Earned Premium

Earned premium is the portion of the total insurance premium paid by a policyholder that has been 'earned' by the insurance company — corresponding to the period of insurance coverage that has already elapsed during the policy term. For example, if an annual premium of ₹12,000 is paid upfront and four months of the policy period have passed, the insurer has earned ₹4,000 (representing the coverage already provided), while the remaining ₹8,000 is 'unearned premium' (a liability on the insurer's balance sheet representing future coverage obligations). Earned premium is the primary revenue measure used in insurance company income statements and is a key driver of underwriting profitability metrics such as the combined ratio and loss ratio. For investors on Ventura Securities analysing listed insurance companies — including General Insurance Corporation of India, New India Assurance, SBI General, ICICI Lombard, and other non-life insurers — earned premium growth, retention ratios, and the relationship between earned premiums and claims incurred are foundational metrics for evaluating underwriting quality and business momentum.