Book of business valuation
Also called: book valuation, agency valuation, value of an insurance book
Book of business valuation is estimating what an agency's book is worth, usually based on the recurring renewal commission it produces and how reliably that revenue continues.
Buyers look at more than the size of the book. Persistency, the mix of products and carriers, client age, and how dependent the book is on one agent all change what it is worth.
Clean data helps: a book whose renewals, lapses and household relationships are documented is easier to value than one spread across spreadsheets.
Owners planning a sale, a merger or succession need to know what drives value early, while there is still time to improve it.
"Ahead of the merger, the owners wanted a book of business valuation based on renewals and persistency."
What makes an insurance book of business worth more?
Buyers typically look at reliable renewal income, persistency, product and carrier mix, client age and how dependent the book is on one agent. Clean, documented data also makes a book easier to value.