https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3APremium_receivable 2026-04-29T18:06:25Z Revision history for this page on the wiki MediaWiki 1.43.8 https://www.insurerbrain.com/w/index.php?title=Definition:Premium_receivable&diff=9637&oldid=prev 2026-03-11T05:38:23Z

<p>Bot: Creating new article from JSON</p> <p><b>New page</b></p><div>📋 &#039;&#039;&#039;Premium receivable&#039;&#039;&#039; is an accounting asset on an [[Definition:Insurance carrier | insurer&#039;s]] balance sheet representing the amount of [[Definition:Premium | premium]] that has been earned or invoiced but not yet collected from [[Definition:Policyholder | policyholders]], [[Definition:Insurance agent | agents]], or [[Definition:Insurance broker | brokers]]. In insurance financial statements, premium receivables often constitute one of the largest asset categories, reflecting the time lag between when coverage incepts and when cash is actually received. The figure appears in both statutory and [[Definition:Generally accepted accounting principles (GAAP) | GAAP]] reporting, though the treatment of allowances and aging schedules can differ between the two frameworks.<br /> <br /> ⚙️ When a policy is bound, the insurer records the expected [[Definition:Gross written premium (GWP) | gross written premium]] and simultaneously creates a receivable for the unpaid portion. As payments arrive — whether directly from the insured or channeled through an intermediary such as a [[Definition:Managing general agent (MGA) | managing general agent]] — the receivable balance decreases. Insurers typically maintain aging schedules that flag overdue amounts at 30, 60, and 90-day intervals, and they may apply an [[Definition:Allowance for doubtful accounts | allowance for doubtful accounts]] to reflect the likelihood that some portion will never be collected. In [[Definition:Delegated underwriting authority (DUA) | delegated authority]] arrangements, the receivable may sit on the books of the [[Definition:Coverholder | coverholder]] until funds are remitted to the carrier, which adds a layer of complexity to reconciliation.<br /> <br /> 💡 Accurate tracking of premium receivables directly affects an insurer&#039;s [[Definition:Solvency | solvency]] position and [[Definition:Cash flow | cash flow]] management. Regulators scrutinize the age and collectability of these balances because inflated receivables can mask underlying financial weakness — a company that books substantial premium but struggles to collect it may face [[Definition:Liquidity risk | liquidity]] problems when [[Definition:Claim | claims]] come due. For [[Definition:Insurtech | insurtech]] platforms that facilitate real-time premium collection through digital payment rails, reducing the receivable cycle has become a competitive differentiator, enabling carriers to deploy capital more efficiently and report cleaner balance sheets.<br /> <br /> &#039;&#039;&#039;Related concepts:&#039;&#039;&#039;<br /> {{Div col|colwidth=20em}}<br /> * [[Definition:Premium]]<br /> * [[Definition:Gross written premium (GWP)]]<br /> * [[Definition:Accounts receivable]]<br /> * [[Definition:Premium trust account]]<br /> * [[Definition:Earned premium]]<br /> * [[Definition:Allowance for doubtful accounts]]<br /> {{Div col end}}</div>

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