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📝 '''Net written premiums''' represent the total [[Definition:Premium | premiums]] an insurer records on policies issued or renewed during a given period, minus the portion [[Definition:Ceding | ceded]] to [[Definition:Reinsurer | reinsurers]] under [[Definition:Treaty reinsurance | treaty]] and [[Definition:Facultative reinsurance | facultative]] agreements, plus any premiums assumed from other carriers through [[Definition:Assumed reinsurance | inward reinsurance]]. This metric captures the volume of risk the insurer retains on its own books after all reinsurance transactions are accounted for, making it a more meaningful gauge of retained exposure than [[Definition:Gross written premiums | gross written premiums]], which reflect business produced before reinsurance offsets.

🔄 The calculation starts with [[Definition:Direct written premium | direct written premiums]] — business the insurer underwrites on its own policies — adds any premiums assumed from other companies, and subtracts [[Definition:Ceded premium | ceded premiums]]. An important distinction separates net written premiums from [[Definition:Net earned premium | net earned premiums]]: written premiums reflect the full contractual amount at the time the policy is bound or renewed, whereas earned premiums recognize revenue proportionally over the coverage period through the [[Definition:Unearned premium reserve | unearned premium reserve]] mechanism. A [[Definition:Property and casualty insurance | property and casualty]] insurer that writes a twelve-month policy on January 1 records the entire premium as written in the first quarter but earns it ratably over the year. This timing difference means that net written premiums measure business volume and growth trajectory, while net earned premiums align more closely with the revenue recognized in the [[Definition:Income statement | income statement]].

📊 For regulators, [[Definition:Rating agency | rating agencies]], and investors, net written premiums serve as the primary top-line metric for evaluating an insurer's market position, growth rate, and risk retention strategy. The ratio of [[Definition:Net written premiums | net written premiums]] to [[Definition:Policyholder surplus | policyholder surplus]] — commonly known as the [[Definition:Net premium-to-surplus ratio | net premium-to-surplus ratio]] or leverage ratio — is one of the oldest and most widely used solvency indicators, with benchmarks varying by line of business and jurisdiction. A company that grows net written premiums rapidly without commensurate surplus growth raises leverage concerns, while one that cedes a very high proportion of gross premiums may generate thin margins and face [[Definition:Counterparty default risk | counterparty risk]] on its [[Definition:Reinsurance recoverables | reinsurance recoverables]]. Across reporting regimes — [[Definition:US GAAP | US GAAP]], [[Definition:Statutory accounting | U.S. statutory]], [[Definition:IFRS 17 | IFRS 17]], and [[Definition:Solvency II | Solvency II]] — net written premiums remain a standard disclosure, though the mechanics of recognizing assumed and ceded business can differ in detail.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Gross written premiums]]
* [[Definition:Net earned premium]]
* [[Definition:Ceded premium]]
* [[Definition:Net premium-to-surplus ratio]]
* [[Definition:Unearned premium reserve]]
* [[Definition:Assumed reinsurance]]
{{Div col end}}

Definition:Net written premiums - Revision history

PlumBot: Bot: Creating new article from JSON