{"id":105,"date":"2022-08-18T10:27:00","date_gmt":"2022-08-18T10:27:00","guid":{"rendered":"https:\/\/dev.nowo.tech\/en\/?p=105"},"modified":"2022-09-23T10:43:07","modified_gmt":"2022-09-23T10:43:07","slug":"how-to-make-an-insurance-brokerage-profitable","status":"publish","type":"post","link":"https:\/\/dev.nowo.tech\/en\/training\/how-to-make-an-insurance-brokerage-profitable\/","title":{"rendered":"How to make an insurance brokerage profitable"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Undoubtedly, one of the&nbsp;<a href=\"https:\/\/nowo.tech\/en\/training\/how-to-plan-your-insurance-brokerage-objectives\/\" target=\"_blank\" rel=\"noopener\">objectives of insurance brokerages<\/a>&nbsp;is to achieve the highest possible profitability. Selling more with less effort ensures the continuity of any company. Although there is already, for example, insurance software that optimizes the revenue-cost ratio of any sale, today we want to talk about this in more depth.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/nowo.tech\/en\/download-post-how-to-make-an-insurance-brokerage-profitable\/\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" src=\"https:\/\/nowo.tech\/en\/wp-content\/uploads\/sites\/3\/2022\/07\/ezgif.com-gif-maker-5-min.gif\" alt=\"\" class=\"wp-image-596\"\/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">How do I know if my insurance business is profitable?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">First of all, you must answer the question, \u201c<strong>Does my brokerage generate enough profit?<\/strong>\u201c.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In other words, your income must exceed your expenses. Obviously, the greater the difference, the more profitable the business will be. If it is still not profitable, you will have to prioritize those sales and tasks that bring in the most profit.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Calculate the profit<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">First, you will have to&nbsp;<strong>calculate the average profit margin of the sale of each policy.<\/strong>&nbsp;We recommend that you make a breakdown by type of product (health, life, home, auto, liability, sick leave\u2026), in order to have a realistic calculation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Next, make an<strong>&nbsp;estimate of the average sales of each product<\/strong>, to get even closer to a realistic calculation. You should multiply the average number of sales of each product by the profit margin they usually leave.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is obvious<strong>&nbsp;that profit is one of the key factors when we talk about profitability<\/strong>. It guides us to prioritize some sales over others according to the cost of closing them.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Profit is calculated as the difference between revenue and total costs<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>PROFIT = TOTAL REVENUE \u2013 TOTAL COST<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Determines the investment<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Now that you know what profits you can aspire to, you can choose to invest part of the profits, in order to get more clients and sales. Undoubtedly, this is the second issue to be taken into account and should be reflected in any brokerage business plan.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Some examples of investments that brokerages usually make:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Advertising:&nbsp;<strong>whatever type of advertising, as long as the results can be measured.<\/strong><\/li><li>New employees: if necessary to<strong>&nbsp;handle more tasks and serve more users<\/strong>.<\/li><li>Operational and business asset costs<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Is it possible to increase the profitability of a brokerage?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Absolutely yes. In fact, it is always possible to monetize and scale insurance sales even further. Only in this way can your brokerage continue to grow.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is important that your business has the ability to<strong>&nbsp;adapt to market changes and new trends.<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Keys to improve insurance profitability<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The first thing to do is to identify your brokerage\u2019s most profitable channels and sources. Once the main sources of income and other benefits have been detected, it will be time to establish an action plan focused on each of them. The idea is to maintain the ones that bring us more profits and act on those that are stagnant or generate losses.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Some more specific points to take into account are:<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Keep a detailed control of your expenses<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">As in all areas of a company, it is highly recommended to keep an exhaustive control of expenses, to have a<strong>&nbsp;control so that they do not exceed your income<\/strong>. These expenses can be the resources that are destined to the business or production processes, including both online and&nbsp;<a href=\"https:\/\/nowo.tech\/en\/training\/how-to-advertise-insurance-effectively\/\" target=\"_blank\" rel=\"noopener\">offline advertising<\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Improve your profit margins<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">As we have already said, the profit margin is the difference between the selling price of the product and the cost that you have to assume until the sale is closed. The two most common ways to increase margins are:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Increase prices<br>Optimize costs and timing<br>Consumers will accept a price increase as long as it is competitive with other offers on the market and provides added value.