Insurance Retention Rate Benchmarks 2026: By Line, Channel and Renewal Method

Is an 85% retention rate good for an insurance business?

It depends on what the business is retaining. Customers, individual policies, renewal premium and agents are different populations. The same organisation can report a different percentage for each - and all of those figures can be correct.

Goosehead Insurance offers a useful example. For 2025, it reported 85% client retention and 90% premium retention. Premium increases and additional coverages helped explain the difference. Source: Goosehead’s 2025 Form 10-K

For insurers setting targets in 2026, the priority is to compare the same measure, over the same period, for a similar book of business. This guide brings together published insurance retention rate benchmarks, customer research and a practical framework for measuring renewal performance.

What is the insurance industry average retention rate?

The public sources reviewed for this article do not establish one comparable average retention rate for the insurance industry across all lines, channels and markets.

Instead, they provide three useful kinds of evidence:

• Company operating disclosures: reported customer, policy or premium retention for a defined business.
• Customer surveys: intentions to renew, shopping behaviour and experiences associated with loyalty.
• Renewal-method research: information about how existing customers renewed, including automatic renewal and active instructions.

Use each for the question it can answer. A company’s reported renewal performance can inform a peer comparison. A survey can reveal where customers are becoming dissatisfied. The percentage of renewers using automatic renewal describes a process, rather than the proportion of all customers who stayed.

This is particularly relevant when using insurance customer retention statistics in board presentations. An attractive number becomes much less useful when its denominator disappears from the slide.

Insurance retention rate benchmarks by line of business

Travelers publishes retention statistics across several domestic business groups. Its second-quarter 2026 disclosures provide a current example of how retention differs by line and customer segment within one carrier.

Sources: Travelers’ Q2 2026 results and definitions and its Q2 presentation, reproduced by MarketScreener.

Personal Insurance measures expected policies retained throughout an annual policy period relative to available renewal policies. The commercial figures exclude pricing and exposure changes; the Bond & Specialty retention measure excludes surety and other non-recurring project products. Some operating statistics use estimates and can be revised.

These are company examples, not industry averages or a ranking of the lines. The Select and Middle Market rows are components of Business Insurance, so they should not be added to the segment total.

Personal auto and home: separate renewal decisions from portfolio changes

For personal lines, a useful internal comparison groups policies by renewal month, territory, tenure, rate change and distribution source. First-renewal customers deserve their own view because their experience with the insurer is shorter than that of established customers.

Homeowners retention also needs an explanation of insurer-initiated non-renewals and changes in the insured risk. A property sale, a carrier’s appetite decision and a customer leaving after poor service create different operational questions.

Keep those outcomes visible. Otherwise, a single rate can make a service problem look like an underwriting decision - or conceal an underwriting decision inside apparent customer churn.

Commercial insurance: count relationships as well as premium

A commercial account can include several policies and locations. Losing one large account may have a modest effect on account retention and a substantial effect on retained premium.

For that reason, pair account retention with policy retention and premium retention. Segment further where the operating model changes, such as small business packages versus broker-negotiated middle-market programmes.

The objective is to understand which relationships are being lost, how much business they represent and why they are leaving.

Life, health and short-duration products need their own comparisons

For life insurance, compare persistency at the same policy duration and check whether the measure uses policy count or premium. A 13-month measure and a 61-month measure describe different stages of the customer relationship. Deaths, maturities, surrenders and lapses also need consistent treatment.

For health insurance, employer-group retention and individual member retention answer different questions. A member’s departure can reflect an employment or eligibility change rather than a competitive switching decision.

Single-trip travel and other one-off products require another approach: repeat purchase among customers with a new insurance need may be more useful than an annual renewal rate.

Match the measure to the question

For a clearly defined renewal cohort:

Policy renewal retention = policies renewed ÷ policies due for renewal × 100

Suppose 10,000 policies come due during a quarter and 8,700 renew. The renewal retention rate is 87%.

New policies sold during the quarter do not belong in this numerator. Nor should unresolved renewal cases quietly become either successes or failures before the reporting cut-off is defined.

For customer retention, use the original customer cohort:

Customer retention = customers from the opening cohort still active at period end ÷ customers in the opening cohort × 100

A customer with three policies who cancels one may still count as retained at customer level. The policy-level measure will show the lost contract.

