Insurers accounts Flashcards
What is gross written premium
Money in: What you have charged the customer
What is outward reinsurance premium
Money in: What you pay the reinsurers on that account
What is net written premium
Money in: Gross written premium - outward reinsurance premium - unearned premium
What is unearned premium
Money in: A motor fleet incepted on 1st July. The premium was £12k. At the end of the year you have £12k in the bank account. Half way through the year you will have only £6k. The unearned premium will be the other £6k
If a motor fleet was incepted on 1st October for £12k what will the unearned premium be in January 2022.
Money in: £9k as 3 months has been earned.
What is the net reinvestment return
Money in: money you make or the money you hold. Insurers sit on this money and put it into shares etc.
If you add your net earned premium and your net investment return what does this do
Tells you your money in
What is gross claims incurred
Money out - what you pay the policyholder.
What is reinsurers share
Money out- they give you bacck
What is claims net of reinsurance
Money out: gross claims incurred - reinsurers share
What are acquisition costs
Money out: broker commission
What are other operating expenses
things for running insurance company
How to work out your profit before tax
Net earned premium + net investment returned = total income
Claims incurred net of reinsurance, broker commission and other expenses = total expenses
Income - expenses = profit before tax
