Business Net Retention

What Does Business Net Retention Mean?

Business Net Retention refers to the number of policies an insurance company retains in its account, excluding those that have lapsed, been canceled, or transferred to a reinsurer.

Insuranceopedia Explains Business Net Retention

Business net retention is an indicator of an insurance company’s strength. It reflects the company’s ability to retain a significant number of policies in its account while effectively managing the risks associated with holding them, without relying on reinsurance. Businesses comparing business insurance providers often weigh financial strength, and net retention is one of the figures rating agencies look at.

Business net retention is calculated by dividing the number of net premiums by the number of gross written premiums. Net premiums are those the company retains after deductions, while gross written premiums represent the total premiums before any deductions, including the cost of reinsurance.