Managers use key performance indicators (kpIs) to define and evaluate organizational success. Indicators are used to set strategic and operational goals, to detail the actions needed to meet these goals and to measure outcomes.
In 2014, the RCCAQ and the Centre for Study of Insurance Operations (CSIO) worked together to draw up a profile of brokerage firms in Quebec based on various key performance indicators. The findings of this survey of members were used to establish benchmarks against which brokerages could measure performance improvements, both internally and externally.
Of the brokerages surveyed, many use KPIs to improve client and employee engagement. Experience indicates that actions, not goal-setting, create results. Using KPIs to define strategic goals is but the first step in any effort to gain a competitive edge.
ESTABLISHING A FRAMEWORK FOR ACTION
According to Sean Mulcair of Gradient Solutions, a consultant specialising in growth optimization for insurance companies, client engagement is primary.
“Organizations tend to say, ‘We want 10% growth’,” Mulcair explains. “But they don’t drill down to understand what they need to do. That’s why KPIs are so important.”
These indicators are used to build an operational matrix or equation that outlines required actions. It takes time to detail what needs to be done, Mulcair says. “But when you relate your sales target to your number of employees and number of hours in the day, it’s easier to measure success and determine if your targets are realistic.”
Brokerages should ask questions, such as: How many customer contacts do we need?; How many quotes must we produce?; How many sales must we make?; and, What should be our average premium per sale?
Brokers also need to examine age categories. They need to consider: Are we more relevant with the boomers? Are we less relevant with Millennials?
WORKING WITH CUSTOMERS AND EMPLOYEES
Successful brokers are problem solvers. They offer choice and are accessible. “They must bring value to the equation,” Mulcair says. “Customer engagement is a function of relevance.”
Historically, relevance was based on price competitiveness. Today, brokers must offer creative service levels, including advanced technology and improved connectivity, so customers measure value as well as price. This is how brokers differentiate themselves and justify a client’s decision to work with them.
To bring value, brokers must interact more frequently with clients. According to Mulcair, they should follow up on a claims settlement—the moment of truth—to gauge customer satisfaction. He also suggests they speak to customers upon renewal. “What do you do to thank or acknowledge loyal customers?” he asks.
Yvan Malouin, President of Assurances Arthur Malouin in St-Césaire, who had already been concerned with KPIs, became more interested in the matter due to information sessions at the RCCAQ’s last annual convention. “We’re focused on customer retention,”Malouin says. “We want to increase our average premium per client.”
His brokerage firm already uses tools to measure monthly progress. Information is shared with employees to develop leads. It is also used for coaching. “Planning is no longer a game,” Malouin says confidently. “Our strategic planning was a little vague. Now, it’s more concrete. We have a process in place that ensures everyone is working effectively.”
KPIs ARE A MOBILE TARGET
As business and regulatory conditions evolve, brokers must adapt their KPIs.
Jean Bilodeau, President of RCCAQ’s committee on performance indicators and President of Bilodeau Couture Assurances in Chicoutimi, has used KPIs since 2009. His focus, however, has changed over time. “In the past, we grew through acquisition. At present, we prioritize human resources,” he says.
Employee engagement became a concern during a period of rapid turnover. “We had to focus on staff reten-tion,” Bilodeau says. “We reorganized our HR function to better suit individual needs and career aspirations.” Bilodeau Couture Assurances offers skills training as well as telework options for employees who prefer to work from home.
Every two years, an outside consultant surveys staff members on their levels of satisfaction, including work-life balance. “From an operational standpoint, the situation is evolving and our strategic planning has evolved with it. The results have been rewarding and very worthwhile,” Bilodeau exclaims.
Employee engagement is a huge issue for most brokerages. “There are a lot of opportunities in this area because what brokerages are essentially selling is employees’ enthusiasm,” Mulcair says. “Unhappy employees impact issues around retention, growth and those affecting close rates. They directly impact revenues and profitability.”
RCCAQ PROMOTES KPIs
To stay competitive and profitable, brokerage firms need to adopt new management practices. To that end, after identifying the key indicators enabling members to gauge their business performance effectively, the RCCAQ and the CSIO joined forces in May 2014 to conduct a survey of over 100 firms on various financial, technological and HR aspects of their operations.
Designed to outline the situation facing Quebec brokerage firms, the survey also served to collect benchmark data that will enable members to measure and compare their performance year after year. The survey findings were communicated to the participants and are now available online (for members only) on the RCCAQ’s website.
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