For most insurers, success depends on how well they manage three things: risks, claims and costs. That’s where insurance KPI metrics come in. These key performance indicators help insurance companies measure everything from how quickly they settle claims to how much they spend on operations.
Instead of drowning in numbers, KPIs make it easier to track real performance like your expense ratio, client satisfaction levels and policy sales growth. In this article, we’ll show you which KPIs matter most and how to use them to keep your insurance business profitable and efficient.
Insurance KPI metrics are measurable indicators that help an insurance company understand how well it’s performing in different areas of its operations, from underwriting and claims to sales and customer service. These key performance indicators (KPIs) turn everyday activities into trackable data, giving finance and management teams a clear picture of the company’s performance.
At their core, KPIs are designed to answer a simple question: Is the business moving in the right direction?
In an insurance business, that means tracking how efficiently claims are being processed, how much revenue policies generate, how satisfied clients are and how effectively the team controls operational costs. For instance, metrics like the loss ratio or expense ratio reveal how much an insurer spends compared to what it earns, while the combined ratio shows whether the business is profitable or not.
These performance measures also help identify weak spots, maybe report delays in the claims process, higher-than-normal ratios due to excessive legal or administrative fees, or a drop in client satisfaction because of longer settlement times. With the right KPI data, insurers can uncover trends, detect fraud and make data-driven decisions to reduce costs and improve operational efficiency.
In short, insurance KPIs act as a dashboard for your entire organisation. They show whether your insurance operations are running smoothly, where money leaks happen and which departments like underwriting, finance or claims, need attention.
In the insurance industry, even a small inefficiency can snowball into significant losses. That’s why tracking insurance KPIs is no longer optional — it’s a core part of improving overall insurance sales performance and operational health. These key performance indicators (KPIs) help insurers measure how efficiently their teams handle insurance policies, how effectively they serve clients, and how financially strong the company really is.
Every insurance company aims to stay profitable while meeting customer expectations. Financial KPIs such as insurance loss ratio, insurance expense ratio, and the average insurer’s combined ratio reveal how much of the total gross written premium is spent on claim costs, legal fees, and administrative expenses.
For instance, if your combined ratio is higher than 100%, your operational costs exceed your earnings. By closely monitoring these insurance metrics, finance departments can reduce unnecessary spending, optimise insurance agency KPIs, and maintain a healthy net profit margin. In turn, this improves the company’s standing in line with market expectations and enhances investor confidence.
Delays in settling claims can damage client trust and increase costs. Metrics such as claims settlement ratio, average time to settle insurance claims, and percentage pending provide clear insights into how efficiently your team handles claims.
Tracking these claims-specific insurance KPIs helps insurers identify process bottlenecks, like slow approvals, complex operational procedures, or high legal and administrative fees. Improving these areas not only reduces settlement costs but also boosts client satisfaction, leading to better retention and referrals.
Integrating these insights into an insurance performance dashboard or CRM analytics insurance system makes it easier to act on real-time data and improve decision-making across departments.
Insurance KPIs are not just numbers; they’re decision-making tools. A rising expense ratio can indicate excessive overheads, while falling policy sales growth may point to weak insurance lead conversion or poor sales execution.
Analysing insurance agent efficiency metrics helps you understand how well your team is performing, who needs coaching, and where automation can make a difference. For example, integrating insurance CRM reporting tools allows you to track daily activities, evaluate sales targets, and adjust strategies quickly.
This data-driven approach improves operational efficiency, aligns team performance, and ensures resources are used wisely helping the insurance business grow without inflating costs involved.
In an era where speed and personalisation define success, customer satisfaction is as vital as financial performance. KPIs like insurance renewal rate, claims settlement ratio, and average payout per claim show how well you’re retaining and serving clients.
A strong CRM analytics insurance setup can capture data from every interaction — from sales calls to post-claim feedback giving insights into how customers feel about your service. When client satisfaction levels drop, the data highlights whether the issue lies in delayed responses, complicated claim filing, or lack of proactive communication.
By improving insurance sales performance through automation and clear visibility, insurers can maintain trust, increase renewal rates, and convert more prospects into long-term clients.
Every insurance business relies on multiple departments, from underwriting to claims, each with its own performance goals. That’s why KPIs are grouped into categories that help insurers monitor specific parts of their operations. Let’s break them down one by one.
These indicators show how efficiently an insurance company earns, spends and invests its money. They help the finance department understand profitability and ensure that operational costs, claim payouts and administrative fees remain within acceptable limits.
