Unlock Hidden Profits: Policy-Level Analytics for Insurance Brokers

The Million-Dollar Question
How profitable is each policy in your portfolio? If you can't answer this instantly, you're not alone - and you might be leaving money on the table.

Some statistics:

• 15% of policies are under-billed
• 23% have incorrect commission calculations
• 8% of revenue opportunities missed
• $10,000+ average annual revenue leakage

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Deep Dive: Policy Profitability Formula

Revenue Stream Analysis:

True Policy Profitability = Premium Received (-) Premium Paid to Carriers (-) Commission Paid to Sales Team

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Breaking It Down: Commercial Auto Policy Example

Before Analytics:

"It's one of our most profitable policies"

After Analytics:

• Premium Received: $10,000
• Premium to Carrier: -$9,000
• Sales Commission (30%): -$300
Net Profit: $ 700

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The Automate Accounts Advantage

1. Custom Analytics Dashboard:

‍I) Policy Performance Metrics:

• Premium tracking: Real-time monitoring of premium payments and schedules across all policies, with automated alerts for upcoming renewals and payment discrepancies to ensure no premium is missed or delayed.
• Commission calculations: Automated computation of commission structures for different policy types and carriers, with built-in validation to ensure accurate distribution between the brokerage and sales team.
• Profit margins: Detailed breakdown of profit margins at both individual policy and portfolio levels, considering all costs including carrier premiums, sales commissions, and operational expenses.
• Renewal rates: Comprehensive tracking of policy renewal statistics with predictive analytics to identify at-risk policies.

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II) Carrier Analysis:

• Commission rates: Dynamic comparison of commission rates across different carriers and policy types, helping identify the most profitable carrier relationships and opportunities for negotiation.
• Payment history: Detailed tracking of carrier payment patterns, including payment timing, accuracy, and any discrepancies, ensuring all earned commissions are received correctly.
• Policy performance: Analysis of policy performance by carrier, including claims ratios, customer satisfaction scores, and renewal rates to optimize carrier partnerships.
• Profitability trends: Long-term analysis of carrier relationship value, showing historical trends in commission rates, policy performance, and overall profitability by carrier.

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III) Sales Team Insights:

• Commission structures: Detailed tracking of commission arrangements for each team member, with automated calculations based on policy type, premium size, and performance incentives.

• Performance metrics: Comprehensive dashboard showing key performance indicators for each sales team member, including new business generated, renewal retention, and cross-selling success.

• Revenue generation: Real-time tracking of revenue generated by each team member, broken down by policy type, carrier, and client segment to identify top performers and areas for improvement.

• Policy retention: Analysis of each sales person's portfolio retention rates, including early warning indicators for at-risk policies and successful retention strategies.

2. Real-Time Reporting Power

I) Policy Profitability Report:

•Individual policy performance: Detailed analysis of each policy's financial metrics, including premium collected, commissions earned, and operational costs, with automated alerts for policies falling below target profit margins.

• Group policy analysis: Comparative analysis of similar policy types across different carriers and client segments, helping identify which policy groups deliver the highest returns for your brokerage.

• Historical comparisons: Year-over-year and quarter-over-quarter performance tracking of policies, highlighting seasonal trends and long-term profitability patterns.

• Profit trend analysis: Visual representation of profit trends with predictive analytics to forecast future performance and identify policies needing rate adjustments.

II) Carrier Performance Report:
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• Commission rate analysis: Detailed breakdown of commission structures across carriers, comparing rates for similar policy types and identifying opportunities for rate negotiation.

• Payment efficiency: Tracking of carrier payment timelines, commission accuracy, and processing efficiency, with automated flagging of delayed or incorrect payments.

• Policy type profitability: Analysis of which policy types perform best with each carrier, helping optimize your carrier partnerships and policy offerings.

• Relationship value: Comprehensive scoring of carrier relationships based on commission rates, payment reliability, policy performance, and support quality.

III) Revenue Leakage Report:

• Missed billing opportunities: Automated detection of unbilled policy changes, endorsements, or premium adjustments, ensuring no revenue opportunity goes unnoticed.

• Commission discrepancies: Real-time comparisonof expected versus received commissions, with automatic flagging of any variations for immediate investigation.

• Collection inefficiencies: Analysis of premium collection patterns, identifying delayed payments and recommending process improvements for faster revenue realization.

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3.   Action-Driven Insights

• Identify most profitable policies: Use multi-factor analysis to pinpoint your highest-performing policies based on premium size, commission rates, and operational costs, allowing for strategic portfolio focus.

• Optimize carrier relationships: Leverage detailed carrier performance data to negotiate better commission rates and strengthen partnerships with your most valuable carriers.

• Adjust commission structures: Fine-tune your sales team's commission structures based on policy profitability data, ensuring alignment between compensation and actual policy value.

• Target profitable policy types: Use historical performance data to identify and focus on the most profitable policy types for your brokerage, informing both sales strategy and marketing efforts.

Ready to unlock your policy profitability insights? Contact us at hello@automateaccounts.com to get your report today or book a free consultation to know your how your business can change the way it operates.

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