Earned Premium


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Related to Earned Premium: unearned premium

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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In another health category, guaranteed renewable, earned premiums posted a more modest 2%.
The increase in the net profit for the fourth quarter in comparison to the fourth quarter of the previous year relates primarily to increase in net earned premium, lower net claims incurred as well as the strong performance of the investment portfolio.
The loss ratios have been calculated as a ratio of net claims and net earned premium.
Gross premiums increased by 5 per cent compared to 2012 and net earned premiums grew by 4 per cent compared to 2012.
Net earned premiums at BD4.08m saw an increase of 4pc from BD3.93m in the second quarter of last year.
Contributing to growth in net earned premium was the increase in the motor, medical and life portfolio.
The $8.3 billion net gain on underwriting in first-quarter 2007 amounts to 7.6 percent of the $108.6 billion in net earned premiums for the period.
The same business rule, like an earned premium calculation, need not be programmed into multiple systems but is stored once and is accessible by multiple programs.
Net earned premium income is BD10.7m as against BD10.5m earlier.
Policy acquisition costs increased $21.7 million, or 33.1% to $87.4 million for the year ended December 31, 2015 from $65.7 million for the same period in 2014, primarily due to the Company's ongoing growth in gross earned premium.
If an insurer is large enough, in addition to reviewing reported claims frequencies, it can monitor the reported loss ratios (paid losses plus case reserves related to earned premium) on an accident-quarter basis with quarterly evaluations.
Net earned premium was $1.06 billion, an increase of $149.8 million, or 16%, from $908.2 million in the fourth quarter 2014.