Change In Net Premiums Written

What Does Change In Net Premiums Written Mean?

The change in net premiums written refers to the annual percentage change in net premiums written by an insurance company. Insurers use this figure to assess their performance. By calculating this change, they can evaluate their ability to sustain controlled growth through capital generation.

Insuranceopedia Explains Change In Net Premiums Written

Insurance companies measure their performance based on the premiums they collect. Net premiums written refer to the amount of premiums retained by the insurer after assuming risk. In other words, net premiums written are the total premiums the company writes during a specific period, minus any premiums paid for reinsurance, and plus any premiums received for reinsuring another company.

To calculate changes in net premiums written, the company compares the net premiums written in the current year to the previous year and expresses the difference as a percentage. Typically, an increase indicates that more insurance policies were written, while a decrease suggests fewer policies were issued. A decline could occur if the insurer offers uncompetitive premium rates compared to other companies in the market, or if new competitors enter the market offering similar products.