How can you successfully benchmark in the insurance industry?

1 Define your objectives and scope

The first step in benchmarking is to define what you want to achieve and what you want to compare. You need to have a clear and specific purpose for benchmarking, such as improving customer retention, reducing claims costs, or enhancing product innovation. You also need to determine the scope of your benchmarking project, such as which processes, functions, or outcomes you want to measure and compare. You should align your objectives and scope with your strategic goals and priorities.

2 Choose your benchmarking partners and sources

The next step is to decide who and where to benchmark against. You can compare different units or teams within your own organization (internal benchmarking), compete with direct competitors in the same market or segment (competitive benchmarking), analyze similar functions or processes in different industries or sectors (functional benchmarking), or assess the best performers in any industry or sector (best-in-class benchmarking). Additionally, you can acquire data and information from public sources such as industry reports, surveys, rankings, awards, or publications; private sources like consultants, associations, networks, or databases that provide specialized or proprietary data; and direct sources through interviews, site visits, or collaborations with your benchmarking partners. It's important to choose your benchmarking partners and sources based on their relevance, reliability, and availability.

3 Collect and analyze the data and information

The third step is to collect and analyze the data and information from your benchmarking partners and sources. You need to use appropriate methods and tools to gather, validate, and standardize the data and information. You also need to use suitable metrics and indicators to measure and compare your performance, processes, and practices with those of your benchmarking partners. You should use both quantitative and qualitative data and information to get a comprehensive and balanced view of the benchmarking results.

4 Identify the gaps and opportunities

The fourth step is to identify the gaps and opportunities based on the benchmarking results. You need to compare your strengths and weaknesses with those of your benchmarking partners and identify where you are lagging behind or leading ahead. You also need to identify the best practices and innovations that you can learn from or adopt to improve your performance, processes, and practices. You should prioritize the gaps and opportunities based on their impact, feasibility, and urgency.

5 Implement the improvement actions

The fifth step is to implement the improvement actions based on the gaps and opportunities identified. You need to develop and execute a plan to close the gaps and seize the opportunities. You also need to allocate the resources, assign the responsibilities, and monitor the progress of the improvement actions. You should involve and communicate with your stakeholders, such as your employees, customers, and regulators, to ensure their support and feedback.

6 Evaluate and review the benchmarking process

The final step is to evaluate and review the benchmarking process and its outcomes. You need to measure and report the results and benefits of the improvement actions. You also need to assess and document the lessons learned and the challenges faced during the benchmarking process. You should review and update your objectives, scope, partners, sources, methods, and metrics periodically to ensure their relevance and validity.

Benchmarking is a powerful tool to enhance your performance, processes, and practices in the insurance industry. By following these steps, you can successfully benchmark in the insurance industry and gain a competitive advantage, customer loyalty, and operational excellence.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?