Measures the percentage of incurred losses (claims paid plus reserves) compared to premiums collected.
A high loss ratio means the company is paying out more in claims than expected, which could point to underwriting issues or rising claim costs.
Reflects how much of the company’s total revenue is spent on administrative, legal and marketing activities. Tracking this helps identify areas where the insurer can reduce costs and streamline operations.
Adds the loss ratio and expense ratio together to show whether the business is profitable before investment income. If the combined ratio is above 100%, it means costs are higher than earned premiums; a clear sign of inefficiency.
The percentage of net income remaining after all the costs involved, including settlement costs, legal fees and administrative expenses, is deducted. A stable or improving margin indicates that the company’s performance is financially healthy.
Represents the total premiums collected before deductions for reinsurance. Tracking GWP growth helps assess business expansion and market penetration.
Operational KPIs measure the internal efficiency of your insurance operations, everything from processing claims to managing policies and staff performance.
Tracks how long it takes to pay claims after they’re filed. Shorter settlement times indicate efficient systems and happier customers.
Measures the ratio of claims paid to total premium revenue. If this ratio keeps climbing, it might suggest poor underwriting or an increase in fraudulent claims.
Shows how many claims are still open or under investigation. A high percentage signals potential backlogs or delays in report procedures.
Helps identify employees or claims adjusters who handle the highest (or lowest) volumes, making it easier to identify areas for training or process improvement.
Indicates how well your sales and marketing teams are performing. This key metric helps evaluate the success of new campaigns, lead conversion rates and customer outreach efforts.
Combines multiple efficiency metrics to measure how effectively the company runs day-to-day operations, factoring in automation, team performance and resource utilisation.
In insurance, long-term profitability depends on loyal clients and strong relationships. These KPIs track how satisfied and engaged your customers are.
Derived from feedback surveys or NPS scores, this metric measures how happy existing clients are with claim handling, communication and service quality.
The percentage of customers who renew their policies after the first term. A low rate could mean dissatisfaction with pricing, claim experience, or communication.
Tracks how many new clients join your company over a specific period. When combined with retention data, it shows whether your overall customer base is growing or shrinking.
Measures the average time it takes to resolve customer complaints; a strong indicator of customer experience and internal responsiveness.
Together, these key performance indicators (KPIs) provide a full view of an insurer’s financial health, operational strength and client relationships. They make it easier to make claims-related business decisions, manage invested assets and stay ahead of market expectations.
Now that we know which key performance indicators (KPIs) matter most, let’s look at how to calculate them. These formulas give insurers a clear, data-driven way to evaluate performance and take informed action across departments.
Each metric below reveals something different, from profitability and claims efficiency to customer satisfaction and operational control.
Formula:
Example:
If an insurer pays ₹8 crore in claims during a year and earns ₹10 crore in premiums, the loss ratio is 80%.
This means 80% of the total premium revenue is spent on claim costs; a healthy number for most insurers, depending on their line of business.
A higher-than-normal ratio might indicate underpricing or frequent large losses, while a lower ratio may suggest overly strict underwriting or fewer claims than expected.
Formula:
Example:
Suppose your insurance company spends ₹2 crore on administrative fees, legal costs and marketing, while earning ₹10 crore in written premiums.
Your expense ratio is 20%. This shows the share of premiums consumed by operational costs. Lower is better, as it signals better control over expenses.
Formula:
Example:
If your loss ratio is 80% and your expense ratio is 20%, your combined ratio becomes 100%.
An average insurer’s combined ratio below 100% means underwriting profits are being made; above 100% indicates losses before considering investment income.
This is one of the most important metrics in the insurance industry, as it combines the impact of claims and expenses to show the company’s operational efficiency.
Formula:
Example:
If an insurer collects ₹5 crore in premiums and pays ₹3 crore in claims, the claims ratio is 60%.
Monitoring this helps insurers understand whether they are spending too much on claims paid or facing increased settlement costs due to poor risk selection or fraud.
Formula:
Example:
If your team takes a total of 600 days to close 100 claims, the average time to settle insurance claims is 6 days per claim.
This KPI helps insurers measure how efficiently claims adjusters work and whether report delays or legal and administrative fees are slowing down processes.
Formula:
Example:
If your company sold 10,000 policies last quarter and 12,000 this quarter, your policy sales growth is 20%.
This KPI helps track how well your marketing campaigns and sales teams are meeting sales targets and attracting new clients.
