Industry

Research Tier 2 Recurring Compounder

Commercial P&C Insurance

An independent agency’s value lives in two numbers: retention and policies per account. AI is the first technology that moves both without adding headcount.

Books of recurring commission revenue where a handful of operating ratios decide both the earnings and what the book sells for — and where service capacity, not demand, is the binding constraint.

Industry research

The economics

86% typical retention, the double lever Each point of retention raises EBITDA and the book’s valuation simultaneously — the rare number that compounds twice.
2.0 policies per account, the norm Account rounding is the cheapest growth in the industry: the client already trusts the agency; the second policy is a workflow, not a sale.
Lockstep revenue-per-FTE and comp, broken Agency economics have historically scaled headcount with revenue; instrumented service work is the first structural break in that ratio.

FIGURES FROM THE FIRM’S PUBLISHED RESEARCH · SOURCES ON REQUEST · THE 2× PLAYBOOK

Growth opportunities

Where the 2× lives

  1. Retention engineering

    Renewal work moved from reactive to instrumented: exposure changes surfaced early, remarketing triggered by rule, every at-risk account flagged before the lapse. Retention becomes a managed number.

  2. Account rounding as system

    Coverage-gap analysis run across the whole book by machinery, with producers working a ranked queue instead of a memory.

  3. Service automation

    Certificates, endorsements, and renewals run themselves to the point of judgment; the account manager signs. That is the capacity that turns a service bottleneck into cross-sell throughput.

  4. Producer comp design

    Compensation rebuilt to pay for the behavior the economics reward — rounding and retention, not just new logos.

Our perspective

What most firms get wrong

New logos on a lapsing book

New-business energy on an 86%-retention book is running up a down escalator. The agencies that instrument renewal and rounding first grow faster with the same producers — and their books price at a premium when they sell.

Where we’d start

A book decomposition: retention and policies-per-account by segment, the at-risk accounts flagged by rule, and the two-number improvement plan priced twice — once in EBITDA, once in what the book sells for.

Put it to us