policy
In-Force – The total policyholder services (or in-force
customer service) expense over a given period of time
divided by the total number of enforce policies in the same
period of time.
• Group Service Expense – Total cost of in-force group
policies (e.g., maintenance costs for all cases or accounts)
divided by the total number of in-force group policies
under management.
• Insurance Reporting Expense Ratio – Total expense
incurred by the insurance reporting function over a given
time period divided by the total amount of premium earned
over the same time period.
• Unit Cost: Policy Change – Total cost associated with
processing policy change transactions divided by the
number of policy change transactions processed over a
certain period of time.
Organizational
• Support Staff per Direct Sales Employee –
The number of support employees, including administrative
support, research, production, etc. divided by the total
number of direct sales representative employees.
• Total Headcount: Direct Sales
Representatives – Number of direct sales
representatives working for the company.
• Total Headcount: In-Force Customer Service
Representatives – The total number of in-force customer
service representatives working for the company.
• Total Headcount: Reinsurance – Total number of
reinsurance employees working for the company.
• Total Headcount: Telemarketers – Number of
telemarketers working for the company.
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Productivity
• Number of Management Reports – Number of
management reports produced in various frequencies.
• Policyholders per Case Manager – The total number
of policyholders (in-force customers) divided by the total
number of case management employee working for the
insurance company.
• Policyholders per Certified Actuarial – The number
of insurance policyholders served by the company over
a certain period of time divided by the total number of
certified (SOA, CAS, etc.) actuarial staff members working
for the company.
• Reinsurance Revenue per Reinsurance
Employee – The total revenue obtained by the company
divided by the total number of reinsurance employees.
Quality
• Complaint Tracking – Yes/no metric indicating whether
the firm currently has a formal approach or system to
track complaints for their products.
• Customer Online Account Updates – Yes/no metric
indicating whether customers are given direct access to
their online accounts to perform their own updates.
• Customer Service Days – The number of days per week
on which customer service representatives are available.
• Customer Service Hours – The number of hours
per day during which customer service representatives
are available.
• Cycle Time: Address Change – The number of
business days required to change an employees
address, from the time the request is made until the
change is finalized.
• Cycle Time: Assignment – The number of business
days required to process an assignment request, from
the time the request is made until the request is
confirmed/acknowledged.
• Cycle Time: Beneficiary Change – The number of
business days required to receive a request to change a
beneficiary, from the time the request is received until a
confirmation/acknowledgment is sent.
• Cycle Time: Cash Dividend – The number of business
days required to mail cash dividends, from the time cash
dividends are received in the home office until when the
checks are mailed.
13
Policyholder Services (Cont.)
Insurance KPI Encyclopedia
Quality (Cont.)
• Cycle Time: Cash Surrender – The number of business
days required to mail a cash surrender, from the time
cash surrender request is received in the home office until
when the check is mailed.
• Cycle Time: Change of Dividend Option – The number
of business days required to change dividend options,
from the time the dividend option change request is
received until a confirmation/acknowledgment is given.
• Cycle Time: Financial Reporting – The number of
business days required to complete a financial report,
from the time all necessary information is gathered until
the report is completed.
• Cycle Time: Full-Term Conversion – The number of
business days required to process a full-term conversion,
from the time the full-term conversion request is received
until the confirmation/acknowledgment is mailed.
• Cycle Time: Group Contract – The number of business
days required to process a group contract, from the time
the group contract proposal in approved until the group
contract is mailed.
• Cycle Time: Group ID Cards – The number of business
days required to process group ID cards, from the time the
insurance proposal is accepted until the group ID cards
are mailed.
• Cycle Time: Group Proposal – The number of business
days required to process a group proposal, from the time
the group proposal is created until the approval of the
group proposal.
• Cycle Time: Mode Change – The number of business
days required to process a mode (frequency of payment)
change, from the time the mode change request is
received until a confirmation/acknowledgment is mailed.
• Cycle Time: Ownership Change – The number of
business days required to process an ownership change
request, from the time the ownership change request was
received until a confirmation/acknowledgment is mailed.
• Cycle Time: Partial-Term Conversion – The number
of business days required to process a partial-term
conversion, from the time the partial-term conversion
request is received until a confirmation/acknowledgment
is mailed.
• Cycle Time: Plan Amendment – The number of
