Mapping tier jumps — the carrier contingency multiplier.

Tier-jumping is the largest synergy a carrier premium map reveals, and the map is what makes it bankable — because the value isn't intuitive. A buyer who models only the acquired book's contingency misses the part where the combined volume re-levels the buyer's own book to a higher rate. The premium map lays both sides out per carrier, which is the only way to see the full multiplier rather than half of it.

§ 01 · The tier scheduleHow contingency rates step.

A sample carrier contingency tier schedule shows the shape: nothing under $1M, 1.0% from $1M–$2.99M, 2.0% from $3M–$4.99M, 3.0% from $5M–$7.49M, rising toward 4.0% at $10M+. Two structural features make the math powerful. First, the rate is retroactive to the entire tier — crossing $3M means 2.0% applies to all $3M, not just the dollar over the threshold. Second, tier-to-tier jumps often double the rate (1.0% to 2.0%). Both features mean a volume increase that crosses a tier produces a disproportionate contingency lift — which is exactly what an acquisition can engineer. A loss-ratio gate (standard ceiling 60%) sits over all of it: above the gate, all contingency is forfeited regardless of tier, which is the trap covered in loss-ratio blending.

§ 02 · The multiplier effectThe buyer's book re-levels too.

The multiplier is the insight a premium map surfaces and a back-of-envelope misses. In the worked example, the combined $5M book earns $150K of contingency where the two agencies earned $80K apart — a $70K synergy. The decomposition matters: $40K of it is the lift on the target's $2M (from $20K to $60K), but the other $30K is the lift on the buyer's existing $3M, which now earns the higher tier rate it couldn't reach alone — 43% of the total synergy comes from re-leveling the book the buyer already owned. At a 7× EBITDA multiple, the $70K is roughly $490,000 of incremental enterprise value from a single carrier on a single deal. The pre-close model error pattern is predictable: crediting only the target-side lift leaves 30%–50% of the real tier-jumping value off the page, which is why the map has to include the buyer's own premium, not just the target's. The synergy-modeling framework this feeds is in tier-jumping math.

§ 03 · Two inputs and the EV impactWhat the map requires.

Building the map is mechanical once a buyer has two inputs per carrier, for both sides: written premium and the current contingency rate. With those, the map computes the standalone contingency for each agency, the combined tier position, and the incremental lift — per carrier, then summed across the overlap. The enterprise-value translation is what makes it a negotiating tool: a $70K incremental contingency at a 7× multiple is ~$490K of enterprise value, so a buyer with carrier overlap can quantify exactly how much more the target is worth to them than to a financial buyer with no overlap. A materiality threshold keeps the map honest: if the incremental tier-jumping lift is less than 10% of the total projected deal synergy, carrier premium mapping isn't the deal's primary story, and a buyer shouldn't over-weight it. But where the overlap is real and the volumes cross tiers, the map is the single most defensible synergy line a buyer can put in front of a lender or an investment committee.

§ 04 · Three caution scenariosWhen the map disappoints.

The map also disciplines against over-claiming, because three scenarios produce thin or zero tier-jumping value. Thin tier deltas — a jump from 2.0% to 2.25% on $5M is only $12.5K of lift, not the doubling the lower tiers showed. Tier ceilings — if the buyer is already in the top tier, additional volume produces no rate uplift at all, only more dollars at the same rate. And loss-ratio headroom constraints — the combined book may breach the 60% gate, in which case the tier-jump is irrelevant because all contingency is forfeited. A buyer who builds the map sees all three before crediting the synergy, which prevents the over-aggressive modeling that gets challenged in diligence. The discipline is the same one the map enables on the upside: quantify per carrier, decompose the buyer-versus-target lift, and check the loss-ratio gate before booking the value. The loss-ratio trap that can zero the whole thing is in loss-ratio blending.

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