Guide · 9 min read
Insurance agency KPIs: the metrics owners should track
Short answer. Track a short list, the same way every month: retention rate, organic growth, EBITDA margin, revenue per employee, new business vs renewal mix, carrier concentration, producer productivity and commission accuracy, the share of expected commission that actually arrived. Every one of them is built on commission revenue, so if the revenue figure is wrong, every ratio downstream is wrong with it.
Eight numbers, one formula each, and the one input they all share.
TL;DR
- Most agency KPIs are ratios of commission revenue. Check that revenue before trusting the ratios.
- Organic growth strips out acquisitions and contingent pay; it is the cleanest growth number.
- Carrier concentration and new vs renewal mix tell you how fragile the revenue is, not how big.
- Commission accuracy is the KPI most agencies don’t track: variance found when statements are reconciled against the book.
- The only benchmarks quoted here come from the Big “I”/Reagan Consulting Best Practices Study, which covers selected high-performing agencies, not the average agency.
This guide is for owners of independent property and casualty (P&C) agencies in the United States who want a monthly or quarterly scorecard. Each KPI has a formula and a short example with invented figures. Definitions vary between consultants and agency management systems; what matters most is that you compute each one the same way every period. Lapidar is a tool that checks commission statements line by line; it is in its founding pilot.
Why should commission revenue be checked before any KPI?
Because it is the numerator or denominator of almost every metric below. Revenue per employee, EBITDA margin, organic growth and producer productivity all start from the commission the agency booked. If a carrier underpaid renewals for three months, or a policy was paid twice, the agency’s KPIs move without anything having changed in the business. The statement and the agency system often disagree, so decide which figure you report: commission expected per your schedules, or commission actually received. Reporting both, and the gap between them, is the point of the last KPI on the list.
Which KPIs should an agency owner track?
| KPI | Formula | What it tells you |
|---|---|---|
| Retention rate | Renewal commission retained ÷ commission up for renewal | How much of the book stays |
| Organic growth | (Commission this year − commission last year, both excluding acquisitions and contingents) ÷ last year | Growth you produced, not bought |
| EBITDA margin | EBITDA ÷ net revenue | How much of revenue the agency keeps |
| Revenue per employee | Net revenue ÷ full-time equivalent staff | Productivity of the whole team |
| New vs renewal mix | New business commission ÷ total commission | How dependent growth is on new sales |
| Carrier concentration | Largest carrier’s commission ÷ total commission | Exposure to one carrier’s decisions |
| Producer productivity | Book or new commission per producer | Whether producers are paying for themselves |
| Commission accuracy | Commission received ÷ commission expected, per carrier | How much of what you earned actually arrived |
How do you calculate an agency’s retention rate?
The simplest version counts policies: policies renewed in the period divided by policies that came up for renewal. A version weighted by commission is usually more useful to an owner, because losing one large commercial account matters more than losing three small personal auto policies. Use renewal commission retained divided by the commission on policies up for renewal, both at the prior term’s rates, so rate changes don’t pass for retention.
To put a dollar figure on a point of retention, the client retention value calculator follows your book forward with no new business and shows what one more point is worth over three and five years, and in book value at your own multiple.
Two cases distort it. A rewrite with another carrier is a retained client but a lost policy at the first carrier; decide which you are measuring. And a renewal that was processed by the carrier but never paid looks retained in the agency system and lost in the bank. Missing commissions on renewals covers how that happens.
What is organic growth for an insurance agency?
Organic growth is the change in commission and fee revenue from one year to the next, after removing revenue from acquired books and, usually, contingent commission, which swings with loss results. The Big “I” and Reagan Consulting report it by revenue category, alongside pro forma EBITDA margin (Big “I”, 2026).
Organic growth mixes three things: new business, retention and rate. In a market where premiums are rising, a book can grow organically while losing clients. Look at it next to retention and the new business mix, not alone.
What does EBITDA margin measure in an agency?
EBITDA margin is earnings before interest, taxes, depreciation and amortization divided by net revenue. Agencies often look at a “pro forma” version that normalizes owner compensation and one-off items, so that two agencies with different owner pay can be compared. Your accountant should define the adjustments; keep them the same each year. EBITDA is also the figure most agency buyers start from, which is why the margin matters at sale time.
How do you calculate revenue per employee?
Net revenue divided by full-time equivalent employees, counting part-time staff by hours and, in many definitions, owners who work in the business. It measures the productivity of the whole team, service and producers together. It rises when the agency adds revenue without adding people, and it falls when the agency hires ahead of growth, which may be the right call. We don’t quote a benchmark for it here; we didn’t find a recent published figure we could verify.
Why does the new business vs renewal mix matter?
New business commission divided by total commission. A high share can mean a strong sales culture, or a book that leaks and has to be refilled every year; read it next to retention. Because many carrier schedules pay different rates on new and renewal terms (see new business vs renewal commission), the mix also changes average commission rate, so a shift in the mix can look like a rate change on the statements.