business days required to process a plan amendment,
from the time a plan amendment request is received until
the charge appears on the system.
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Quality (Cont.)
• Cycle Time: Policy Change – The number of business
days required to process a policy change, from the time
the policy change request is received until a confirmation/
acknowledgement is mailed.
• Cycle Time: Policyholder Correspondence –
The number of business days required to respond to a
policyholder correspondence, from the time the policyholder
correspondence is received until a response is mailed.
• Cycle Time: Premium Application – The number of
business days required to process a premium application,
from the time the premium application is received until the
policy value is credited.
• Cycle Time: Reinstatement – The number of business
days required to process a reinstatement, from the time
the reinstatement request is received until a confirmation/
acknowledgment is mailed.
• Number of Financial Reports – The number of financial
reports produced in various frequencies.
• Organizational Structure: In-Force Customer
Service – Yes/no metric indicating whether the In-Force
Customer Service function is centralized (all employees in
a single location) or decentralized.
• Sales Cross-Selling – Yes/no metric indicating whether
the sales function uses the in-force customer database to
help sell additional products and services.
• SLA Address Change Cycle Time – The number
of calendar days within which an address change
confirmation/acknowledgement should be mailed as
defined by the company's service level agreement (SLA).
• SLA Adherence: Policy Change – Percentage of
policy change confirmations/acknowledgements mailed
in the time specified within the company's service level
agreement (SLA).
• SLA Adherence: Address Change – Percentage of
address changes confirmations/acknowledgements mailed
within the time specified within the company's service
level agreement (SLA).
• SLA Adherence: Assignment – Percentage of
assignment confirmations/acknowledgements mailed
with the time specified within the company's service
level agreement.
• SLA Adherence: Beneficiary Change –
Percentage of beneficiary change confirmations/
acknowledgements mailed within the time specified within
the service level agreement (SLA).
14
Policyholder Services (Cont.)
Insurance KPI Encyclopedia
Quality (Cont.)
• SLA Adherence: Cash Dividend – Percentage of cash
dividend checks mailed within the time specified in the
company's service level agreement (SLA).
• SLA Adherence: Cash Surrender – Percentage of cash
surrender checks mailed in the time specified within the
company's service level agreement (SLA).
• SLA Adherence: Change of Dividend
Option – Percentage of change of dividend option
confirmations/acknowledgements mailed within the
time specified within the company's service level
agreement (SLA).
• SLA Adherence: Claim – Percentage of claim checks
mailed in the time specified within the company's service
level agreement (SLA).
• SLA Adherence: Financial Reporting – Percentage of
financial reports completed in the time specified within the
company's service level agreement.
• SLA Adherence: Full-Term Conversion –
Percentage of full-term conversion confirmations/
acknowledgements mailed in the time specified within the
company's service level agreement (SLA).
• SLA Adherence: Management
Reporting – Percentage of management reports
completed in the time specified within the company's
service level agreement (SLA).
• SLA Adherence: Mode Change – Percentage of
mode (frequency of payment) change confirmations/
acknowledgements mailed within the time specified within
the company's service level agreement (SLA).
• SLA Adherence: Ownership Change –
Percentage of onwership change confirmations/
acknowledgements mailed within the time specified within
the company's service level agreement (SLA).
• SLA Adherence: Partial-Term
Conversion – Percentage of partial-term conversion
confirmations/acknowledgements mailed in the time
specified within the company's service-level agreement.
• SLA Adherence: Plan Amendment – Percentage of
plan amendments appearing on the system in the time
specified by the company's service level agreement (SLA).
• SLA Adherence: Policyholder
Correspondence – Percentage of policyholder
correspondence mailed in the time specified within the
company's service level agreement (SLA).
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Quality (Cont.)
• SLA Adherence: Premium Application –
Percentage of policies credited in the time specified by the
company's service level agreement (SLA).
• SLA Adherence: Premium Receivable – Percentage of
premium receivables closed within the time specified within
the company's service level agreement (SLA).
• SLA Adherence: Premium Waiver
Processing – Percentage of premium waiver
confirmations/acknowledgements mailed within the time
specified within the company's service level agreement
(SLA).
• SLA Adherence: Reinstatement – Percentage of
reinstatement confirmations/acknowledgements mailed
in the time specified by the company's service level
agreement (SLA).
• SLA Adherence: Remittance – Percentage of
remittances processed within the time specified within the
company's service level agreement (SLA).
• SLA Assignment Cycle Time – The number of
calendar days within which an assignment confirmation/
acknowledgement should be mailed as defined by the
company's service level agreement (SLA).
• SLA Beneficiary Change Cycle Time – The number
