Applied Systems Client Network

SEMINAR HANDOUT

Retention Calculations using Excel 2003 Pivot Tables & Macro

Retention Calculations Using Excel Pivot Tables and Macro

January, 2010 Page 2

Prepared for ASCnet

Applied Systems Client Network 801 Douglas Avenue #205

Altamonte Springs, FL 32714 Phone: 407-869-0404 Fax: 407-869-0418

Copyright 2009 by Applied Systems Client Network, Inc. (ASCnet), 801 Douglas Avenue #205, Altamonte Springs, FL 32714. Protection claimed in all forms and matters of copyrightable material and information now allowed by law or hereafter granted including both electronic and conventional distribution of herein products. Reproduction or transmission unless authorized by ASCnet is prohibited. All rights reserved. Specific product information regarding Applied Systems The Agency Manager and Vision, as well as other products copyrighted and mentioned within (ex: Microsoft, Excel, etc.) are the product of the individual company and no endorsement or ownership of product should be implied by its mention and use. All workflows are suggested and common workflows. Users of this material agree that ASCnet cannot be held liable for any omissions or errors within the guide.

Original Author:

Sue Good, Alexant Systems Corporation Updated By: Sue Good, Alexant Systems Corporation 01/2010

Target Audience: X Accounting Account Executive

Non-Insurance Accounting Customer Service Representative

X Administrative New Producer

X Principal Experienced Producer

X General IT

Human Resources Other: (describe)

Seminar Type: Microsoft Products

Seminar Level: Advanced Level: An advanced level course facilitates the development of thoughts (ideas, theories, procedures) to the most advanced stage possible. For functional courses, the objectives taught at this level challenge learners to analyze and make business decisions on how to utilize the agency management system or software in their agency, or apply a high level of technical aptitude to understand in depth features and functionality.

Retention Calculations Using Excel Pivot Tables and Macro

January, 2010 Page 3

Class Description: One of the most important pieces of information affecting long term agency profitability and success is the regular tracking of retention information. Yet, in the vast majority of agencies, running this report is the exception rather than the rule. The reason for this is simple. Up until now such reporting has been difficult and time consuming. This class and tool will help eliminate much of this difficulty. Learning Outcomes:

Define Retention, New Business, Lost Business as they relate to the Macro tool.

Apply Excel Pivot Tables and special Macro to TAM, Vision, Doris or Epic data

Evaluate current data integrity and variety of scenarios affecting the ability to obtain accurate retention data from Billing Screen or Production data.

Assumptions: This seminar is based on the following

TAM Version 10.X Microsoft Excel Version 2003

Table of Contents

Retention Reporting ........................................................................................................ 4 Sample Summary Report ................................................................................................ 4 Definitions ....................................................................................................................... 5

Retention ..................................................................................................................... 5 New Business .............................................................................................................. 5 Lost Business .............................................................................................................. 5 Difference on Retained Accounts ................................................................................ 5

Data Sources .................................................................................................................. 5 Transactions (Production Report): ............................................................................... 5 Billing (or Policy Detail) Screens: ................................................................................. 6

APPENDIX I .................................................................................................................... 8 RETENTION WORKBOOK Sample ................................................................................ 8

Step 1 Collect Data Sources ..................................................................................... 8 Step 2 Add Data Column for Comparison ................................................................. 8 Step 3 Combine the Two Worksheets into One ........................................................ 9 Step 4 Insert a Pivot Table ..................................................................................... 10 Step 5 Copy and Paste Pivot Table Data to new worksheet ................................... 11 Step 6 Run Macro ................................................................................................... 11 Step 7 - Summary Sheet ........................................................................................... 12

APPENDIX II ................................................................................................................. 13 Sample Search-Customers, Policies Current Criteria/Fields ......................................... 13

Retention Calculations Using Excel Pivot Tables and Macro

January, 2010 Page 4

Retention Reporting

One of the most important pieces of information affecting long term agency profitability and success is the regular tracking of retention information. Yet, in the vast majority of agencies, running this report is the exception rather than the rule. The reason for this is simple: up until now such reporting has been difficult and time consuming. The purpose of this tool for ASCnet members will help eliminate much of this difficulty. Well use Production or Billing Screen data to calculate not only Retention, but also New Business, Lost Business, and the Difference on Retained Accounts.

Sample Summary Report

Heres what a summary report looks like:

We can easily run a report in TAM that will give us the same commission difference as the example, but of the $1,010 that our commissions went down, wouldnt you want to know that you had $11,648 in New commissions, but had $13,233 due to Lost Business, and of the accounts you kept, the commissions actually went up by $575? In this example, we need to write at least $13,300 in new commissions to make up for the commissions we lost. Follow the steps in the appendix to collect your data, use Pivot Tables to total data quickly by customer or policy, and run the reports using the Retention Macro. A macro is recorded keystrokes and programming in Excel to automate tasks, like the formulas and formatting needed to do the calculations. Use the power of Pivot Tables to quickly collect this same information by Producer, Billing Company, Policy Type, Department, etc. Just Copy and Paste the data from the Pivot Table into a new sheet in your Retention Workbook, and run the Macro again.

Retention Calculations Using Excel Pivot Tables and Macro

January, 2010 Page 5

Definitions

Retention

Lets start with a basic definition of Retention, and then look at how we can measure it using data from our management system. In THIS tool, the definition of Retention is what percentage of Customers or Policies did we keep between two points in time? Or, stated another way, the macro will take the number of Customers or Policies we had at Period 1 less the number we lost between Period 1 and Period 2, divided by the number we had at Period 1. For example, at 12/31/2008, we had 3,000 Personal Lines customers, and at 06/30/2009, we had 3,300. So, the customer count went up by 10%. Looks great, right? Maybe we actually LOST 300 customers, but wrote 600 NEW customers during those six months. The net difference is still 300 more customers, but our Retention Ratio would be 90% (3,000 minus 300 divided by 3,000). New customers are extremely important to grow our business, but retaining existing customers provides the foundation. So, to calculate Retention, we need to know two things how many did we start with, and how many did we lose? How can we tell exactly how many customers we lost in the first six months of 2009?

New Business

When comparing one period of data to another, the macro makes the assumption that if there is NO data in Period 1, but there IS data in Period 2, its New Business.

Lost Business

When comparing one period of data to another, the macro makes the assumption that if there IS data in Period 1, but there is NO data in Period 2, its Lost Business.

Difference on Retained Accounts

When comparing one period of data to another, the macro calculates the difference if there IS data in Period 1, and there IS data in Period 2.

Data Sources

This is a powerful tool, but you need to understand the data you are using to compare one period to another. There are two sources of data you can pull the information from to use this tool: Transactions (Production Report) and Billing Screens (Book