What is carrier concentration and why track it?
The share of commission that comes from your largest carrier, and from your top three. A high share means one carrier’s decision, such as a commission rate change, a moratorium in a line, or the end of an appointment, moves the whole agency. It is also a question buyers ask. Business placed through an aggregator may sit under the aggregator’s code; count it by underlying carrier if you want the real exposure.
For context on the carriers themselves, our P&C market share by state pages list the largest insurance groups in a state by written premium, from the state insurance department’s own report (starting with California).
How should producer productivity be measured?
Common measures are each producer’s book (commission on accounts they handle), new business commission written per year, and how long a new producer takes to cover their pay. The Best Practices Study tracks a related agency-level figure, net unvalidated producer payroll (NUPP), which the Big “I” describes as a measure of producer recruitment and development; its 2026 update reports NUPP ranging from 0.0% to 1.7% across revenue groups and calls 1.5% to 2.0% a healthy level of investment (Big “I”, 2026). However you measure it, use commission received, not commission written: a producer’s book that was underpaid by a carrier looks less productive than it is. How splits are calculated is in producer commission splits.
What is commission accuracy, and how do you measure it?
Commission accuracy is commission received divided by commission expected, for each carrier and month, where expected means premium times the rate in your commission schedule for every policy that should have paid. The companion figure is the variance found in reconciliation: missing lines, underpaid lines and lines paid twice, in dollars.
- Commission expected (premium × schedule rate, 212 policies)
- $41,380.00
- Commission received on statement
- $40,115.00
- Variance found in reconciliation
- −$1,265.00
- Commission accuracy
- 96.9%
The trend and the dollars recovered matter more than the percentage. It only exists if statements are checked line by line against the book, which many agencies do only partially; the reconciliation guide explains what that involves.
What are good benchmarks for agency KPIs?
Few are published from sources we can check. The one we rely on is the annual Best Practices Study by the Big “I” and Reagan Consulting. Its 2026 update reports, for agencies selected as Best Practices agencies:
- organic growth rates ranging from 6.2% to 10.2% across revenue categories, down from 8.7% to 11.3% in 2025;
- pro forma EBITDA margins ranging from 23.2% to 30.7% across revenue categories.
(Big “I”, August 12, 2026.) The study covers agencies that qualified as 2025 Best Practices agencies, nominated and recognized for outstanding management and financial results, so the figures describe high performers, not the typical agency. Compare yourself with the revenue category that fits you, in the full study, rather than with the range. We found no recent public benchmark we could verify for retention, revenue per employee, carrier concentration or new business mix, so we don’t give numbers for them.
How do KPIs affect what an agency is worth?
Buyers usually price an agency or book from its revenue or EBITDA and adjust for quality: retention, growth, carrier mix and how dependent the book is on one producer or one carrier. The book of business valuation calculator shows how a multiple and revenue combine into a range. A buyer doing due diligence will rebuild your revenue from carrier statements, so unexplained variances between statements and your books lower confidence in every number you show them; see selling an insurance book of business.
Where Lapidar fits
Lapidar is built to produce the input this scorecard depends on: each carrier statement checked line by line against the premium and rate you expect, with missing, underpaid and paid-twice commission flagged and totalled. That gives you a revenue figure you can trust and the commission accuracy KPI as a by-product. Raising issues with carriers stays with you. It is in its founding pilot, it has no customers yet, and we’ll say so until that changes.
Frequently asked questions
What are the most important KPIs for an insurance agency?
A short list most owners can maintain: retention rate, organic growth, EBITDA margin, revenue per employee, new business vs renewal mix, carrier concentration, producer productivity and commission accuracy. Compute each the same way every period.
How do you calculate insurance agency retention rate?
Divide the policies renewed in a period by the policies that came up for renewal, or, weighted by money, renewal commission retained by the commission on policies up for renewal, both at the prior term’s rates.
What is a good organic growth rate for an insurance agency?
The Big “I”/Reagan Consulting 2026 Best Practices Study update reports organic growth rates ranging from 6.2% to 10.2% across revenue categories for selected high-performing agencies. Those are not averages for all agencies.
What is commission accuracy?
Commission received divided by commission expected from your schedules, per carrier and month, together with the dollars of missing, underpaid and duplicate commission found when statements are reconciled against the book.
For more sourced benchmarks, including the Best Practices figures above with their selection-bias caveat, see our list of independent insurance agency statistics (2026).
Sources
- Big “I” (Independent Insurance Agents & Brokers of America), Big ‘I’ and Reagan Consulting Release 2026 Best Practices Study Update, August 12, 2026. Retrieved October 12, 2026.
Lapidar is commission reconciliation software for independent insurance agencies, in its founding pilot. Related: agency commission accounting · starting an agency: the commission side · increasing revenue without new clients · book of business.