Setting the Bar: Key Metrics in Life New Business

by Craig Weber, January 5, 2007

Abstract

Boston, MA, USAbr /> January 5,  2007

Unit cost, staffing, and cycle time benchmarks will help carriers evaluate their business strategies.

Most life insurers have a hard enough time generating their own process and cost metrics for new business. But getting that data for a peer group of top carriers is the only way for carriers to assess their competitive position.

 

"Benchmarking data is essential for carriers that want to remain competitive," says senior analyst Craig Weber, author of the latest Celent report, . "Understanding new business unit costs, staffing trends, and cycle times gives carriers a huge competitive advantage that they can wield against the companies that have similar products and services." For example, Weber says that underwriting requirements are a particular area of focus for many carriers, because they typically represent around 40% of new business budgets. But many carriers are not sure how their requirement costs stack up against the competition. The report is based on a Celent benchmarking exercise that examines data provided by 11 prominent life insurance carriers. Other metrics discussed in the report include budget per insurance application received and per policy issued, staff productivity, average staff costs by position, average new business cycle time, and more.

The 31-page report contains 14 figures and five tables. A table of contents is available online.

Members of Celent's Life/Health Insuranceresearch service can download the report electronically by clicking on the icon to the left.  Non-members should contact info@celent.com for more information.  

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

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Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
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Tel: +44 (0)782 448 3336

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Yumi Nagaoka
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Table of Contents

Boston, MA, USAbr /> January 5,  2007

Executive Summary 3
Introduction 5
  Focus Area 5
  Methodology 6
  Suggestions on Data Usage 6
Key Metric Summary 7
About the Respondents 8
  Key Findings 8
  Background 8
  Face Amounts and Insured Ages 9
  Participants by Channel 12
Unit Costs 14
  Key Findings 14
  Background 14
Staffing Issues 17
  Key Findings 17
  Staffing and Business Volume 17
  Staff Costs by Function 18
  Staff Costs by Position 19
  Illustrating Impact of Cost by Position 20
  Experience Levels 22
Cycle Time 24
  Key Findings 24
  The Need for Speed 24
  Carrier Type and Process Step Comparison 25
Conclusions 27
Objectivity and Methodology 28

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