Newsroom

June 2010: Qualitative data - a powerful tool for managing your Broker/Agency network.

Introduction
Qualitative data can be a powerful tool for managing the performance of your distribution network. Insurance carriers (as with most organizations today) are rich in data but poor in information.

Much of the data is quantitative and almost certainly historical in perspective. When looking at performance - single measures such as Written Premium or New Business tell us who has performed in the past, but are not necessarily predictive in terms of who will perform in the future.

Performance Tracking
So how do we “see” the best performers in our distribution network? Each year, carriers undertake some form of performance review. Numbers are reviewed; questions are asked – and answered based on “human insight” someone decides who are the good, great or poor performers. In other words, a subjective process.

So how do we minimize the subjective evaluation process? The weak point seems to be the asking and answering of questions. If we are able to develop a standard set of questions (each with a series of defined answers) and assign values to each item -- then responses can be valued consistently.

When defining qualitative measures (questions and answers) it is important to determine what factors make your Broker/Agencies successful. For example: Do they have a succession plan? (refer to our separate article on this subject). You also need to determine if questions should be asked at the Broker/Agency level, or by line of business. A Broker/Agency might have a well defined succession plan that will perpetuate your business with them in the Commercial space, but totally destroy all business they do with you in your Personal lines. Asking the question at the Broker/Agency level only, and ignoring the question at the line of business level could provide a response that does not reflect the true risk your business faces on a go-forward basis.

Conclusion
By blending the qualitative measures with an appropriate selection of quantitative measures and weighing each item as to its strategic value, we are able to reach an objective performance score for each Broker/Agency in the distribution network.  Our scorePoint™ solution, with our proprietary Strategic Performance Index (SPI)©, allows you to measure how well the Broker/Agency has performed in the past relative to the entire Broker/Agency population and/or their Peer Groups.

<<< Back to Newsroom Home