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Sat Sep 30, 2023
Average Gross premium
Gross premium / number of exposures
Average net premium
Net premium / Number of exposures
Average Sum insured
Total sum insured / Number of exposures
Allocated loss adjustment expenses(ALAE)
Correspond to those costs that the insurer is able to assign to a particular claim.
Net commission ratio + expense ratio + Net incurred claim ratio
Number of incurred claims / Number of exposures
Gross (net) lncurred claim amount / Number of lncurred claims
Operating expenses / Gross written premium
An exposure is the basic unit of risk that underlies the insurance premium
Earned Exposure Year
Exposure per unit of year of risk coverage.
Underwriting profit + investment income on insurance funds
Gross Earned Premium (GEP)
Premium from direct business written + Premium on reinsurance accepted + Adjustment for change in reserve for unexpired risk
Gross Direct premium
Premium received from direct business written (including coinsurance premiums)
Gross written premium
Premium from direct business written + Premium on reinsurance accepted
Gross claims paid
Claim amount paid on direct business written + Claim amount paid on reinsurance accepted business
Gross lncurred claim
Claim amount paid (gross) + Claims outstanding (inclusive of IBNR) amount at the end of the Financial Year (gross) - Claims outstanding (inclusive of IBNR) amount at the beginning of the Financial Year (gross)
Gross lncurred Loss Ratio
Gross incurred claim / Gross earned premium
Gross claims Paid Loss Ratio
Gross claims paid / Gross earned premium
Commission paid on direct written business + Commission paid on reinsurance accepted business.
Net Earned Premium (NEP)
Premium from direct business written + Premium on reinsurance accepted - Premium on reinsurance ceded +/- Adjustment for change in reserve for unexpired risk
Premium from direct business written + Premium on reinsurance accepted - Premium on reinsurance ceded
Net claims paid
Claim amount paid on direct business written + Claim amount paid on reinsurance accepted business -Claim amount received from ceded business
Commission paid with respect to direct business + Commission paid with respect to Reinsurance accepted - Commission received with respect to Reinsurance ceded
Net lncurred Loss Ratio
Net lncurred claim / Net earned premium
Net claims paid loss ratio
Net claims paid / Net earned premium
Net Commission ratio
Net commission / Net Premium
Number of lncurred claims
Number of settled claims (i.e. claims are closed with / without payment) + open claims
Premium deficiency reserve
Premium deficiency shall be recognized if the sum of expected claim costs, related expenses and maintenance costs exceeds related reserve for unearned premium reserve.
Net Written Premium/ Gross Written Premium
lt is time from when the event occurs through to the time that the insurance company is notified of the event.
Salvage and subrogation
Salvage represents any amount that the insurer is able to collect from the sale of damaged property. Subrogation refers to an insurer's right to recover the amount of claim payment to a covered insured from a third-party responsible for the injury or damage.
lt is the time period between notification to the Company and the payment of the claim.
ASM / RSM (as per Regulations) - Available Solvency margin / Required Solvency margin
Estimated time taken for settlement of claim from the date of loss occurrence.
Net earned premium - Net incurred claims + Net Commission - Operating expenses
Unallocated loss adjustment expenses
are the claim related expenses but cannot be allocated to a specific claim. Examples of ULAE include salaries, rent, and computer expenses for the claims department of an insurer.
Unearned Premium Reserve (UPR)
A reserve for unexpired risks shall be created as the amount representing that part of the premium written which is attributable to, and to be allocated to the succeeding accounting periods
Unexpired Risk Reserve (URR)
The reserves in respect of the liabilities for unexpired risks and determined as the aggregate of Unearned Premium Reserve and Premium Deficiency Reserve
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