What is a book of business in insurance?
Your book of business is the set of in-force policies you have written and are entitled to service and earn from. It is the asset an insurance career actually builds, valued on the renewal income it produces, discounted by how reliably that income persists.
A book is worth what a buyer believes it will keep paying. Which is why persistency and retention drive valuation far more than written premium does: a large book that lapses is a small book with extra steps.
Two things make a book worth more than the sum of its policies. It should be documented. A buyer pays less for relationships that live in one person's head. And it should be diversified: heavy concentration in one carrier, one product or one lead source is a risk that gets priced in.
| Renewal income | the base |
|---|---|
| Retention above 90% | premium multiple |
| Retention below 80% | compresses the multiple |
| Owner dependency | a discount |
| Documented, transferable systems | a premium |
Multiples vary by size, growth and profitability. See the valuation piece.
Longer read: /blog/how-much-is-an-insurance-agency-worth