of calendar days within which a beneficiary change
confirmation/acknowledgment should be mailed as
defined by the company's service level agreement (SLA).
• SLA Cash Dividend Cycle Time – The number of
calendar days within which a cash dividend check should
be mailed as defined by the company's service level
agreement (SLA).
• SLA Cash Surrender Cycle Time – The number of
calendar days within which a cash surrender check should
be mailed as defined by the company's service level
agreement (SLA).
• SLA Change of Dividend Option Cycle Time –
The number of calendar days within which a change of
dividend option confirmation/acknowledgement should
be mailed as defined by the company's service level
agreement (SLA).
• SLA Claim Cycle Time – The number of calendar days
within which a claim check should be mailed as defined by
the company's service level agreement (SLA).
15
Policyholder Services (Cont.)
Insurance KPI Encyclopedia
Quality (Cont.)
• SLA Dividend to Pay Premium Cycle Time –
The number of calendar days within which a dividend to pay
premium confirmation/acknowledgement should be mailed
as defined by the company's service level agreement (SLA).
• SLA Financial Reporting Cycle Time – The number
of calendar days within which financial reports should
be completed as defined by the company's service level
agreement (SLA).
• SLA Full-Term Conversion Cycle Time – The number
of calendar days within which a full-term conversion
confirmation/acknowledgement should be mailed as
defined by the company's service level agreement (SLA).
• SLA Management Reporting Cycle Time –
The number of calendar days within which management
reports should be completed as defined by the company's
service level agreement (SLA).
• SLA Mode Change Cycle Time – The number of
calendar days within which a mode (frequency of
payment) change confirmation/acknowledgement should
be mailed as defined by the company's service level
agreement (SLA).
• SLA Ownership Change Cycle Time – The number
of calendar days within which an ownership change
confirmation/acknowledgement should be mailed as
defined by the company's service level agreement (SLA).
• SLA Partial-Term Conversion Cycle Time –
The number of calendar days within which a partial-
term conversion confirmation/acknowledgement should
be mailed as defined by the company's service level
agreement (SLA).
• SLA Plan Amendment Cycle Time – The number of
business days within which a plan amendment should
appear on the system as defined by the company's
service level agreement (SLA).
• SLA Policy Change Cycle Time – The number of
calendar days within which a policy charge confirmation/
acknowledgement should be mailed as defined by the
company's service level agreement.
• SLA Policyholder Correspondence Cycle
Time – The number of calendar days within which
policyholder correspondence should be mailed as defined
by the company's service level agreement (SLA).
• SLA Premium Application Cycle Time – The number of
calendar days within which a policy should be credited as
defined by the company's service level agreement (SLA).
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Quality (Cont.)
• SLA Premium Receivable Cycle Time – The number
of calendar days within which a premium receivable
should be closed as defined by the company's service
level agreement (SLA).
• SLA Reinstatement Cycle Time – The number of
calendar days within which a reinstatement confirmation/
acknowledgement should be mailed as defined by the
company's service level agreement (SLA).
• SLA Remittance Cycle Time – The number of calendar
days within which a remittance should be processed as
defined by the company's service level agreement (SLA).
• SLA: Waiver of Premium Cycle Time – The number
of calendar days within which a waiver of premium
confirmation/acknowledgement should be mailed as
defined by the company's service level agreement (SLA).
• Cycle Time: Premium Waiver Processing –
The average number of days required to process a
premium waiver, from the time all necessary information is
gathered until a confirmation/acknowledgment is mailed.
Service
• Cycle Time: Initial Customer Contact – The number of
hours it takes for the company to respond to a customer
that has reported an event that incurred a loss, from the
time when the damage is reported until the customer is
contacted for the first time.
• Cycle Time: Repair Completion – The number of
business days for the company to complete the repairs
on a reported loss, from the time when the damage is
reported until the customer accepts the repairs performed.
• Cycle Time: Initial Damage Inspection – The number
of business days for the company to perform an initial
inspection on a reported loss, from the time when the
damage is reported until the initial inspection takes place.
Volume
• Customer Feedback Frequency – The average
frequency with which feedback is solicited from customers.
16
Payments &
Commissions
Insurance
Back Office Operations
• Claims Processing
• New Business Processing
• Policyholder Services
• Payments & Commissions
Lines of Business
Agency Operations
The Payments & Commissions function
is responsible for collecting customer
premiums, processing salaries and
commissions and distributing any applicable
benefits to insurance agents. Though
commissions are the most common form of
compensation for insurance agents (amounts
depend on the type and amount of insurance
sold as well as whether the transactions are
new policies or renewals), salaries are also
managed and distributed.

