https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3ARetention_ratio 2026-06-13T21:51:03Z Revision history for this page on the wiki MediaWiki 1.43.8 https://www.insurerbrain.com/w/index.php?title=Definition:Retention_ratio&diff=11768&oldid=prev 2026-03-12T00:30:42Z

<p>Bot: Creating new article from JSON</p> <p><b>New page</b></p><div>📊 &#039;&#039;&#039;Retention ratio&#039;&#039;&#039; in the insurance context most commonly measures the proportion of [[Definition:Premium | premium]] or policies that an insurer keeps — whether that means the share of [[Definition:Gross written premium | gross written premium]] retained after [[Definition:Ceded premium | ceding]] to [[Definition:Reinsurance | reinsurers]], or the percentage of [[Definition:Policyholder | policyholders]] who [[Definition:Renewal | renew]] their coverage. Both interpretations are widely used, and the intended meaning usually depends on whether the discussion centers on [[Definition:Underwriting | underwriting]] strategy and capital management or on distribution performance and customer loyalty.<br /> <br /> 🔍 On the reinsurance side, the retention ratio is calculated by dividing [[Definition:Net written premium | net written premium]] by gross written premium. A ratio of 80 percent, for instance, means the insurer cedes 20 percent of its premium volume to reinsurers and retains the rest. Analysts at [[Definition:Rating agency | rating agencies]] and investment firms use this metric to gauge how much [[Definition:Risk | risk]] an insurer is shouldering directly. When used in its customer-retention sense, the ratio is computed by dividing the number of renewed policies by the number of policies eligible for renewal, offering a straightforward snapshot of [[Definition:Book of business | book-of-business]] stability across an [[Definition:Insurance agency | agency]] or carrier.<br /> <br /> 📈 Regardless of which definition applies, a deteriorating retention ratio warrants attention. A declining premium retention ratio may signal that an insurer is purchasing more reinsurance — perhaps in response to worsening [[Definition:Loss experience | loss experience]] or tightening [[Definition:Capital adequacy | capital requirements]] — which compresses net margins. A falling policy retention ratio points to competitive pressure, pricing issues, or [[Definition:Claim | claims]] service shortcomings that are driving customers away. In either case, tracking the trend over time reveals far more than any single snapshot, giving leadership actionable insight into the health of the [[Definition:Combined ratio | combined ratio]] and the durability of revenue streams.<br /> <br /> &#039;&#039;&#039;Related concepts:&#039;&#039;&#039;<br /> {{Div col|colwidth=20em}}<br /> * [[Definition:Retention (insurance)]]<br /> * [[Definition:Retention (customer)]]<br /> * [[Definition:Net written premium]]<br /> * [[Definition:Ceded premium]]<br /> * [[Definition:Gross written premium]]<br /> * [[Definition:Loss ratio]]<br /> {{Div col end}}</div>

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