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Renewal Increase Calculator Calculate the percentage renewal increase and split it into exposure growth and pure rate change.
How the renewal increase calculator works A renewal increase has two possible causes: the business got bigger (exposure) or the price per unit went up (rate). Separating them is the most useful conversation you can have with a client about a renewal.
Formula Change % = Renewal ÷ Expiring − 1. Rate change = (Renewal ÷ Renewal exposure) ÷ (Expiring ÷ Expiring exposure) − 1.
How to use it Enter the expiring and renewal premiums. Optionally enter expiring and renewal exposure. Review the dollar and percentage change and its split. Worked example $18,200 to $21,150 is a 16.2% increase. Exposure grew 8.6%, so the pure rate increase is about 7.0%.
Frequently asked questions How should I explain a renewal increase to a client? Show how much comes from their own growth and how much from rate. Rate increases can then be tied to market conditions or loss history.
What if exposure fell but premium rose? Then the rate increase is larger than the premium increase — usually a sign of loss experience or a hard market.
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