An agency that places 40% of its premium with one carrier has a relationship worth having and a dependency worth pricing. The contingent commission that relationship earns may be a large part of the agency's income; the appointment may not transfer on the same terms; and one carrier's appetite change can move a sizeable piece of the book.
This post stays with the illustrative Prairie Lantern Insurance Group, where one invented carrier, Quillmark Mutual, writes 40.2% of premium and the top three carriers write 74.2% of $22.78M. Carrier names here are invented for the demo.
| Actors | Deal lead, practice leader, the acquirer's carrier-relations team |
|---|---|
| Trigger | Analyze at the analysis stage |
| Agency Illustrative | Prairie Lantern Insurance Group — top carrier 40.2% of premium |
| Agents involved | Concentration analyst, carrier mapping agent, revenue quality analyst, supervisor agent |
| Controls that fire | CARRIER_CONCENTRATION (one carrier over 35% of premium — refer), UNAPPOINTED_CARRIERS (over 20% of premium with carriers the acquirer isn't appointed with — warn) |
| Decisions and authority | Appointment requests (deal lead), the sign-off (practice leader) |
| Outcome | The dependency and the contingent agreement checked before pricing; appointments requested for the gaps |
| What is measured | Carrier shares of premium; top-three share; premium by appointment status; contingent income by carrier |
Premium for concentration, revenue for value
Carrier concentration is measured on premium — what the carrier writes — because that is what an appetite change moves. Producer and client concentration are measured on revenue, because that is what an acquirer buys. The engine keeps both and every finding says which it used.
over 35%?"} T -->|"40.2%"| CC["CARRIER_CONCENTRATION
refer"] P --> A["Against the acquirer's
appointments"] A --> U{"Not fully appointed
over 20%?"} U -->|"22.4%"| UA["UNAPPOINTED_CARRIERS
warn"] B --> CI["Contingent income
by carrier"] CC --> Q["Questions for the seller:
contingent agreement,
appointment transfer"] CI --> Q style CC fill:#fdecec,stroke:#e57373 style UA fill:#fff4e2,stroke:#f4a03a
Step by step
Quillmark Mutual writes 40.2% of premium; the top three write 74.2% of $22.78M. Cited to 530, 244 and 139 rows.
22.4% of premium sits with carriers the acquirer isn't fully appointed with: two appointed in some states, three not appointed.
CARRIER_CONCENTRATION refers to the practice leader: check the appointment and the contingent agreement before pricing.
Is the contingent agreement with the dominant carrier assignable? What did it pay in each of the last three years? Does the appointment survive a change of control?
Accepting the carrier mapping agent's prepared decision records the requests for a person to send.
Answered on the decision record, with what the seller said about the contingent agreement.
What the seller is asked
| Question | Why it matters to the price |
|---|---|
| Is the contingent agreement with the dominant carrier assignable? | If not, the contingent income it pays is not part of what is being bought. |
| What has it paid in each of the last three years? | Contingent commission moves with the carrier's loss ratio; one good year is not a run rate. |
| Does the appointment survive a change of control? | A new appointment can take weeks; renewals do not wait. |
| Has the carrier signalled an appetite change in the agency's main classes? | 40% of premium can move with one underwriting guideline. |
| Agent | What it prepared | What it cites | Who decides |
|---|---|---|---|
| Concentration analyst | Quillmark Mutual writes 40.2% of the book's premium; the top three write 74.2% | 530, 244 and 139 book rows | Deal lead |
| Carrier mapping agent | 22.4% of premium with carriers the acquirer isn't fully appointed with; appointment requests prepared | Rows per carrier; the acquirer's appointments by state | Deal lead |
| Supervisor agent | Practice leader sign-off: three controls fired | The controls | Practice leader |
| Section | Hit | Outcome |
|---|---|---|
| Carriers | CARRIER_CONCENTRATION: top carrier 40.2% of premium | refer |
| Carriers | UNAPPOINTED_CARRIERS: 22.4% of premium | warn |
| Key people | KEY_PRODUCER: top producer 32.0% of revenue | refer |
For the deal team
The carrier questions go to the seller with the shares and the rows behind them, not as a generic checklist.
For IT
The acquirer's appointments are a table keyed by carrier and state; the overlap is a join, recomputed on every Analyze.
For corp-dev leadership
A dependency on one carrier is priced knowingly, with the contingent terms in the data room and a sign-off on record.
Questions we get asked
Are the carrier names real?
No. Every carrier in the demo book is invented. Your deployment uses your appointment data.
Can the threshold be per region?
A rule can be scoped by state in Rules Studio; the shipped control applies everywhere.
Keep reading
A messy book export, from a seller in a hurry
5,204 rows, 316 issues, and a request to the seller drafted from the rows.
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How InsightRollup connects to the rest of the suite
Pulse 360 for who the companies are; Placement, Proofing and Advocate for the book after close.
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Putting your first acquisition through it
One closed deal you know well, re-run — then the live one.
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