17
Payments & Commissions
Insurance KPI Encyclopedia

Quality Quality (Cont.)

• Cycle Time: Premium Receivable – The number of • SLA Premium Receivable Cycle Time – The number
business days required to close a premium receivable of calendar days within which a premium receivable
item, from the time the premium receivable item is should be closed as defined by the company's service
received until its closure. level agreement (SLA).
• Cycle Time: Remittance – The number of business • SLA Remittance Cycle Time – The number of calendar
days required to process a remittance request, from days within which a remittance should be processed as
the time the remittance request is received until a defined by the company's service level agreement (SLA).
confirmation/acknowledgement is mailed.
• SLA Adherence: Cash Dividend – Percentage of cash Service
dividend checks mailed within the time specified in the
company's service level agreement (SLA). • Percentage of Charges Transferred – Percentage of
charges, such as co-insurance, deductibles, or non-
• SLA Adherence: Cash Surrender – Percentage of cash covered services, that are transferred from the primary
surrender checks mailed in the time specified within the insurer to the next responsible party.
company's service level agreement (SLA).
• SLA Adherence: Change of Dividend
Option – Percentage of change of dividend option
confirmations/acknowledgements mailed within the
time specified within the company's service level
agreement (SLA).
• SLA Adherence: Premium Application –
Percentage of policies credited in the time specified by the
company's service level agreement (SLA).
• SLA Adherence: Premium Receivable – Percentage of
premium receivables closed within the time specified within
the company's service level agreement (SLA).
• SLA Adherence: Premium Waiver
Processing – Percentage of premium waiver
confirmations/acknowledgements mailed within the
time specified within the company's service level
agreement (SLA).
• SLA Adherence: Remittance – Percentage of
remittances processed within the time specified within the
company's service level agreement (SLA).
• SLA Change of Dividend Option Cycle Time –
The number of calendar days within which a change of
dividend option confirmation/acknowledgement should
be mailed as defined by the company's service level
agreement (SLA).
• SLA Dividend to Pay Premium Cycle Time –
The number of calendar days within which a dividend to
pay premium confirmation/acknowledgement should be
mailed as defined by the company's service level
agreement (SLA).

