Glossary · Insurance agency commissions
Book of business
A book of business is all the policies and clients an agency or producer writes and services, usually measured by premium or commission revenue.
What it means
The book is what an agency sells when it sells, what lenders and buyers value, and what a departing producer may try to take with them. In the independent agency system, agency agreements commonly give the agency ownership of its expirations, the right to the renewal relationship, but the details are in each agreement and in producer contracts.
For commission checking, the book is your side of the comparison: the policies you expect to be paid on. A statement only shows what the carrier paid; your book shows what should have been there.
How it shows on a commission statement
The book doesn’t appear on a statement, but every statement line should map to a policy in it. Lines you can’t map, and policies in the book with no line when one was due, are the two most useful lists reconciliation produces.
Example
| Policy | Renewal due | On statement | Result |
|---|---|---|---|
| EX-14003 | Oct 1 | Yes | OK |
| EX-14021 | Oct 4 | No | Missing: ask carrier |
| EX-14050 | Oct 12 | Yes | OK |
| EX-14077 | Oct 19 | No | Missing: check if renewed |
Common mistakes to check
- A book with cancellations and lost accounts never marked, so missing lines aren’t really missing.
- Business placed through an aggregator recorded under the carrier, so it can’t be matched to the right statement.
- Valuing a book by premium alone when commission rates differ widely across it.