Missouri Property and Casualty Insurance Practice Exam

Written premium refers to the gross amount of premium an insurance company expects to receive for policies in force during a specific period, without consideration for whether the premium has actually been collected or earned. This includes both earned and unearned premiums, which means it encompasses the total premium calculated for all active policies, regardless of when the payment is received.

Understanding written premium is essential in the insurance industry, as it provides insights into the company's expected revenue from its policies and its overall financial health. It reflects the total amount billed to policyholders during a given period, allowing insurers to assess their business's growth.

In other contexts, "earned premium" refers specifically to the portion of the written premium that the insurer has recognized as income based on the coverage period consumed, while "unearned premium" represents the portion that has been collected but not yet earned, as the coverage extends into the future.