Free tool · Runs in your browser
Client retention value calculator
What one more point of retention is worth in commission over three and five years, and in book value at your own multiple. You enter the book and the rates; nothing is assumed about what is typical.
- Annual commission today
- $360,000
- Kept next year at today’s rate
- $316,800
- Lost to non-renewal
- −$43,200
- +1 point, over 3 years
- +$18,431
- +1 point, over 5 years
- +$39,455
- Target vs now, over 3 years
- +$75,318
- Target vs now, over 5 years
- +$164,615
- Book value today
- $720,000
- Book value of +1 point
- +$7,200
- Value in 3 years: now / target
- $490,660 / $560,655
Runs in your browser. Nothing is uploaded or saved.
What this calculator does
Retention is the share of clients or policies that renew. Each point of it is commission you keep without selling anything, and because the clients you keep this year can renew again next year, the effect compounds. The calculator follows today’s book forward on its own, with no new business, so you can see what retention alone is worth.
commission kept in year y = clients × average commission × retentiony
value of a change = sum over the years at the new rate − sum at today’s rate
book value = remaining annual commission × your multiple
It has no built-in benchmarks. Retention is measured in different ways, by policy, by client or by commission, and a rate quoted without its method can’t be compared with yours. Our guide to agency KPIs explains a commission-weighted way to measure it.
Worked example
The figures are an example, not a typical agency. A book of 800 clients averaging $450 of commission a year earns $360,000. At 88% retention it keeps $316,800 next year and loses $43,200. One more point of retention, 89%, adds about $18,431 of commission over three years and about $39,455 over five. Reaching a 92% target adds about $75,318 over three years and $164,615 over five. At an example multiple of 2 times revenue the book is valued at $720,000 today; one more point of retention keeps $3,600 more revenue a year, which at that multiple is $7,200 of value. After three years with no new business, the book would be worth about $490,660 at 88% retention and $560,655 at 92%.
What the calculator leaves out
- New business and rate. Real books add clients and see premiums change at renewal. Leaving them out isolates retention; it doesn’t forecast revenue.
- Which clients leave. An average hides mix. Losing one large commercial account can cost more than losing many small personal policies. If your book is uneven, run the calculator per line or per segment.
- Renewal rates. Renewal commission is often paid at a different rate than new business. Use the commission a retained client actually pays at renewal.
- Discounting and deal terms. Future commission is not discounted, and the book value uses a plain revenue multiple. Buyers may adjust the multiple itself for retention; that is not modelled.
Retention you can show
A retention rate is only as good as the renewal records behind it. A policy that renewed but whose renewal commission never arrived counts as kept in your agency system and is still lost money. Our guides on missing renewal commissions and increasing agency revenue without new clients cover where retained revenue leaks. For what retention does to a sale price, see selling a book of business.
Illustrative only. General information, not valuation, accounting, legal or tax advice.
Questions
How much is one point of retention worth to an insurance agency?
It depends on the size of the book and its current rate. In a closed book, one more point keeps 1% of annual commission in the first year, and more in later years because retained clients can renew again. The calculator adds those years up for three and five years.
What is a good retention rate for an insurance agency?
We don’t publish a benchmark. Retention is measured by policy, by client or by commission, and figures quoted without their method can’t be compared. Track your own rate the same way every period and compare it with itself.
How does retention affect what my book is worth?
If a book is valued as a multiple of annual commission revenue, revenue that doesn’t renew takes its share of value with it. The calculator multiplies the commission kept by the multiple you enter. Buyers may also change the multiple itself for retention, which the calculator does not model.
Why does the calculator ignore new business?
To isolate retention. With new sales mixed in, a book can grow while losing clients. Treat the results as the value of keeping what you have, not as a revenue forecast.
Can I put this calculator on my website?
Yes. The page has an embed code for an iframe that keeps a visible Powered by Lapidar link. It runs in the visitor’s browser and sends nothing anywhere.
Does this calculator store or send my numbers?
No. The calculation runs in your browser. Nothing is uploaded, saved or tracked.