Insurance Agency monthly financial report
An agency report should start with retention. Renewal commissions are most of next year's revenue, so a small slip in retention is a big slip in cash.
The six numbers for an insurance agency
| Number | How to work it out | What it warns you about |
|---|---|---|
| Retention on renewals | Policies renewed ÷ policies up for renewal | Next year's revenue, a year early |
| Commission per policy | Commission revenue ÷ policies in force | Mix shifting toward small accounts |
| New business, share of commission | New commission ÷ total commission | Whether the book is growing |
| Producer pay, share of revenue | Producer pay ÷ commission revenue | Producers costing more than they write |
| Commissions receivable | Commission earned, not yet paid by carriers | Carriers paying later than usual |
| Weeks of costs in the operating account | Operating cash ÷ weekly costs | Your cushion, with trust money left out |
Use these six in place of the general ones on the template's Report tab.
What to watch in an insurance agency
- Retention by line of business
- Commission checks arriving later than usual from a carrier
- Producer pay against the new commission it produces
Not sure how much cash you should hold? Use the insurance agency cash calculator.
Get this done for you every Monday
One Page CFO reads your QuickBooks, builds your 13-week cash forecast and your one-page report, and a CFO checks both. $500 a month.