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April 2010: Managing Performance by the Numbers

Introduction
The insurance industry is all about the numbers. Premiums, growth, profitability and new business dollars are all good indicators of how a broker is performing. Raw data will always be the main source for performance metrics.

Performance Tracking
Tracking performance based on a set of metrics is relatively straight forward using spreadsheet technology. The tools are sophisticated and user friendly. However spreadsheet technology still has significant drawbacks:

• Are all users drawing data from the same source and for the same timeline?
• Are the users trending performance, historical and/or budget data?
• If so, how are they building the spreadsheet model to handle changes in the metrics being tracked?
• Are analytics distributed via eMail or saved in a read-only format on a shared network drive?
• Sophisticated models are often built by business users and are not well documented.

Spreadsheets are normally built to support a specific set of assumptions. Changes to the thinking or the business model can require changes to the data feed and the spreadsheet logic. Each change is a potential breaking point that requires time and cost to resolve – as well as credible reliance on the resulting analytics.

Most Business Intelligence solutions have similar drawbacks to those identified above. Business users require a solution that is easy to manage; requires minimal support from IT resources and will allow new business requirements to be rapidly deployed.

Conclusion
‘The numbers’ only provide a part of the performance picture. Qualities you are looking for in a broker are often overlooked, such as succession planning.  Qualitative data is an important consideration for continued success.

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