This article was written by our expert who surveys the insurance industry and constantly updates the business plan for an insurance agency.
Policy retention tells you what share of expiring policies you keep at your insurance agency.
In October 2025, top-performing agencies commonly sustain 93%–95% retention, while the broader market averages about 84%–85%. The gap is explained by disciplined renewal workflows, cross-selling, and consistent client contact.
If you want to dig deeper and learn more, you can download our business plan for an insurance agency. Also, before launching, get all the profit, revenue, and cost breakdowns you need for complete clarity with our insurance agency financial forecast.
Below is a fast snapshot for founders: benchmarks, definitions, and execution levers to lift retention in an insurance agency. Use it to set monthly goals and spot where you’re leaking renewals.
Targets should be explicit by line, tenure, and channel—then backed by measurable actions (pre-renewal outreach, bundling, and service SLAs).
| Topic | Benchmark | How to Measure | Execution Cue |
|---|---|---|---|
| Overall retention (agency) | 84%–85% avg; 93%–95% top | Renewed policies ÷ expiring policies (monthly & rolling-12) | Weekly renewal huddles; chase every “no-touch” expiring |
| By line (auto/home/life/commercial) | Auto ≈83%; Commercial ≈83%–85%; Life often higher | Separate KPIs per line; attribute changes to pricing events | Bundle aggressively; pre-shop where carriers push high increases |
| First-year vs. multi-year | First-year lowest; multi-year materially higher | Track cohorts by tenure; compare 12-, 24-, 36-month renewal | Post-bind onboarding + 90-day check-in raises year-1 renewals |
| New vs. long-term clients | New business churns more | Flag “new” for extra touches pre-renewal | Assign retention playbook to AM; add service SLAs |
| Bundling effect | +10%–30% retention lift; bundles 30%–50% likelier to renew | Track % of accounts with 2+ policies | Quote companion policy on every remarket/endorsement |
| 12–24 month trend | ~3-pt drop 2022→2023; stabilization in 2024–2025 | Rolling-12 graph; annotate carrier rate actions | Proactive renewal reviews 60–90 days out |
| Channel variance | Agent-led > brokered > online only | Retention by lead source & producer | Invest in human touch for high-premium cohorts |
What is the current overall policy retention rate for the agency?
Top-performing insurance agencies operate at 93%–95% retention, while the market average is about 84%–85% in 2025.
Use your monthly and rolling-12 reports to compare your agency against these benchmarks and set a clear numeric target. If you sit below 90%, you are leaving profit and renewal leverage on the table.
A 2-point improvement in retention compounds: fewer remarkets, higher lifetime value, and stronger carrier relationships tied to persistency.
Anchor team incentives to hitting a published retention goal and review exceptions weekly.
We cover this exact topic in the insurance agency business plan.
How is the retention rate defined and calculated in this agency’s reporting?
Retention in an insurance agency is the share of expiring policies (or premium) that renew within a period.
Monthly formula: renewed policies ÷ expiring policies. Rolling-12 formula (policy-count version): (expiring over 12 months − new business) ÷ [(expiring + canceled in 12 months) − new business].
Always standardize on policy-count and premium versions, and clean for rewrites, mid-term cancels, and book transfers so you don’t overstate performance.
Automate the report so producers see line-level retention weekly and can act on accounts at risk.
It’s a key part of what we outline in the insurance agency business plan.
What is the average retention rate across the industry, and how do we compare?
The broad insurance industry averages about 84%–85% retention, with elite agencies at 93%–95%.
Commercial and auto lines hover near ~83%–85% on average; agencies with strong processes outperform by several points. Comparing your rolling-12 to these figures shows whether issues are systemic or line-specific.
Benchmark quarterly and discuss gaps openly with your carriers to coordinate pre-renewal strategies.
Publish a one-page dashboard so every teammate knows the target and the delta to goal.
You’ll find detailed market insights in our insurance agency business plan, updated every quarter.
How does the retention rate vary by line (auto, home, life, commercial)?
