Metrics used by P&C Insurance


# Metric Business Definition
1 Net Earned Premium "Net Earned Premium" - It's the portion of a policy’s premium that applies to the expired portion of the policy and calculated at an even rate throughout the policy term. 
2 Net Written Premium Total premium written after re-insurance cost.
3 Gross Written Premium Gross Written Premium - Total premium written by insurer before deductions
4 Technical Earned Premium Earned premium before any underwriting deviations ( discounts or surcharges ).
5 Technical Written Premium Written premium before any underwriting deviations ( discounts or surcharges ).
6 Net Earned Exposure Earned Exposure is the portion of a policy’s expoure, calculated in days, that applies to the expired portion of the policy and calculated at an even rate throughout the policy term until policy expires or cancelled. In case of Auto the primary unit of exposure is the  insured vehicle.
7 Average Earned Premium Earned Premium / Earned Exposures
8 Quoted Premium Total premium quoted in the document while issuing the quote.
9 Issued Premium Total Premium of registered policy irrespective of whether policy is new or renewal.
10 New Premium Total Net Written Premium of new policies registered
11 Renew Premium Total Net Written Premium of renewed policies
12 Sum Insured
 The total value of the vehicle
13 Gross Paid Loss The total paid loss before any deductions
14 Net Paid Loss The amount of paid losses net of deductibles, salvage and subrogration.
15 Net Incurred Loss The total amount of paid claims plus case reserves. 
16 Incurred Losses Capped ( ~ $50K) Claims with incurred losses below approximately $50,000 (USD).
17 Incurred Losses Capped ( ~ $25K) Claims with incurred losses below approximately $25,000 (USD).
18 Ultimate Loss Ultimate losses are the sum of Incurred Losses along with Incurred But not reported losses (IBNR).
19 ALAE Allocated Loss Adjustment Expenses -  Expenses are specific to each claim
20 ULAE Unallocated Loss Adjustment Expenses - Expenses those are general in nature, which cannot be assigned to a particular claim. 
21 Frequency The number of claims directly related to the number of exposures, thus claim incidence is expressed in terms of frequency per exposure.
22 Severity Average loss per claim.  Currently calculated based on Incurred Losses.
23 Pure Premium The amount included in the rate per exposure unit required to pay for losses.  It is usually calculated by dividing expected losses by earned exposure units.
24 Opex Operational Expenses are general administrative expenses incurred by the business like expenses related to marketing, office costs etc.
25 Commission Commisions paid to producer/agent
26 Bonus Bonus amount awarded to producer/agent
27 Policy Fee Flat fee to offset any expense incurred for issuing or registering the policy
28 Installment Fee Installment fee charged for the policy
29 Third Party Services Premium Third Party Services Premium associated with Policy / Coverage.
30 Combined Ratio (COR) The combined ratio (%) is calculated by taking the sum of incurred losses and expenses and then dividing them by earned premium. 
31 Claim Count Number of Claims in a given exposure period
32 Quote Count Number of Quote in a given exposure period
33 Issue Count Number of policies issued in a given period