The Rate Mask
In 2024, Ontario auto premiums rose —. So a book that reported +6% growth that year did not grow at all — it shed customers and got paid more for the ones that stayed. Rate was covering the difference. Rate has now stopped.
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The top-line number your reporting showed.
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Subscription software
ARR up 9% on a 12% list-price rise is a shrinking customer base wearing a growth chart. The renewal cohort tells you; the revenue line does not.
Anything sold through inflation
Grocery, freight, construction, legal billing — five years of price rises let volume decline hide inside revenue growth. Deflation makes every one of them visible at once.
Compensation tied to top line
Bonuses paid on revenue growth pay out through a hard market regardless of whether the book grew. The plan cannot tell the difference; the market eventually can.
Valuation multiples
A book bought on revenue growth during a hard market is a book bought on rate. When rate goes, the multiple meets the unit trend that was always underneath it.
Revenue is price times units, and only one of those is yours. A hard market pays you for customers you are losing. A soft market stops.
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What this cannot tell you. This is the market's rate, not yours. Your own average written premium moves with your mix, your territory, your deductibles and how much of your book actually renewed — so the implied unit figure is "what your units did if you took market rate", not a count. If you know your own average premium change, use it: this is most useful as a first approximation for a book you have not decomposed. Brokerage commission carries a third term — a commission rate that can move on its own — so if yours changed, that part of the swing is not rate and not units.
Rate data from the Ontario auto and residential insurance rates series and the hard and soft market indicator. Contains information licensed under the terms of the King's Printer for Ontario. Adapted from Statistics Canada, table 18-10-0004; this does not constitute an endorsement by Statistics Canada of this product. Nothing here is financial, insurance or legal advice.