September 2026
Ask an agency owner their biggest business risk and they will usually say competition, or a hard market, or hiring. Very few say carrier concentration, and for a lot of agencies it is the largest single exposure they have.
What it is
Concentration is the share of your premium sitting with one carrier. It builds up innocently. A carrier is easy to work with, their appetite fits your market, the underwriter answers the phone. So you send them more. Five years later they are 45% of your book and nobody ever made that decision.
What it costs when it moves
None of these is unusual and all of them are decided without you:
- A rate action. Fifteen percent across the book, and you are re-marketing hundreds of accounts in a quarter.
- An appetite change. They exit a class, or a state, or tighten enough that your renewals stop fitting.
- A commission change. Applied to nearly half your revenue at once.
- A contingency miss. One bad year on the book that dominates your results.
- A non-renewal decision on a segment you built a niche around.
The common feature is that your income moves and you had no vote.
Measuring it properly
The number owners quote is the largest carrier's share. It is a reasonable first look and it hides something: four carriers at 25% each is a very different business from one at 70% and nine small ones, and both can be described as "our biggest is a quarter".
A concentration index fixes that by squaring each carrier's share and adding them. Squaring means large positions dominate the result, which is the behavior you want. Below about 0.18 is well spread; above 0.25 is concentrated.
Book Check computes this on your numbers and shows the arithmetic, including how much premium and how much annual commission sit behind your largest carrier.
Reducing it without wrecking the relationship
Do not move business you are happy with. Rewriting good accounts to hit a ratio is expensive and annoys clients.
Direct new business elsewhere. The cheapest way to reduce a percentage is to grow the denominator. Concentration falls without a single account moving.
Get the second market before you need it. The worst time to find an alternative is the month your main carrier exits. Appointments take time; get them while nothing is wrong.
Watch the segment, not just the carrier. Three carriers all heavily exposed to coastal property is concentration too, even though it looks diversified by name.
The honest limit
Some concentration is the price of a real relationship. A carrier who knows your agency, gives you underwriting latitude and answers on a Friday afternoon is worth having, and that relationship is built by giving them volume.
The goal is not zero. The goal is knowing the number, choosing it deliberately, and having somewhere else to go.
This is the most common reason an agency looks at a network, and not because the current carrier is bad. It is because there is no second door.
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