Quote/bind ratio
The quote/bind ratio is a key performance indicator (KPI) used by insurance companies to measure the effectiveness of their sales and underwriting processes. This KPI is calculated by dividing the number of quotes generated by the number of policies actually bound or sold over a specific period of time, usually a quarter or a year.
The quote/bind ratio is important because it provides valuable insight into the success of an insurance company's sales and underwriting processes. A low quote/bind ratio may indicate that an insurance company is not effectively converting leads into sales or that its underwriting processes are too stringent. A high quote/bind ratio may indicate that an insurance company is not properly assessing risk or is overpricing its policies.
Importance of the Quote/Bind Ratio KPI
The quote/bind ratio KPI is important for several reasons:
- Sales Effectiveness: The quote/bind ratio helps insurance companies evaluate the effectiveness of their sales process. A low ratio may indicate that an insurance company is not effectively converting leads into sales, while a high ratio may suggest that the company is not properly assessing risk or may be overpricing its policies.
- Underwriting Efficiency: The quote/bind ratio is also important for evaluating the efficiency of an insurance company's underwriting process. A low ratio may suggest that the company is too selective in its underwriting process, while a high ratio may indicate that the company is not properly assessing risk.
- Customer Experience: Finally, the quote/bind ratio is also important for evaluating an insurance company's customer service experience. A low ratio may suggest that customers are having difficulty obtaining reasonable quotes or that the company is taking too long to process applications and bind policies. On the other hand, a high ratio may suggest that customers are being quoted for policies without a thorough assessment of their risk profile.