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Lines of Business
Insurance
Back Office Operations
Lines of Business
Agency Operations
19
Lines of Business (LOB) refers to specific
products and services offered by insurance
companies to both individual and commercial
clients. Major LOBs typically include
Commercial Insurance, Health Insurance,
Investment Management, Life Insurance,
Property & Casualty Insurance, Reinsurance
and Risk Management. The insurance
agents and back office staff members are
responsible for pricing these products/
services, generating new business and
managing policyholder relationships. LOBs
are supported by back office staff members,
who work to perform non-customer-facing
tasks like claims processing, customer
service support, payment collection, and
policyholder onboarding.
Lines of Business
Insurance KPI Encyclopedia

Cost
• Combined Ratio: Commercial Lines – The sum of
the loss ratio (claims paid out divided by the premium
earned) and expense ratio (cost of sales, underwriting and
customer service divided by the premium earned) incurred
over the same period of time for commercial insurance
products only, as a percentage.
Quality
• Activity Checklist: Reinsurance – Yes/no metric
indicating whether certain reinsurance specific activities
are conducted by the reinsurance agents. They could
include: claims, accounting, billing, legal, quality control,
collection and so forth.
• Organizational Structure: Reinsurance – Yes/no metric
indicating whether the reinsurance function is centralized (all
employees in a single location) or decentralized.
Volume
• Policies In-Force: Auto – The total number of active
auto insurance policies managed by the insurance firm at
a certain point in time.
• Policies In-Force: Commercial Lines – The total
number of active commercial insurance policies managed
by the insurance firm at a certain point in time.
• Policies In-Force: Fire – The total number of active fire
insurance policies managed by the insurance firm at a
certain point in time.
• Policies In-Force: Health – The total number of active
health insurance policies managed by the insurance firm
at a certain point in time.
• Policies In-Force: Life – The total number of active life
insurance policies managed by the insurance firm at a
certain point in time.

Revenue
• Total Revenue: Commercial Lines – Total revenue
generated through the firm's commercial (non-personal)
insurance products over a certain period of time.