Retention varies materially across insurance lines in an agency, so manage targets separately.
| Line | Typical Retention | What Drives It & How to Improve |
|---|---|---|
| Personal Auto | ≈83% (volatile) | Rate increases spur shopping; mitigate with pre-renewal calls, telematics options, and multi-policy discounts. |
| Homeowners | Low-to-mid 80s | Cat exposure and underwriting tightenings matter; bundle with auto/umbrella and review coverage gaps early. |
| Life | Often higher | Tenure and perceived value drive persistency; conduct annual needs reviews and ladder coverage as life events change. |
| Commercial P&C | ≈83%–85% | Complexity and multi-line ties help; schedule renewal strategy meetings 90 days out and present options. |
| Commercial Benefits | Mid-80s+ | Value in service calendar (compliance, enrollment support); show multi-year roadmap to reduce churn. |
| Umbrella | High when bundled | Attach to auto/home; small premium with high perceived protection increases stickiness. |
| Specialty/Other | Wide range | Niche markets depend on carrier appetite; maintain alternative markets and educate clients on pricing cycles. |
What has been the retention trend over the past 12–24 months?
The industry saw roughly a 3-point decline from early-2022 to late-2023, with stabilization across 2024–2025.
| Period | Typical Movement | Drivers & Response |
|---|---|---|
| H1 2022 | Flat to slight down | Inflation emerging; start earlier renewal reviews and set pricing expectations. |
| H2 2022 | Down | Rate hardening accelerates; add remarket protocols and retention scripts. |
| H1 2023 | Down further | Carrier capacity tightens; expand market access and coach producers on value framing. |
| H2 2023 | Low point | Peak shopping behavior; implement 60–90 day pre-renewal outreach. |
| H1 2024 | Stabilizing | Process improvements show impact; re-focus on bundling and service SLAs. |
| H2 2024 | Improving | Better retention on multi-policy accounts; track rolling-12 per line. |
| 2025 YTD | Slightly up | Maintain cadence: renewal meetings, options, and proactive account rounding. |
What percentage of clients renew after the first year vs. after multiple years?
First-year policyholders are the most likely to churn in an insurance agency, while multi-year clients renew at much higher rates.
| Tenure Cohort | Indicative Renewal | What to Do |
|---|---|---|
| New clients (year 1) | Lowest | Onboard immediately; 30/90-day check-ins; confirm discounts and coverage alignment. |
| Year 2 | Improving | Offer a second line (bundle) and set service calendar. |
| Years 3–4 | High | Annual review + account rounding; add umbrella where suitable. |
| 5+ years | Very high | Focus on proactive claims support and periodic market checks to reaffirm value. |
| Life policy tenure | Often higher | Tie reviews to life events (mortgage, children, retirement planning). |
| Commercial multi-year | Strong | Multi-line strategy meetings and multi-year program design increase stickiness. |
| Bundled households | Highest | Protect bundle discounts; avoid coverage fragmentation across carriers. |
How do retention rates differ between new business and long-term clients?
New business in an insurance agency retains worse than established accounts.
Freshly acquired clients are more price-sensitive and less engaged; they have not yet experienced your service cycle. Long-tenured clients benefit from established trust and bundled discounts.
Flag all first-year renewals for extra touches, and measure producer-level performance on new-business retention separately from the overall book.
Where possible, transition new accounts to a dedicated service team after 30–60 days to stabilize the relationship.
This is one of the strategies explained in our insurance agency business plan.
What role do cross-sold or bundled policies play in improving retention?
Cross-selling and bundling materially increase insurance agency retention.
Bundled accounts are 30%–50% more likely to renew; systematic cross-sell programs typically lift retention 10%–30%. Customers avoid the hassle of splitting coverage and losing multi-policy discounts.
Operationalize this by quoting a companion line on every new sale, remarket, and endorsement, and by setting bundle targets per producer.
Track % of two-plus-policy households and tie incentives to account rounding.
Get expert guidance and actionable steps inside our insurance agency business plan.
What are the main reasons customers do not renew with the agency?
- Premium increases without proactive explanation or alternatives presented.
- Perceived poor service or lack of contact before renewal decisions.
- Price shopping via online channels exposing lower quotes.
- Coverage misalignment discovered at claim or review time.
- Life changes (move, asset sale, carrier appetite shift) not addressed early.
How do retention rates differ by sales channel (agents, brokers, online)?
