An insurance agency book of business plays a crucial role in making your insurance agency the best it can be. Yet, the process of building a book of business can seem daunting, whether you are starting your own insurance agency or have an existing insurance business. However, Energia Partners is here to help remove the stress with this quick guide that shows you how to build an effective insurance agency book of business.

What is a Book of Business?

A book of business is the collected information of a business’s clients or accounts. Insurance agencies utilize this information from past, current, and prospective clients to build winning business strategies and improve customer relationship management (CRM). Cultivating this client information, from names and contact information to specific account details about purchased products or services, is invaluable when gaining insights into how to better cater to client needs. 

Information you might find in a book of business includes:

  • Client Name
  • Contact Info
  • Occupation
  • Assets
  • Liabilities
  • Product/Service History
  • Current Insurance Policies
  • Purchasing Goals
  • Referrals

Analytics drawn from a well-built book of business can also provide a snapshot of how well the business performs. Information gleaned from a book of business can pinpoint business strengths and weaknesses, as well as the overall performance and value of accounts on record. So, the more information that can be gathered in a book of business, the more of an edge it can give you when growing your insurance business. 

How is an Insurance Agency Book of Business Different?

An insurance agency’s book of business is unique from other industries in how client information is used and valued. An agent’s or agency’s book of business represents all of the policies written by an insurance company. Therefore, it is a valuable tool that allows agents to track clients and their policies. 

Building a good book of business takes time, anywhere from three to five years, and it should be continuously updated. Alternatively, purchasing a book of business from existing agents or those retiring from their insurance business can be an effective way to jumpstart your insurance business. However, you’ll want to be sure the book of business fits your business goals, target clients, and territory when evaluating and purchasing a book of business. Energia Partners specializes in insurance agency book of business valuation and purchasing and can help you every step of the way.

Before You Build a Book of Business

Due to the highly competitive nature of insurance, a book of business is vital to finding success and can make or break an insurance agency’s ability to grow. So, before you set out to build an insurance agency book of business, some due diligence is required.

You want your insurance business to provide the best products and services that fit the needs of clients in your region. So, look at local demographics, buying trends, competition, legislative policies, public works projects, economic climate, and other regional considerations that can affect how you conduct business. In addition, looking at the region’s consumer rating scores for various insurance products, including Home, Life, and Auto can go a long way in helping identify products that align with current or potential high-value customers.

Building Your Insurance Agency Book of Business

A well-structured book of business provides the foundation for building your insurance agency. There are steps you can take to ensure your book of business delivers a rock-solid platform from which you can launch a successful insurance business. 

Cultivate Your Client List

The heart and soul of any good book of business is a well-kept client list. Gather as much information about past, current, and prospective clients. Clients make your business go round, so maintaining client lists can help improve customer relationships and provide products that best align with their needs. It also makes it easier to identify the clients that provide the best sales opportunities and gives a glimpse into levels of retention and loss.

Identify High-Value, Low-Risk Clients

Ideally, you want to grow the business without getting bogged down in high-risk, low-reward policies. So, keep in mind when building your book of business to focus on high-value and low-risk clients that offer greater sales growth potential and higher retention levels. 

Assess Value 

Understanding your client’s risk and retention level allows you to dive deeper into the overall value of each client’s policies. As a result, you can better understand which policies generate the most robust sales and which lack quality sales growth. In addition, by assessing the value of each policy, you’ll be able to zero in on what you can do to create greater sales opportunities, provide better products to suit your client’s needs, and grow your insurance business.  

Set and Manage Expectations

While it might seem obvious, managing expectations can also prove one of the most challenging aspects of building a good book of business. The obstacles presented by particular regions, clients, and competition can affect how you measure your business’s success rate. So, by using the information gathered in your book of business, you can set and manage expectations that align with your business development and client relations goals.

Refine and Update

It is best never to think of a book of business as completed. Rather think of it as a work in progress that requires constant attention. Refine your client list by adding updated information about policies, life events, or anything that gives you a better understanding of each client’s current status. Take the time to occasionally look at the information you can add or remove to make the book of business a leaner, meaner sales-generating machine. The more specific and up-to-date the details, the better.  

Energia Consulting Partners Can Help You Build Your Book of Business

Building a book of business might seem a frustrating proposition, yet you don’t have to let it derail your business development. Whether you are interested in selling your agency and want to put it in as strong a position as possible to increase its value – or are looking to build your agency’s current book of business by purchasing another insurance agency – Energia Consulting Partners can provide insider knowledge and expertise to help grow your business without the headache and hassle.

Energia Consulting Partners is an experienced, independent consulting practice that specializes in all aspects of the sale of an insurance agency with an emphasis on the Allstate & Farmers Insurance Company distribution model. Our consultants have more than 150 years of combined experience in the industry and over $600+ million in sales and purchases, with a proven track record of success!

Contact us, and together we’ll build a book of business that works for you.