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Agency Operations
Insurance
Back Office Operations
Lines of Business
Agency Operations
21
The Insurance Agency Operations function
manages the firm’s network of insurance
agents and brick and mortar branch offices.
Agency operations managers are responsible
for recruiting staff members (sales and
non-sales), ensuring that all agents have
the proper licensing and training to sell
products on the firm’s behalf, distributing
marketing collateral, attracting and educating
potential policyholders and monitoring the
performance of agency offices. As more
potential customers move to the internet
and other direct channels to receive quotes
and complete insurance applications, the
importance of superior customer service,
policyholder retention, effective use of
technology and marketing/advertising reach
for physical agency branch locations has
taken on increased importance.
Agency Operations
Insurance KPI Encyclopedia
Organizational
• Revenue per Insurance Broker – The total revenue
earned by the company divided by the total number of
insurance brokers working for the company.
• Support Staff per Direct Sales Employee –
The number of support employees, including administrative
support, research, production, etc. divided by the total
number of direct sales representative employees.
• Insurance Agent Headcount Ratio – The number of
company-wide, full-time equivalent employees (FTEs)
divided by the total number of insurance agents (captive
and independent) selling the firm's products.
• Captive Insurance Agent Headcount Ratio –
The number of company-wide, full-time equivalent
employees (FTEs) divided by the total number of captive
insurance agents selling the firm's products.
• Number of Independent Insurance Agencies –
The total number of independent insurance agencies selling
the firm's insurance products at a certain point in time.
• Number of Independent Insurance Agencies:
Personal Lines – The total number of independent
insurance agencies selling the firm's personal (non-
commercial) insurance products at a certain point in time.
• Total Headcount: Insurance Agents – The total
number of insurance agents (captive and independent )
selling the firm's products at a certain point in time.
• Total Headcount: Captive Insurance Agents –
The total number of captive insurance agents selling the
firm's products (across all insurance products/lines) at a
certain point in time.
• Total Headcount: Captive Insurance Agents
(Personal Lines) – The total number of captive
insurance agents selling the firm's personal line products
at a certain point in time.
• Total Headcount: Independent Insurance Agents –
The total number of independent (non-captive) insurance
agents selling the firm's products (across all insurance
products/lines) at a certain point in time.
Productivity
• Policies In-Force per Insurance Agent – The total
number of policies in-force divided by the total number of
insurance agents working for the company.
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Productivity (Cont.)
• New Policies per Agent – The average number of new
insurance policies onboarded by the insurance group, by
product line (i.e., Life, P&C, etc.), over a certain period
of time divided by the total number of agent (captive or
independent) employees.
• Policies Issued per Month – The total number of
policies issued per calendar month.
• Policies In-Force per Agent – The total number of
active insurance policies (across all insurance products/
lines) managed by the insurance firm at a certain point
in time divided by the number of agents (captive and
independent) selling the firm's products.
• Policies In-Force per Captive Agent – The total
number of active insurance policies (across all insurance
products/lines) managed by the insurance firm at a certain
point in time divided by the number of captive agents
selling the firm's products.
• Policies In-Force per Independent Agent – The total
number of active insurance policies (across all insurance
products/lines) managed by the insurance firm at a certain
point in time divided by the number of independent (non-
captive) agents selling the firm's products.
• Policies In-Force per Independent Agency – The total
number of active insurance policies (across all insurance
products/lines) managed by the insurance firm at a
certain point in time divided by the number of independent
insurance agencies selling the firm's products.
• Policyholders per Insurance Agent – The total number
of policyholders (in-force customers) divided by the total
number of insurance agents (captive and independent)
selling the firm's products.
• Policyholders per Captive Insurance Agent –
The total number of policyholders (in-force customers)
divided by the total number of captive insurance agents
selling the firm's products.
• Policyholders per Independent Insurance
Agent – The total number of policyholders (in-force
customers) divided by the total number of independent
(non-captive) insurance agents selling the firm's products.
• Gross Premiums Written per Independent
Insurance Agent – The total written premium for the
insurance firm over a certain period of time divided by the
number of independent (non-captive) insurance agents
selling the firm's products. Gross Premiums Written
includes total premium to be paid by policyholders before
ceded reinsurance fees and commissions are subtracted.
22
Agency Operations (Cont.)
Insurance KPI Encyclopedia

Productivity (Cont.) Service

• Gross Premiums Written per Captive Insurance • Agent Visits per Sale – Average number of times a
Agent – The total written premium for the insurance customer is visited by an insurance agent before a sale
firm over a certain period of time divided by the number has been finalized.
of captive insurance agents selling the firm's products.
Gross Premiums Written includes total premium to be
paid by policyholders before ceded reinsurance fees and
commissions are subtracted.
• Gross Premiums Written per Insurance Agent –
The total written premium for the insurance firm over a
certain period of time divided by the number of insurance
agents (captive and independent) selling the firm's
products. Gross Premiums Written includes total premium
to be paid by policyholders before ceded reinsurance fees
and commissions are subtracted.

Revenue
• Percentage of Premium Written Through Agency
Channels – The percentage of premium written, per year,
that is generated by captive or independent agents (versus
through direct channels).
• Net Premiums Written per Independent Insurance
Agency – The total written premium for the insurance
company, minus ceded reinsurance and commissions,
over a certain period of time divided by the number
of independent insurance agencies selling the firm's
products.
• Revenue per Captive Insurance Agent (Personal
Lines) – The total revenue generated through the firm's
personal insurance products over a certain period of time
divided by the number of captive agents selling the firm's
personal (non-commercial) insurance products.
• Revenue per Independent Insurance Agent
(Personal Lines) – The total revenue generated through
the firm's personal insurance products over a certain
period of time divided by the number of independent
(non-captive) agents selling the firm's personal (non-
commercial) insurance products.

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