Winning Results: Elevating Performance to Extraordinary

September 2024

The biggest sporting event on earth — the Olympics. A global tradition, most recently in Paris, where elite athletes compete to be the best of the best. These passion-driven competitors are measured, judged and scored in a multitude of ways. Any combination of various components, such as speed, distance, difficulty, endurance, points and execution, factor into the equation and will determine who takes home the gold. Whether an individual or team competition, measuring performance is core to the spirit and outcomes of the games. It all comes down to who has the best scores.

Measuring Productivity

There are synergies between sports and the insurance industry. Measuring performance is fundamental to the overall strength and health of life insurance companies. They invest significant time, resources and capital into measuring productivity, especially sales. Their financial professionals (FPs) may not be Olympic athletes, but their performance is monitored, measured and assessed — and at the crux of determining a company’s successes and shortfalls. Regardless of distribution channel, the most common key performance indicators (KPIs) used to monitor productivity of FPs are the number of policies and premium — both total and per policy. Additional metrics used, that are frequently based on strategic goals, include placement rates, persistency rates, policy retention rates and policy size by product. Overall, a systematic approach to measuring productivity is needed for growth, and when strategies and goals are aligned with KPIs, the results can be even better.

Top Performers

Identifying top-performing FPs and understanding their behaviors can help life insurance companies improve productivity. Companies that focus efforts on replicating their top performers can significantly enhance productivity of all their FPs. The results can be substantial too, as recent research discovered that top-quartile FPs are almost two times more productive than median performers across affiliated (agency-building and multiple-line exclusive agent (MLEA)) and independent (independent brokerage and personal producing general agent (PPGA)) distribution channels. Olympic gold medalist Mary Lou Retton said, “Each of us has a fire in our hearts for something. It’s our goal in life to find it and keep it lit.” Like being an Olympic champion, being an FP requires passion and dedication to helping others. Life insurance companies can increase their number of high performers with consistent monitoring, evaluation and fine-tuning of programs that can elevate ordinary performers to extraordinary. 

Investing in Performance

Growth is top of mind with life insurance executives (BCG and LIMRA Executive Report: What’s on the Minds of Life Insurance Executives, 2023) and to generate growth, substantial investments are required. Recent research indicates that life insurance carriers are investing in sales support, both FP- and customer-facing technology, and wholesaling to drive productivity. The ease of doing business is also top of executives’ minds, who are investing in making it easier for FPs to sell. Investing in data collection processes and analytic tools to track FP performance will also help drive growth.

Tailored Strategies

Aligning strategies with the company’s distribution channel is key to increasing life insurance productivity. There are unique tactics that different distribution channels can apply. Companies with affiliated distribution can benefit from a holistic approach rather than a sales approach. Further developing their value-add services will also positively impact life insurance productivity. One unique feature of independent distribution is the use of wholesalers; life insurance productivity can increase through their engagement. The service and support wholesalers provide to the FPs they work with is critical to watch in today’s competitive market. The most common metrics monitored and measured by companies to evaluate their wholesaler productivity are volume and premium, followed by the number of active FPs and the growth in number of FPs; service quality is also monitored. Companies that carefully and strategically define and measure wholesaler productivity that impacts sales and FP growth are better positioned for growth.

Conclusion

A winning attribute of Olympic athletes is unwavering dedication and commitment. They see challenges as opportunities to learn; they check and adjust and have clarity in their goals. As 1996 U.S. tennis Olympic gold medalist Andre Agassi said, “Nothing can substitute for just plain hard work. I had to put in the time to get back. And it was a grind. It meant training and sweating every day. But I was completely committed to working out to prove to myself that I still could do it.”

Selling life insurance is not an Olympic sport, but companies that focus on the big picture and incorporate a similar discipline and commitment into their culture are better positioned for success. Life insurance companies are not just selling life insurance; they are protecting families, and the more families that are protected is a win worthy of gold.