What is retention mean in insurance?

Insurance companies use the term retention when they talk about the portion of the premium they keep once a policy has been paid in full. For example, if you pay $500 in monthly premium and your policy has a $500 deductible, your insurer will keep $500.

What does retention mean in insurance industry?

retention is a term in the insurance industry that refers to the amount of money an insurance company keeps in reserve for each policy. The amount of money an insurance company keeps in reserve is usually a percentage of the total premiums they receive. In other words, the more policies an insurance company has written in the past, the higher their percentage of reserve. The idea behind this is that if a lot of policies go to claims, that would require the company to take out more money from their operating budget.

What does retention mean in insurance quotes?

When you provide insurance quotes to clients, you present them with a list of your rates based on their unique circumstances. The process of retaining them, then, is to make sure these clients stay with you long-term. If you’ve made a good connection with them and provided them with great service, you can expect them to renew with you each year and even recommend you to their family and friends.

What is the meaning of the term retention mean in insurance?

Let’s start with the basics. Retention is the period of time that you keep an insurance policy in effect after you pay the initial premiums. You could lose your coverage if you don’t pay your premiums. While some insurance companies automatically renew your policy at the end of your policy period, many others allow you to cancel the policy. It’s important to understand your policy terms, especially if you’re planning to sell or transfer your insurance.

What does retention mean in insurance?

It's all about the length of time that you retain a customer. The length of time you retain the customer has a direct correlation to your profitability. The longer you retain a customer, the more profitable your business is.