The term new business is used in car insurance to differentiate policies written in response to new car insurance applications to that of renewal business. Car insurance companies use this differentiation to measure, amongst other things, the profitability of new business.

New business can come from a number of sources such as direct applications for car insurance made to the company, telephonic applications, internet applications and also through an insurance agent of the company or an insurance broker. Any new business that is generated through an agent or broker will cost the insurance company commission while direct business through the internet is more profitable to the insurer. Renewal business is when a car insurance policy is renewed, usually when the policy was in place for a year and thereafter annually.

Within the first few years of a new business car insurance policy claims could be much higher than the premiums earned on the policies. The term used by insurance companies when this happen is new business strain. The longer a car insurance policy stays in place without any claims made on it, the more profitable it will be for the insurance company who can then offer these clients cash-back bonuses or no-claim bonuses.