Retention rate

Definition

The share of premium an agency keeps at renewal, in a business built almost entirely on them.

Why It Matters

Retention is the multiple in this trade. A book renewing in the low nineties compounds and finances cleanly; one in the eighties is leaking faster than new business can fill, and the leak is invisible in a revenue line that looks flat. Ask for retention by carrier and by segment rather than in aggregate, since commercial and personal lines behave differently, and find out whether the renewals are worked by the owner personally.