Formula:
Example:
If your net income after deducting all costs involved, including settlement costs, legal fees and administrative expenses, is ₹1 crore, and your total revenue is ₹10 crore, your net profit margin is 10%.
This shows how efficiently your insurance business converts revenue into profit.
Formula:
Example:
If your company’s total assets are ₹50 crore and liabilities amount to ₹40 crore, your policyholder surplus is ₹10 crore.
This metric reflects financial strength and the insurer’s ability to handle unexpected claims or losses while maintaining stability.
Formula:
Example:
If 900 out of 1,000 filed claims were paid, your ratio is 90%. It’s one of the most visible metrics for customers; a high ratio builds trust and shows commitment to client satisfaction and fairness.
Formula:
Example:
If invested assets yield ₹50 lakh on total premiums of ₹5 crore, the investment income ratio is 10%.
This indicator matters because most insurers depend on investment returns to balance underwriting losses or fund operational improvements.
Together, these formulas paint a complete picture of how well an insurance company performs; whether it’s earning profits, controlling operational expenses, paying claims efficiently, or meeting market expectations.
Knowing your insurance metrics is one thing. Tracking and using them to make better business decisions is another. For most insurers, the challenge isn’t the lack of data; it’s the lack of structure. With so many moving parts in insurance operations, it’s easy for report delays, manual errors, or fragmented systems to distort results.
Here’s how insurance companies can bring order to the chaos and make KPI tracking actually useful.
Most insurers store data in silos — underwriting, finance and claims departments all maintain their own reports. This makes it hard to see the full picture. By integrating these systems into one central dashboard, companies can get a unified view of premiums collected, claims paid and operational costs in real time.
When the underwriting department and the claims team share KPI data, it becomes easier to spot trends. For instance, if a particular product line shows higher loss ratios or longer average payout times, the cause can be traced back faster.
Each key performance indicator (KPI) should have a clear owner. Finance teams manage the expense ratio and net profit margin, while claims heads handle metrics like average time to settle claims or percentage pending.
Assigning ownership ensures accountability and consistent reporting. It also helps identify employees or departments responsible for improvement, rather than letting KPIs drift without action.
Tracking key metrics consistently is vital. Decide how often each KPI will be reviewed, daily, weekly, or monthly.
For example:
Creating a routine ensures that relevant KPIs stay accurate and reflect real-time performance instead of outdated numbers.
Manual reporting often leads to report delays and human error. Modern CRM and analytics tools can automatically track claims processed, settlement costs and premiums collected, then update dashboards in real time.
Automation reduces administrative fees and saves time for claims adjusters and finance teams, allowing them to focus on insights rather than data entry.
Automated systems can also trigger alerts when a metric crosses a threshold. For example, when the combined ratio gets higher than normal, or when claim costs spike above expected levels.
Tracking KPIs only makes sense when you know what “good” looks like.
Compare your results against:
For example, if your average insurer’s combined ratio is consistently above 100%, it’s time to review operational procedures or reassess pricing strategies. Benchmarks help you see where you stand and set realistic goals for improvement.
The true power of KPIs lies in the decisions that follow. Use insights to refine underwriting standards, optimise operational efficiency and improve customer experience. If claims processed per adjuster are dropping, it may be time for retraining or automation. If customer satisfaction dips, review claim communication steps or reduce response time.
By acting on data-driven insights, insurers can not only reduce costs but also strengthen client trust and boost profitability.
KPI tracking isn’t a one-time setup. As your insurance business evolves, your metrics should too. Introduce new indicators when you launch new products, enter new markets, or automate new processes.
Regular audits also ensure that the kpi measures remain relevant and aligned with your business objectives. Over time, these adjustments help your company stay agile and competitive while maintaining a focus on customer satisfaction and financial health.
In the insurance business, success comes down to how well you track and act on your numbers. The right insurance KPI metrics, from loss ratio and expense ratio to average time to settle claims, give insurers a clear view of profitability, efficiency and customer satisfaction.
By focusing on these key performance indicators, your company can make faster, smarter decisions, control operational costs and ensure every claim is handled with accuracy and care.
If you’re ready to make your operations truly data-driven, telecrm, an insurance CRM can help.
From tracking policy sales growth to monitoring claims-related business decisions, telecrm gives you a unified dashboard for every metric that matters.
Request a Demo to see how you can turn your data into better performance, happier clients, and consistent growth with telecrm
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