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Earned Premium

   Also found in: Dictionary/thesaurus, Medical, Legal, Acronyms, Encyclopedia, Wikipedia 0.01 sec.
Earned Premium
In insurance accounting, the prepaid premium that an insurance company may count as profit because of the length of its exposure to risk. For example, suppose a policyholder pays three years' worth of premiums up front. After a year has gone by, the insurer may count one third of that premium as earned premium and therefore profit. Earning the premium only works if no claims exceeding the amount of the premium are filed; it there are claims, the insurer may take a loss.


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Net earned premium of the group increased to $53 million from $40 million a year ago, while gross written premium decreased to $85.
Net earned premium increased to US$ 53 million from US$ 40 million during the same period of 2008.
As a result, the rate of increase in incurred claims is outpacing growth in earned premium.
 
 
 
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