What means gross written premium?

Gross Written Premium (GWP) — the total premium (direct and assumed) written by an insurer before deductions for reinsurance and ceding commissions. Includes additional and/or return premiums.

What are net premiums written?

Net premiums written is the sum of premiums written by an insurance company over the course of a period of time, minus premiums ceded to reinsurance companies, plus any reinsurance assumed. Net premiums written represents how much of the premiums the company gets to keep for assuming risk.

How is premium written calculated?

In other words, it is the number of sales that an insurance firm makes in exchange for the premium. For example, if a company gets 100 new customers which will pay $100 each in the span of a year, the company’s written premium will be (100*100) $10,000.

What are direct premiums written?

Direct premiums written are the total premiums received before considering reinsurance ceded. Direct premiums written represent the growth of a company’s insurance business during a given period. It can include both policies written by the company and policies written by its affiliated companies.

What does it mean to have gross premiums written?

(From EIG 8-K filed Nov 14, 2007) When a non-life (property and casualty) insurance company issues a contract to provide insurance against loss, the revenues (premiums) expected to be received over the life of the contract are called gross premiums written.

How is reinsurance deducted from gross premiums written?

Insurance companies often purchase reinsurance from another insurance company to protect themselves against the risk of a loss above a certain threshold; the cost of reinsurance (reinsurance premiums) is deducted from gross premiums written to arrive at net premiums written.

When do non-life insurance companies write gross premiums?

When a non-life insurance company closes a contract to provide insurance against loss, the revenues (premiums) expected to be received over the life of the contract are called gross premiums written.

Which is the correct definition of net premiums written?

Net Premiums Written. Net premiums written is gross written premium (direct written premium plus assumed written premium) less ceded written premium.