BizTerm Definition
Earned Premium
Full Definition

(1) The part of the total property/casualty policy premium which applies to the portion of the policy period which has already expired. (2) The portion of a premium which is the property of an insurance company, based on the expired portion of the policy period. E.g., a $300 premium for a one-year policy beginning July 1 would amount to an earned premium of $150 the following January 1. (3) That portion of a policy's premium payment for which the protection of the policy has already been given. For example, an insurance company is considered to have earned 75 percent of an annual premium after a period of nine months of an annual term has elapsed.

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