InsuranceAgencyTools

Agency Revenue Calculator

Project book revenue across three years at a given retention rate, and see how many new policies are needed just to stand still.

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Free · No sign-up · Runs in your browser

A book of business is not a static asset. It loses policies every year, and the number it loses is decided by retention - a figure most agencies can quote and few model properly.

This calculator projects the book forward three years at your retention rate and reports the number of new policies required simply to replace what is lost, which is the honest baseline before any growth target is set.

Your numbers

Results update as you type. Nothing is sent anywhere.

Result

Year 1 revenue

$208,800

Year 3 revenue

$199,143

Three-year total
$611,523
Current premium volume
$1,740,000
Revenue per policy
$174.00
Policies lost per year
180
Revenue at risk each year
$31,320
New policies needed to stand still
180

Retention is the single biggest lever in this model: the new policies needed just to stand still equal the ones lost each year.

All figures come from the inputs you entered. They are a planning model, not a forecast.

Three-year projection at the retention rate entered

YearPolicies in forcePremium volumeCommission revenue
11,200$1,740,000$208,800
21,170$1,696,500$203,580
31,144.5$1,659,525$199,143

How to use the agency revenue calculator

  1. Enter the current policy count and the average premium per policy.
  2. Enter the commission rate you earn on that premium.
  3. Enter your retention rate - the percentage of policies that renew each year.
  4. Enter new policies written per year, then read the three-year projection.

What people use this for

  • Setting a realistic new business target for the year.
  • Quantifying what a retention improvement is actually worth.
  • Valuing a book of business for a purchase or a succession plan.
  • Explaining to a team why service work protects income.

Worked examples

Every figure below is produced by running this calculator against the example inputs, so the numbers always match the tool.

A book at 85% retention

1,200 policies at $1,450 average premium, 12% commission, 85% retention, 150 new policies a year.

Year 1 revenue
$208,800
Year 3 revenue
$199,143
New policies needed to stand still
180

The same book at 92% retention

Identical in every respect except that fewer policies leave each year.

Year 3 revenue
$226,840
Three-year total
$653,836
Revenue at risk each year
$16,704

Retention is the highest-leverage number in an agency

Moving retention from 85% to 90% on a 1,200-policy book saves sixty policies a year, every year, compounding. Writing sixty extra new policies costs marketing spend, quoting time and acquisition effort; retaining them costs a service call.

The revenue-at-risk figure in the results is the annual commission attached to the policies leaving. For most agencies it is larger than the entire marketing budget.

Standing still is a target in itself

The break-even new policy figure is what it takes to end the year the same size as you started it. Anything below that is a shrinking book regardless of how busy the year felt.

It is worth calculating before setting a growth target, because a growth target that ignores attrition is not a target - it is an aspiration with arithmetic missing.

Methodology and assumptions

What this calculator does, and what it deliberately does not do.

  • Each year the policy count is multiplied by the retention rate and increased by the new policies written.
  • Revenue is policies × average premium × commission rate. Premium and commission rates are held constant.
  • These are planning figures based on your assumptions, not a forecast of market conditions.
  • All figures are estimates produced from the values you enter. This site has no rate feed and no carrier data, so it cannot quote or price a policy.
  • Nothing you type is transmitted or stored - the calculation runs entirely inside your browser.

This calculator provides an estimate based on the information you enter. Actual insurance premiums, coverage, eligibility and pricing vary by provider and individual circumstances.

This website is not an insurance company, an insurance agency or a licensed broker. It does not sell insurance, does not provide insurance quotes, and is not authorised to give advice about which policy you should buy.

No result produced here is an offer of insurance or a guarantee of coverage. Only a licensed insurer or agent, working from your verified details, can quote or bind a policy.

Frequently asked questions

How do I calculate retention?

Policies in force at the end of the year divided by policies that were up for renewal during it, excluding new business. Most agency management systems report it.

What is a good retention rate?

It varies enormously by line, market and service model. The useful comparison is against your own previous year rather than against an industry figure.

Does this account for premium increases?

No. Average premium is held constant so the effect of retention is visible on its own. Model rate changes separately.

Can I use this to value a book?

It gives a revenue projection, which is one input into a valuation. Actual valuations also consider loss ratios, mix, carrier relationships and transferability.

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