Glossary
Book of Business
The complete set of policies and clients an agency or individual producer services, and the recurring commission they generate.
A book of business is an agency's principal asset. Its value rests on renewal commission, so the metrics that matter are retention, loss ratio, carrier mix, and how concentrated the book is in a few large accounts.
Books are bought and sold, and valuation typically works from a multiple of recurring revenue adjusted for those factors. Clean commission records materially affect the price: a buyer who cannot verify what the book actually earns will discount for the uncertainty.
See also
- Renewal Retention — The share of expiring policies or premium an agency keeps at renewal, the single clearest measure of book health.
- Producer — A licensed individual who sells insurance and services clients, usually compensated by a share of the commission on the …
- Commission Reconciliation — The process of verifying that the commission a carrier actually paid matches what the agency was contractually owed, lin…