View source for Definition:Written premiums

💰 '''Written premiums''' represent the total amount of [[Definition:Premium | premium]] an insurer has recorded on policies issued or renewed during a specified period, regardless of whether those premiums have yet been collected from [[Definition:Policyholder | policyholders]] or earned through the passage of coverage time. This figure is one of the most fundamental top-line metrics in the insurance industry, serving as the primary measure of an insurer's business volume and market share. Written premiums are reported on both a [[Definition:Gross written premiums (GWP) | gross]] basis — before any [[Definition:Cession | cessions]] to [[Definition:Reinsurance | reinsurers]] — and a [[Definition:Net written premiums (NWP) | net]] basis, after deducting premiums ceded under [[Definition:Reinsurance | reinsurance]] agreements, giving stakeholders a view of both total production and retained exposure.

📊 The distinction between written, [[Definition:Earned premiums | earned]], and [[Definition:Unearned premium | unearned]] premiums is central to insurance accounting. When a one-year policy is written on January 1, the full annual premium is recorded as written premium immediately. However, that premium is recognized as [[Definition:Earned premiums | earned]] only proportionally over the policy period — by June 30, half has been earned and half remains as an [[Definition:Unearned premium reserve | unearned premium reserve]] on the [[Definition:Balance sheet | balance sheet]], representing the insurer's obligation to provide coverage for the remaining six months. This distinction holds under both [[Definition:US GAAP | US GAAP]] and [[Definition:IFRS 17 | IFRS 17]], though IFRS 17 introduces additional complexity by recognizing revenue through the [[Definition:Contractual service margin (CSM) | contractual service margin]] release pattern rather than simple pro-rata earning. Under [[Definition:Statutory accounting | statutory accounting]] frameworks used by regulators in markets like the United States, written premium figures feed directly into [[Definition:Risk-based capital (RBC) | risk-based capital]] calculations and leverage tests, making accurate reporting essential for [[Definition:Solvency | solvency]] monitoring. Analysts and [[Definition:Rating agency | rating agencies]] scrutinize written premium trends to evaluate growth trajectory, market positioning, and whether an insurer is expanding prudently or chasing volume at the expense of [[Definition:Underwriting discipline | underwriting discipline]].

📈 Tracking written premiums over time reveals much about the health and direction of both individual carriers and the broader market. Rapid growth in written premiums can signal successful product launches, market-share gains, or favorable [[Definition:Hard market | hard-market]] conditions with rising rates — but it can also mask deteriorating underwriting quality if growth is driven by aggressive pricing or loosened terms. Conversely, declining written premiums may reflect disciplined [[Definition:Cycle management | cycle management]], deliberate withdrawal from unprofitable segments, or competitive pressure. Regulators monitor the ratio of [[Definition:Net written premiums (NWP) | net written premiums]] to [[Definition:Policyholder surplus | policyholder surplus]] as a basic leverage indicator: a ratio that climbs too high suggests the insurer is writing more business than its capital can safely support. For [[Definition:Reinsurance | reinsurers]], ceded written premiums from their cedants are the equivalent incoming metric, and shifts in ceded volumes provide early signals about changes in [[Definition:Retention | retention]] strategies and market confidence across the primary insurance sector.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Gross written premiums (GWP)]]
* [[Definition:Net written premiums (NWP)]]
* [[Definition:Earned premiums]]
* [[Definition:Unearned premium reserve]]
* [[Definition:Premium]]
* [[Definition:Combined ratio]]
{{Div col end}}