Premium growth can conceal customer losses

Consider an illustrative renewal cohort with $10 million of premium. If 90% of its premium is retained before price changes, that leaves $9 million. A uniform 10% increase on the retained business brings the figure to $9.9 million.

The resulting premium comparison is 99%, even though 10% of the original premium base was lost. This example assumes unchanged exposure and no additional coverages or new business.

That does not make premium retention misleading. It makes the definition essential.

Similarly, a six-month renewal rate is not automatically an annual retention rate. Keep policy term and observation period visible in every comparison.

Retention benchmarks by distribution channel

Channel comparisons need to distinguish who owns the continuing relationship: the carrier, the agency or a distribution partner.

Independent agents and brokers

Goosehead’s 85% client retention at December 31, 2025 counted clients who had at least one policy twelve months earlier and still had at least one policy at the measurement date. It is an agency-level relationship measure. Source: Goosehead’s retention definition

For a carrier-side example, Erie Indemnity reported 88.4% year-over-year policy retention at December 31, 2025 for Erie Insurance Exchange and its wholly owned P&C subsidiaries, down from 90.4% a year earlier. Source: Erie Indemnity’s 2025 Form 10-K

Those figures should not be used to rank the two businesses. Their measurement units differ.

An independent agency can retain a customer while placing the renewal with a different insurer. The agency records a continuing relationship; the original insurer loses the business. Both outcomes need to be recognised when setting producer incentives or assessing distribution performance.

Direct and digital channels

J.D. Power reported in May 2026 that 47% of new U.S. auto and home policies were purchased digitally. Its digital experience study also found that average satisfaction with digital servicing fell to 695 out of 1,000, down four points. Source: 2026 U.S. Insurance Digital Experience Study

These are acquisition and experience statistics, rather than a direct-channel retention benchmark. Digital purchase also does not establish that an agent played no role elsewhere in the relationship.

Track acquisition channel and servicing channel separately. A customer may buy online, call about a claim, use an app to update payment details and seek an agent’s help at renewal.

Exclusive agents and embedded partners

For an exclusive-agent operation, compare retention by agency, customer tenure, product mix and service workload. Distinguish customers leaving the insurer from those reassigned within its network after an agent departure.

For embedded insurance, measure the insurance relationship separately from the host product. If a device is replaced, a loan ends or a subscription closes, the insurance policy may end for a reason unrelated to service quality.

The public sources reviewed here do not provide a consistently defined retention ranking across independent, exclusive, direct and embedded channels. A useful internal comparison therefore matches equivalent products and customer cohorts, then investigates differences in their outcomes.

Renewal method benchmarks: automatic renewal versus active renewal

Does automatic renewal improve insurance retention?

To answer that properly, an insurer needs comparable cohorts of policies offered automatic and active renewal, with subsequent cancellations included. The proportion of existing renewers using each method cannot answer the question on its own.

The UK Financial Conduct Authority’s Financial Lives survey provides a useful view of renewal behaviour. Among policyholders who renewed with their existing provider, the 2024 findings were:

Source: FCA Financial Lives 2024, general insurance and protection findings, slide 80. These are shares of renewers, not retention rates. Rows omit other responses, including automatic renewal without prior awareness and “don’t know”, so they do not total 100%.

The variation suggests that renewal communications should reflect the product and customer journey. An active confirmation process and an automatic renewal process need different operational controls.

What to measure for each renewal method

Build a view covering:

• Policies due for renewal and policies offered renewal.
• Renewal method offered and the customer’s recorded choice.
• Notices delivered successfully, including failed deliveries.
• Renewals completed and payment failures.
• Policies still active after a consistent follow-up period.
• Customer cancellations, insurer non-renewals and reinstatements.

A policy that renews automatically and is cancelled shortly afterwards should remain visible in the outcome analysis. Define the follow-up period before comparing methods.

Automatic renewal should come with clear information about price, coverage changes and available choices. Making a customer’s decision easier to understand is a more useful service objective than simply maximising completed renewal transactions.

What the latest customer research says about retention

Customer studies help explain renewal behaviour, provided their findings stay separate from observed retention rates.