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Manage your resources better<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">No one likes to waste resources. Resource management is all about profitability and efficiency. Our recommendation is that you use, for example, tools that help you optimize time and operating costs, such as a good&nbsp;<a href=\"https:\/\/nowo.tech\/en\/saas-for-insurance\/\" target=\"_blank\" rel=\"noopener\">SaaS for insurance<\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Study the profitability of your customers<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">To find out whether a customer is profitable, we first have to determine what a profitable customer is: a customer with whom we obtain a revenue stream that exceeds the costs we have to bear.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Of course, we must also take into account the medium- or long-term profitability that a customer can bring us. If the business relationship is prolonged (renewing with our brokerage) or if we get them to take out other insurance policies with us (cross-selling), the profit we make with this client shoots up, which is why&nbsp;<a href=\"https:\/\/nowo.tech\/en\/training\/how-to-retain-customers-in-insurance\/?noredirect=en-US\" target=\"_blank\" rel=\"noopener\">retaining insurance clients is a positive thing.<\/a><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Issues that make a customer profitable or not<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\"><li>If he pays in installments<\/li><li>If he does not make us invest too much time in attending him.<\/li><li>If he decides to sign up quickly<\/li><li>If he decides to take out more insurance with you<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Performs a cost study<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Why is it useful to carry out a cost study for an insurance brokerage?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Because it is possible to<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Increase profits<\/strong><\/li><li><strong>Improve the company\u2019s processes (production, logistics, shadows, purchasing\u2026)<\/strong><\/li><li><strong>To plan the reduction of the company\u2019s costs<\/strong><\/li><li><strong>Determine a tailor-made budget<\/strong><\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Offers value-added services<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Offering a complete customer experience is essential to keep customers satisfied<\/strong>, and as insurance brokers this is a must. Providing value-added services to your users is the perfect way to ensure a loyal customer base.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, this is not always an affordable task for any brokerage. For this reason, we recommend that you opt for&nbsp;<a href=\"https:\/\/nowo.tech\/en\/program-to-sell-insurance\/\" target=\"_blank\" rel=\"noopener\">insurance sales programs<\/a>&nbsp;that help you tackle tasks, close faster and serve more customers with less effort.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Obtain our Insurance CRM<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Now you have an initial idea of how to make your insurance brokerage more profitable.&nbsp;<strong>Knowing which costs to reduce in order to maximise profitability is an indispensable task in the company, whether it is optimising resources or automating processes for insurance sales.<\/strong>&nbsp;These are factors that make you efficient and competitive.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If you liked this article and you have found what you were looking for, you may now be interested in knowing some strategies for selling insurance.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Undoubtedly, one of the&nbsp;objectives of insurance brokerages&nbsp;is to achieve the highest possible profitability. Selling more with less effort ensures the continuity of any company. Although there is already, for example, insurance software that optimizes the revenue-cost ratio of any sale, today we want to talk about this in more depth. How do I know if&hellip; <a class=\"more-link\" href=\"https:\/\/dev.nowo.tech\/en\/training\/how-to-make-an-insurance-brokerage-profitable\/\">Continue reading <span class=\"screen-reader-text\">How to make an insurance brokerage profitable<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":108,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-105","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-sin-categoria","entry"],"_links":{"self":[{"href":"https:\/\/dev.nowo.tech\/en\/wp-json\/wp\/v2\/posts\/105","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dev.nowo.tech\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dev.nowo.tech\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dev.nowo.tech\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dev.nowo.tech\/en\/wp-json\/wp\/v2\/comments?post=105"}],"version-history":[{"count":1,"href":"https:\/\/dev.nowo.tech\/en\/wp-json\/wp\/v2\/posts\/105\/revisions"}],"predecessor-version":[{"id":106,"href":"https:\/\/dev.nowo.tech\/en\/wp-json\/wp\/v2\/posts\/105\/revisions\/106"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dev.nowo.tech\/en\/wp-json\/wp\/v2\/media\/108"}],"wp:attachment":[{"href":"https:\/\/dev.nowo.tech\/en\/wp-json\/wp\/v2\/media?parent=105"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dev.nowo.tech\/en\/wp-json\/wp\/v2\/categories?post=105"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dev.nowo.tech\/en\/wp-json\/wp\/v2\/tags?post=105"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}