Pro Tips

3 Metrics BGAs Should Consider

by Tiffany Markarian

Here we discuss 3 sets of Brokerage General Agency (BGA) metrics firms should consider in their annual business planning. In working with BGAs on their business development, there is a set of questions that continually come up during conversations. The first question is usually “How do we go after new markets…particularly supporting wealth advisors?” The second question is often “How do we set ourselves apart in the industry?” The third question, which might be the most important, is “We had a good year, but growth has stagnated, and we are not sure why?” In this last statement, this is where BGA metrics come into play. It is your metrics that can either drive or hinder your growth, depending on which angle you look at them.

Like all effective insurance firms, BGAs will measure the critically important areas such as profit and loss, premium, revenue by product line and expenses. In terms of expense management, they will measure staffing and capacity relative to the business coming in. They may look at the number of case managers to overall case count and the number of external brokerage/marketing managers to the number of financial advisors or clients being served. We know these are important metrics and need to be part of every base analysis. However, there is an additional set of metrics that many BGAs overlook, and when you dig deeper into these metrics, this is where the real story can often be found. These additional metrics may provide deeper insights into why growth may be stagnated or the real markets you need to be focusing on.  It is your metrics that tell the story.


One set of additional metrics to consider is not just how many cases are coming through and whether or not the volume can be supported by your case managers. You may need to look at the actual size of the cases, meaning do you have a minimum threshold? Ask yourself, what minimum premium or override threshold needs to be met to be profitable for your operation?  How many cases did your team process over the last two years that were under this profitable threshold? Perhaps you had a significant amount of cases under $500 premium, or under $100 or $200 of override, depending on the threshold for your specific business.

Having been in many BGA offices that are seeking growth, this seems to be a common issue. It may be costing you more to process a bulk of lower tier cases than the profit being made. For certain, there are many BGAs who have a vast foothold in technology and can easily and efficiently process a large volume of smaller cases with good profitability. Perhaps you have a direct-to-consumer model where a flow of smaller cases can be easily incorporated.

On the flip side, there are many firms where 10% to 30% of the cases coming through are falling below a profitable threshold and those cases may be severely burdening your case management team. It may not be profitable or efficient to support these lower cases as they may be clogging your overall operation. The problem may not be the case count per number of case managers you employ; the root problem may be the types of cases coming in, and that rests on a specific group of advisors or clients who are submitting these cases.

All too often, the planning strategies used are to support your current circumstances. It might be possible you are not addressing a real problem, which may be a select category of advisors who are submitting lower threshold business with you. If a percentage of your advisors are responsible for your lower thresholds, they may need to be notified and addressed accordingly with options. Many of these advisors submit the bulk of your NIGOs or take up your case managers’ time with questions or demanding behaviors on these lower cases. You may need to consider dealing with these lower tier advisors accordingly – whether it is moving them to an e-app platform, a minimum premium threshold that must be met, or perhaps a change in relationship altogether.

Let’s be clear, we are not talking about your entire base of advisors; it may be dealing with a specific group of advisors who have been overlooked and you allowed their business to flow in. You have many advisors and clients to serve, most of whom are doing very good, clean business at a profitable level – even if it might be on smaller cases. If your case managers and external wholesalers are tied down, however, from the lower tier advisors, this prevents them from elevating the service experience for your more profitable advisors or advisors in your movable middle. If you spent more time with your moveable middle, you may be able to help elevate their overall business and service experience and help them climb to new levels.

Some of these lower tier advisors and cases are giving your team the runaround and syphoning away valuable time and resources. If your capacity is tied down on less profitable business, it is difficult to wrap your arms around new target markets or spend time with advisors who are bringing in clean business. You don’t want the morale or energy in your operations team to be crushed because they feel your firm is not dealing with these advisors – and in most cases, your case managers and internals know exactly who these advisors are.

This is not to say that these advisors are not profitable in other product lines or services with your firm; they may very well be and that is an important consideration in your analysis. This is why we suggest looking at your metrics from many different angles. You might also analyze how many illustrations and quotes your team is running on behalf of these advisors to get this lower tier business. It may be time to have a conversation.


The next set of metrics to consider is the markets your advisor or client base comes from. Identify what percentage of the advisors you support are property and casualty specialists, independent insurance professionals, benefits specialists, career advisors, broker/dealer relationships, RIAs (Registered Investment Advisors), CPAs, etc. How much business and override are generated per market and what is the average business per advisor in these markets?

If you have a direct-to-consumer model, perhaps you have specific target markets using your platform such as teachers, single mothers, or demographics with specific health or underwriting criteria – these are all target markets with networks that can be tapped into to promote your services. If it turns out that some of your markets are very profitable, but they are a small percentage of your overall advisor/client base, then your external brokerage managers may need to focus on developing a target marketing strategy for these emerging markets.

Dealing with some of the lower tier advisors in their unit may help open up the time needed to focus on developing new opportunities. As we know, some of the emerging markets such as RIAs and wealth managers require a highly customized point-of-sale service model and you cannot just use traditional strategies or sales language to build a relationship with them. You will need to dedicate time to learn how to design a proper support platform and approach.


The next set of BGA metrics you might consider is where the business will come from in the next five to seven years. Meaning, you may need to look at the ages within your advisor base. How many of your advisors are at an age where in five to seven years they may be retiring or slowing down in their business? There are many firms where more than 30% to 50% of their advisors are planning to retire or slow-down in the next few years. These advisors are very profitable and active today, but that may not be the case over the next several years. Will they be as active three, five or seven years from now and what impact will that have on your future sustainability? Should you be focusing on a younger base or helping your more mature advisors with a succession strategy?

Every BGA is unique and metrics will mean different things to different firms depending on your model. Looking at metrics is not a one-size fits all strategy and there are more metrics to consider beyond the scope described above. Some firms work highly efficiently with technology and can fully support both a volume of smaller cases alongside the more advanced cases. What we hope you might consider is looking beyond the bottom line with metrics and truly digging into your story. It may take some detective work, but you could be sitting on emerging markets or growth opportunities and not seeing the picture fully. It’s an analysis worth considering and a productive exercise to conduct with your entire team.


BGA metrics. The services offered by Advantus Marketing, LLC are not intended to replace the need for independent legal, regulatory, tax, human resources, financial or operational business guidance. Individuals and firms are advised to seek the counsel of such licensed professionals concerning the application of these areas to their specific, unique circumstances. No guarantee of business or future profitability results should be inferred.

Tiffany Markarian3 Metrics BGAs Should Consider

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