In J.D. Power’s 2025 small commercial study, 55% of customers said they definitely would renew, down six percentage points from 2024. That was a measure of intent, rather than evidence that the remaining 45% actually left. The study covered 2,848 customers at businesses with 50 or fewer employees. Source: 2025 U.S. Small Commercial Insurance Study

The 2026 update provides a more recent experience signal: overall small commercial satisfaction rose to 713 out of 1,000, up 15 points. Satisfaction was 750 when both agent and insurer fully understood the customer’s business, versus 547 when neither did. These are satisfaction scores, not percentages retained. Source: 2026 U.S. Small Commercial Insurance Study

The operational implication is to make renewal discussions specific. A conversation about changing payroll, new premises or a new service offering gives an agent something more useful to discuss than a generic reminder that a policy is expiring.

Customers notice when service breaks between channels

In the 2026 U.S. auto study, 21% of customers reported being forced to switch channels for an inquiry. J.D. Power associated these interactions with poorer satisfaction and a lower likelihood of renewing. Just 58% said they completely understood their auto coverage. Source: J.D. Power’s 2026 U.S. Auto Insurance Study

Stephen Crewdson, J.D. Power’s managing director of insurance business intelligence, described the change this way:

“The market has clearly shifted from a pricing crisis to an experience challenge.”

Source: J.D. Power

For a renewal team, this raises a practical question: can the next person helping the customer see what has already happened?

Shared case histories, clear ownership and accessible policy information are sensible areas to test. Measure whether they reduce repeated contacts and improve completed renewals, rather than assuming that any new communication tool will increase retention.

How to improve insurance customer retention

Start with the reasons customers leave, then build a process that responds to those reasons.

1. Separate avoidable churn from other departures

Use consistent categories for price, coverage mismatch, unresolved service issues, payment problems, changed insurance needs and underwriting decisions. Allow an unknown category; an assumed explanation is poor evidence for action.

Review a sample of cancellations against actual correspondence. If every departure is labelled “price”, the categories may be hiding service or coverage problems.

2. Explain the renewal before asking for a decision

Show the new premium, relevant coverage changes and choices the customer can make. For complex commercial business, give the broker enough time to resolve outstanding underwriting questions.

Set policy renewal reminder timing around policy terms, applicable requirements and the time needed to act. There is no single reminder schedule that fits every line or jurisdiction.

3. Give agents a usable view of the account

Bring together renewal dates, open claims, outstanding documents, previous contacts and unresolved billing issues. Assign ownership so a customer does not receive duplicate reminders while waiting for an answer to the original question.

4. Address payment failures early

Distinguish a customer choosing to leave from a customer whose payment did not complete. Make updating payment details straightforward and track which cases are resolved within the relevant policy process.

5. Evaluate the financial result

An illustrative book with 10,000 policies due for renewal retains 500 additional policies if its rate improves from 85% to 90%. That is a five-percentage-point improvement.

The value depends on the expected contribution of those policies, the cost of the retention activity and their subsequent claims experience. Pair retention targets with underwriting and customer outcome measures so teams understand what successful retention means for the business.

How to improve insurance agent retention

An insurance agent retention rate measures whether producers remain with an organisation or distribution network. It is separate from the percentage of their customers who renew.

For a defined recruitment cohort:

Agent retention = agents from that cohort still active at the measurement date ÷ agents originally in the cohort × 100

Specify what active means and compare equivalent durations. Twelve-month retention among new hires should not be compared with four-year retention or the annual retention of an established sales force.

LIMRA’s distribution research maintains separate production and retention studies for different agency models, including career financial professionals and multiple-line exclusive agents. That segmentation is a useful reminder to avoid treating every producer population as interchangeable.

For agency leaders considering how to improve retention of insurance agents, practical areas to review include:

• Early support: clear onboarding, product training and access to experienced colleagues.
• Working conditions: realistic service workloads and fewer repetitive administrative tasks.
• Compensation clarity: understandable commission statements, payment timing and performance expectations.
• Development: coaching and a visible route to greater responsibility or a stronger book.
• Continuity: clear account handovers when producers change roles or leave.

Investigate why agents leave at different tenure stages. Problems in the first few months may require a different response from departures among experienced producers. Track customer outcomes through those transitions as well.

Turn insurance retention rate benchmarks into a repeatable process

The most useful retention report connects a defined cohort to a clear outcome and a reason for that outcome. It should let teams move from a headline percentage to the policies, accounts or producers requiring attention.

Openkoda supports configurable insurance applications for policy administration, partner workflows and reporting. For an insurer or MGA improving renewal operations, those capabilities can provide a basis for connecting renewal tasks, policy information and management reporting around its own process.