Insurance agency retention varies by how the client was acquired and served.
| Channel | Indicative Retention | What Improves Outcomes |
|---|---|---|
| Agent-led (in-house producers/CSRs) | Often 80%+ and higher with regular contact | Service cadence, renewal meetings, consistent relationship ownership. |
| Broker/Wholesale placement | Slightly lower | Set expectations on service roles; maintain backup markets. |
| Online/direct digital | Lower | Add human touch on high-premium accounts; automate reminders and education. |
| Referral-based | Higher than average | Leverage social proof; protect NPS with fast issue resolution. |
| Lead-marketplace | Variable, often lower | Stricter qualification and onboarding to reduce early churn. |
| Carrier reassignment | Mixed | Immediate welcome outreach; explain your service model clearly. |
| Community events | Solid | Ongoing local presence; periodic value touches beyond renewals. |
What specific retention strategies are in place, and what impact have they had?
Winning insurance agencies use a repeatable retention playbook with measurable lifts.
| Strategy | Measured Impact | How to Execute |
|---|---|---|
| 60–90 day pre-renewal outreach | +2–4 pts | Calendarized calls/emails, price expectation setting, alternate quotes ready. |
| Account rounding (bundling) | +3–8 pts | Quote companion line on every touch; producer targets and SPIFFs. |
| New-client onboarding & 90-day check | +3–6 pts (year-1) | Welcome packet, benefits review, discount audit, follow-up call. |
| Service SLAs & NPS loop | +1–3 pts | Same-day response, claim advocacy, closed-loop on detractors. |
| Producer/CSR retention scorecard | +1–2 pts | Weekly leaderboard by line and tenure, coach outliers. |
| Proactive remarketing policy | Customer-saving | Remarket thresholds (e.g., >12% increase) with documented approvals. |
| Education drip (pricing cycles) | Churn reduction | Explainers on inflation, losses, and options; builds trust. |
What is the projected retention rate for the upcoming year?
Given stabilization and better renewal processes, many insurance agencies project 84%–95% retention next year depending on execution.
Assume conservative flat retention if processes are immature; assume +1–3 points if your pre-renewal, bundling, and service SLAs are already in motion. Build scenarios by line because auto and homeowners remain price-sensitive.
Share the projection with producers and carriers, then track monthly vs. plan using rolling-12 to smooth volatility.
Tie producer compensation to retention quality as well as new business to prevent growth masking churn.
This is one of the many elements we break down in the insurance agency business plan.
How should we compare ourselves to the market each month?
Use a simple, agency-wide retention scorecard to compare against market benchmarks every month.
Include overall retention, by-line retention, first-year retention, bundled vs. single-policy retention, and channel retention. Overlay notes on carrier rate actions and your remarket decisions.
Hold a 30-minute monthly review to assign owners to each gap and to confirm next actions for at-risk segments.
Close the loop by publishing an internal summary so everyone understands where the agency stands.
We cover this exact topic in the insurance agency business plan.
What reports do we need in the AMS/CRM to keep retention high?
Insurance agencies need standardized, auto-refreshed reports to prevent retention drift.
Core reports: expiring in 90/60/30 days (with last contact date), accounts without bundle, first-year cohort list, and producer/CSR retention by line. Each should be filterable and exportable.
Tag every policy with tenure, bundle count, and channel so you can sort and act in minutes rather than days.
Schedule weekly workflows and SLAs so nothing ages out without a touch.
It’s a key part of what we outline in the insurance agency business plan.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are encouraged to consult with a qualified professional before making any investment decisions. We accept no liability for any actions taken based on the information provided.
Want to go further?
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Sources
- Agency Performance Partners — Insurance Policy Retention
- Agency Brokerage — The Value of Customer Retention
- Nationwide Agent Blog — Technology & Client Retention
- Vena — Average Customer Retention Rate by Industry
- Exploding Topics — Customer Retention Rates
- Carrier Management — Auto Insurance Retention & Market Pressures
- IAIS — Global Insurance Market Report 2024
- Pragmatic Institute — First-Year Renewal Dynamics
- SalesCloser — Automating Insurance Cross-Sell
- Glassbox — Insurance Customer Retention Strategies
- How to Open an Insurance Company
- Insurance Agency Business Plan: Template & Guide
- How Much Does It Cost to Start an Insurance Brokerage?
- Start an Insurance Company with Little Money
- How Much Does an Insurance Agency Cost?
- Cost to Start an Insurance Agency: Full Breakdown
- Growth Strategies for Insurance Agents
- Insurance Agency Profitability: What to Expect
- Customer Acquisition for Insurance Agencies
- Insurance Agency Market Trends in 2025