Calculating retention

[jtharpo]

Currently I use the formula:

1- ((cancellations)/(renewals+rewrites+cancellations))= retention rate


Is this what you use?

[InsMgmt]

JT,

For a simple and quick ratio calculation I suppose the following works best for me:

Starting Policy Count minus Cancellations/Nonrenewals divided by Starting Policy Count

5000 - 500 / 5000 = 9 or 90%

But, then I'm no math whiz. I'm sure there are more sophisticated formulas out there. The ones which factor in client frustration levels, CSR coffee breaks, Producer bad breath and the like.

[scott]

INsMgt has it right.

However, what are you trying to measure?

Many agents use retention as a measure of success. Its only a part of the picture.

Revenue growth %
Revenue per account
Revenue per policy
Avg policies per account
New business revenue
Avg new business rev. per policy
Revenue per employee
Revenue per producer

You can separate the above into PL and CL

Most agents find that 20% of their accounts generate 80% of their income.
What accounts represent 80% of your profits?

Most agents find that 20% of their accounts generate 80% of the work.
What accounts in that list are so needy that you lose money on them?

Where are you making money? Where are you losing money?