Retention Rate Calculator
Measure client retention by policy count and premium, and the revenue lost to churn.
Retention Rate Calculator
Measure client retention by policy count and by premium, and see the revenue you lose to churn.
Premium-weighted retention
92.0%
100 policies and $120,000 premium lost to churn
| Basis | Retention | Churn |
|---|---|---|
| Policy count | 90.0% | 10.0% |
| Premium weighted | 92.0% | 8.0% |
Estimate for planning only. Premium-weighted retention better reflects revenue health because it accounts for the size of each policy.
FAQs
- How do you calculate retention rate?
- Retention rate is policies renewed divided by policies up for renewal, expressed as a percentage. If 900 of 1,000 expiring policies renew, retention is 90%.
- What is premium-weighted retention?
- Premium-weighted retention divides renewed premium by expiring premium instead of counting policies. It reflects revenue better because it weights large accounts more heavily than small ones.
- What is a good retention rate for an agency?
- Strong independent agencies often retain around 90% or more of their book each year. Lower retention signals churn that erodes future revenue and lowers agency value.
- Why does churn matter so much?
- Lost clients take their renewal commission with them, and replacing them costs far more than keeping them. Even a few points of churn compound into significant lost revenue over time.
Related Terms
Pro-Rata Cancellation
Cancellation returning premium in exact proportion to the remaining policy period, with no penalty — standard when the carrier initiates cancellation.
Short-Rate Cancellation
Insured-initiated cancellation where the return premium is calculated at a penalized rate, retaining more than the earned pro-rata share.
Minimum Earned Premium
The floor premium an insurer retains on cancellation regardless of the pro-rata calculation — typically set at 25-30% of the annual premium.