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What refers to the portion of the premium that applies to the expired part of the policy period, representing the insurer’s revenue for the exposed risk they have already assumed under the insurance contract?
An earned premium is the portion of an insurance premium that has been "earned" by the insurance company by providing coverage for a certain period of time. It is typically calculated by dividing the total premium by the number of periods covered by the policy and multiplying it by the number of perRead more
An earned premium is the portion of an insurance premium that has been “earned” by the insurance company by providing coverage for a certain period of time. It is typically calculated by dividing the total premium by the number of periods covered by the policy and multiplying it by the number of periods elapsed. The earned premium process involves recognizing the revenue from the premium as it is earned over time rather than all at once. This process helps insurance companies accurately reflect the amount of coverage they have provided and helps them manage their financial obligations.
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