Markup and margin measure the same profit from different angles. Markup is profit divided by cost. Margin is profit divided by price. A 50% markup equals a 33% margin. Confusing the two leads to underpricing: if you need a 40% margin and apply a 40% markup instead, you're actually running at 28.6% margin and leaving money on the table.
Markup & Margin Calculator for Insurance Agency
Pre-filled with real insurance agency industry benchmarks
Insurance agencies do not set the price of the product they sell, which makes the margin conversation different from most businesses. Your commission is a fixed percentage of the premium set by the carrier. However, you absolutely control your effective margin through product mix, cross-selling, and operational efficiency. A personal auto policy with a $1,200 annual premium at 12% commission earns you $144. If it takes you 3 hours to quote, bind, and service that policy in year one, your effective hourly rate is $48. But a commercial package policy with $15,000 in premium at 15% commission earns $2,250, and it might take 5 hours of work, yielding $450/hour. The markup concept for agencies is about maximizing revenue per hour of work through smart product focus and cross-selling. Every additional line you sell to an existing client (auto, home, umbrella, life) increases your commission with near-zero additional acquisition cost. This calculator helps you see how different product mixes and cross-sell rates affect your overall agency margins.
Markup & Margin Calculator
Pre-filled with insurance agency industry defaults. Edit any field to use your real numbers.
Markup
1900.0%
Margin
95.0%
Profit
$380
Insurance Agency industry average: 95.0% margin (5.0% COGS).