Retention has two different meanings when you are talking about insurance and risk.

Retention in regards to an agent or broker's clients refers to the client who has renewed their policy and stayed a loyal client. Retention is an important part of the total picture for an agency or brokerage. It is far less expensive to maintain an old client then to generate new business. Clients leave an agent or broker for many reasons including moving out of the territory, death, disposal of assets or dissatisfaction with the service levels they have received. A high retention rate is usually 90% or better.

Retention in regards to Risk Management is quite a different scenario. If you choose retention as a method of controlling your risk then it means you are prepared to pay for any claims out of pocket. Some of the ways this can be done is by establishing a fund where money not spent on insurance premiums are held in reserve, having resources to borrow the necessary funds or setting up a captive insurer.