Insurance Agency Economics: Commissions, Retention, Book Value & Producer Pay
Compute new vs renewal commission by line, turn written premium into revenue, measure retention and rounding, project the book of business, pay producers with splits and validation, calculate contingency bonuses from loss-ratio tiers, build the agency P&L and EBITDA, and value the agency with multiples and an earnout, with every cell checked as you go.
The first lesson is free — no account needed.
About this course
An insurance agency economics course that runs the numbers of one fictional independent agency, Harbor & Pine Insurance Agency, in a spreadsheet, for agency owners, producers, account managers, agency M&A analysts and insurance students. You calculate new and renewal commission by line of business and the share of recurring revenue, turn written premium into net revenue after return commission, measure retention by policies per household, roll the book of business forward five years, pay producers with new and renewal splits and a validation test, look up contingency bonuses by loss ratio tier with XLOOKUP, build the agency P&L with adjusted EBITDA, and value the agency with revenue and EBITDA multiples and a retention-based earnout. Fictional agency, illustrative commission rates and multiples, with no affiliation with any carrier or regulator. Not financial or legal advice. The first lab is free.
Lessons
- New vs Renewal Commission by Line of BusinessFree
- Written Premium to Agency Revenue Pro
- Policy Retention and Account Rounding Pro
- Book of Business Growth Projection Pro
- Producer Compensation: New vs Renewal Splits and Validation Pro
- Contingency and Profit-Sharing Bonus: Loss Ratio Tiers Pro
- Agency P&L and EBITDA Margin Pro
- Agency and Book Valuation: Multiples and an Earnout (Chart) Pro