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📝 '''Net written premiums (NWP)''' is the total volume of [[Definition:Premium | premiums]] an insurer records on policies issued or renewed during a reporting period, minus premiums [[Definition:Ceded reinsurance | ceded]] to [[Definition:Reinsurer | reinsurers]]. It reflects the amount of risk the insurer retains on its own [[Definition:Balance sheet | balance sheet]] after transferring portions to reinsurance partners, making it one of the most fundamental measures of an insurer's scale and net exposure. Unlike [[Definition:Gross written premiums (GWP) | gross written premiums]], which capture the total policy revenue before reinsurance, NWP reveals how much premium income actually stays with the company to cover claims, expenses, and profit.

🔢 Computing NWP is straightforward in principle — subtract ceded written premiums from gross written premiums — but the composition of an insurer's [[Definition:Reinsurance program | reinsurance program]] can make the relationship between gross and net figures complex. A company with extensive [[Definition:Quota share | quota share]] treaties will show a larger gap between GWP and NWP than one relying primarily on [[Definition:Excess of loss reinsurance | excess of loss]] protection, because quota shares cede a proportional slice of every dollar of premium while excess of loss contracts only trigger payments above specified attachment points. Accounting standards govern when premiums are recognized as written: under [[Definition:US GAAP | US GAAP]] and most [[Definition:Statutory accounting | statutory accounting]] regimes, premiums are written at policy inception, whereas [[Definition:IFRS 17 | IFRS 17]] focuses on the recognition of the contractual service margin and insurance revenue over the coverage period, which changes the timing and presentation of net premium figures. Analysts comparing insurers across jurisdictions must be attentive to these differences to ensure like-for-like comparisons.

📈 Tracking NWP over time provides a window into an insurer's growth trajectory, [[Definition:Underwriting | underwriting]] appetite, and reinsurance strategy. Rapid NWP growth without corresponding increases in [[Definition:Policyholder surplus | surplus]] or [[Definition:Capital | capital]] can signal that an insurer is stretching its capacity, a concern that regulators monitor through ratios such as the [[Definition:Net leverage ratio | net leverage ratio]] and premiums-to-surplus metrics. Conversely, declining NWP may indicate intentional portfolio pruning, market softening, or competitive pressure. [[Definition:Rating agency | Rating agencies]] weigh NWP trends alongside profitability and reserving metrics when assigning [[Definition:Financial strength rating | financial strength ratings]], and investors use NWP as a baseline for calculating valuation multiples such as price-to-book relative to net premium volume. For reinsurance brokers arranging programs, understanding a client's NWP composition across lines of business is essential to designing protection that aligns with the cedant's retained risk profile.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Gross written premiums (GWP)]]
* [[Definition:Net earned premiums]]
* [[Definition:Ceded reinsurance]]
* [[Definition:Policyholder surplus]]
* [[Definition:Net leverage ratio]]
* [[Definition:Reinsurance program]]
{{Div col end}}

Definition:Net written premiums (NWP) - Revision history

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