Insurance lead ROI calculator: what each policy really costs you
Cost per policy is what you spent on leads divided by the policies you wrote. From rates alone, it’s the price per lead divided by your contact rate × quote rate × close rate. Enter your own numbers below to see cost per policy, payback and lifetime ROI for up to four lead vendors. Nothing you type is saved.
Example numbers, not benchmarks. Replace them with yours.
Shared by every vendor
Per vendor
Results
Vendor A
- Leads billed
- 90
- Policies written a month
- 4.05
- Cost per quote
- $133
- Lead-to-policy rate
- 4.5%
- First-year commission vs lead spend, a month
- $577 vs $1,800
Vendor A pays back in about 47 months, once renewals come in. To break even in the first year, a lead would need to cost $6 or less.
Your numbers are saved in the link, so you can bookmark it or send it to a partner.
Track this automatically, by vendor, every month.
In Agency Edge, you upload the lead files your vendors send you, and every lead is matched to the sale it became — so cost per policy and ROI by vendor stay current without a spreadsheet.
How we calculate
For each vendor, for one month:
- Leads billed = leads bought × (1 − credited returns)
- Lead spend = leads billed × price per lead + other monthly cost
- Contacts = leads billed × contact rate
- Quotes = contacts × quote rate
- Households = quotes × close rate
- Policies written = households × policies per household
- Cost per policy = lead spend ÷ policies written
- Cost per household = lead spend ÷ households
- Cost per quote = lead spend ÷ quotes
- First-year commission per policy = premium × new-business commission × (1 − early cancels)
- Renewal commission per policy, year k = premium × renewal commission × (1 − early cancels) × retention^(k − 1), for k = 2 … N
- Lifetime commission per policy = first-year + every renewal year up to N
- First-year ROI = (policies × first-year commission − lead spend) ÷ lead spend
- Lifetime ROI = (policies × lifetime commission − lead spend) ÷ lead spend
- Pays back in = the first month in which a policy’s commission to date covers its cost per policy (first year spread evenly over 12 months, each renewal year likewise)
- Most you could pay per lead = (first-year commission × policies per lead billed − other monthly cost ÷ leads billed), never below $0
Money rounds to whole dollars, percentages to one decimal. Where a figure would divide by zero it shows “—”.
How to use this calculator
- Pick a month and a vendor. Use the same month for every vendor you compare.
- Pull the counts from your lead log and the vendor’s invoice: leads sent, leads credited back, and what you paid.
- Count issued policies only. A policy that was written but never issued didn’t earn you anything.
- Use your own commission schedule for new business and renewals — yours, not a published average.
Cost per policy beats cost per lead
A cheap lead isn’t a cheap policy. Take two made-up vendors. Vendor A sells leads at $12; you reach 15%, quote 40% of those and close 20% — that’s $1,000 for each policy. Vendor B charges $30; you reach 40%, quote 60% and close 30% — that’s $417 a policy. B costs two and a half times as much per lead, and well under half as much per policy. Price per lead tells you what the vendor charges; cost per policy tells you what a customer costs you. Read more in what is cost per policy and what is cost per quote.
First-year vs lifetime ROI in P&C
Most lead calculators stop at the first year. That fits life and final expense, where most of the commission arrives up front. Auto and home are different: a policy that renews keeps paying you every year it stays. A vendor that looks like a loss after twelve months can be your most profitable one over five years, if its customers stay. That’s why this calculator asks for retention and renewal commission, and shows when each vendor pays back. See what is retention rate.
Captive agencies
Captive agents are paid on their carrier’s schedule, and new-business and renewal rates are often different. Some schedules also pay more for bundled households or for certain lines. Enter the rates from your own agent compensation schedule — the calculator doesn’t assume any carrier’s numbers — and set policies per household to match how often your new customers bundle.
Independent agencies
Independent agencies earn different commission from each carrier, and sometimes contingent or bonus pay on top. For a vendor comparison, use the blended commission rate on the policies that vendor actually brings you. If one vendor’s customers go mostly to a carrier that pays more, give that vendor its own commission rates with “Different for each vendor.”
How to compare lead vendors fairly
- Same dates for everyone. Compare one month against the same month.
- Issued policies only. Written-but-not-issued sales flatter a vendor.
- Take credited returns out. A credited lead cost you nothing and shouldn’t count.
- Match each sale to its lead. A customer who came in through a vendor’s lead belongs to that vendor, even if they called the office directly later.
Read how to compare lead providers, managing lead credits and returns and the complete guide to insurance lead ROI.
What’s a good cost per policy?
One that’s lower than what the policy earns you. If your cost per policy is below your first-year commission per policy, the vendor pays back inside a year. If it’s above, you’re counting on renewals — so check retention before you buy more. We don’t publish “average” lead costs here: they vary by state, line, lead type and vendor, and the only numbers that matter are yours.
Track this automatically
Agency Edge does this every month, for every vendor, from the files you already get. Upload your lead files — it works with lead files from EverQuote, QuoteWizard, SmartFinancial, MediaAlpha, ZipQuote and more — and each lead is matched to the sale it became. You see leads billed, leads converted, policies written, cost per policy and ROI by vendor, side by side. Read how to read the ROI page or upload your first leads file.
Before you ask
How do I calculate cost per policy for insurance leads?
Divide what you spent on a vendor’s leads by the issued policies those leads became. From rates alone: price per lead ÷ (contact rate × quote rate × close rate × policies per household).
What’s the difference between cost per lead, cost per quote and cost per policy?
Cost per lead is the vendor’s price. Cost per quote is your lead spend divided by the quotes you gave. Cost per policy is your lead spend divided by the policies you wrote — the one that tells you what a customer costs.
What is a break-even lead price?
The most you could pay per lead and still earn back the cost in the first year: first-year commission per policy × policies per lead, less any other monthly cost per lead.
Should I count submitted or issued policies?
Issued. A policy that never issues earns no commission.
How does retention change lead ROI?
Every year a policy renews, it pays renewal commission again. Higher retention means more years of commission from the same lead spend, so lifetime ROI rises and payback comes sooner.
Is a cheap shared lead better than an exclusive lead?
Only if it costs less per policy. Put both in the calculator with your own contact, quote and close rates and compare cost per policy, not price per lead.
How long should a lead vendor take to pay back?
That’s your call, but know the number: if a vendor doesn’t pay back within the years you expect a customer to stay, it’s costing you money.
Does this work for captive and independent agencies?
Yes. The math is the same; use your own commission rates.
Can Agency Edge track this automatically?
Yes. Upload the lead files your vendors send you, and each lead is matched to the sale it became, so ROI by vendor stays current every month.
Is my data saved?
No. The calculator runs in your browser and your numbers live only in the link. If you ask us to email your results, we keep your email address to send them.
EverQuote, QuoteWizard, SmartFinancial, MediaAlpha, ZipQuote, State Farm, Allstate and Farmers are trademarks of their owners. Agency Edge isn’t affiliated with or endorsed by them.