The average premium per policy is a measure of the average amount of money an insurance company collects in premiums for each policy it sells. This KPI is calculated by dividing the total premiums collected by the number of policies sold over a given period of time, typically a year.
For example, if an insurance company collects $10 million in premiums and sells 100,000 policies in a year, its average premium per policy would be $100.
The average premium per policy KPI is a crucial metric for insurance companies for several reasons:
The average premium per policy KPI is a key metric for insurance companies, as it provides valuable insight into their pricing strategies, competitive positioning, and customer loyalty. By monitoring this metric over time, insurers can gain invaluable insight into how they are performing relative to their competitors, and make adjustments as needed to increase profitability.