What Is a Book of Business in Insurance?
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A book of business is every policy an agency or a producer has written and still holds.
What it is
It counts every policy in force today: this year's new business, renewals, and policies moved in from elsewhere. Cancelled, lapsed and non-renewed policies leave it.
Each policy in the book that renews pays a renewal commission without a new sale, which is why the book, not the year's sales, is most of an agency's value.
Example. A producer has written 450 policies over her career, and 380 are still in force. Her book is 380 policies.
How to measure its health
- Retention: how many customers renew. See What Is Retention Rate?
- Policies per household: a household with several policies has more reasons to stay.
- Net growth: policies added minus policies lost. See What Is Net Gain/Loss?
- Premium per household: rising when customers add coverage.
Why health beats size
A big book that leaks needs new sales only to stand still.
Example. Two books each start with 1,000 policies and add 300 a year. One keeps 90% of its policies a year and grows to 1,200. The other keeps 70% and grows to only 1,000: all 300 new policies went to replacing the 300 it lost.
How Producify works it out
The Book page in Producify scores your office's book out of 100 for each year and shows the factors and the typed figures behind that score.
The page covers the whole office. Its customer factors, such as Customer retention and Multi-line rate, come from the numbers you type each month.
Multi-line rate there is policies in force ÷ households, such as 1.8 policies per household. See Read the Book page.
Frequently Asked Questions
How is a book different from a pipeline?
A book is business you have already written. A pipeline is prospects you have not closed yet.
Can producers own their own book inside an agency?
It depends on the producer agreement. Some let a producer take their customers when they leave; others forbid it. Put it in writing.
Is book of business the same as in-force premium?
Related, but not the same. In-force premium is the dollars of everything active; a book is often counted in policies. Both matter: premium drives commission, and policy count drives the service work.
See the health of your book
Producify's Book page gives your book a score out of 100 for each year, with the factors behind it.