Unearned premium relates to the portion associated with protection still to be provided under the reporting basis.
The distinction that matters
It is not automatically the amount a customer receives on cancellation; refund terms, fees and applicable rules must be checked.
What to check
- Distinguish accounting from refunds.
- Read cancellation provisions.
- Review relevant reporting notes.
Example to discuss
A customer cancelling mid-term requests the contractual refund calculation rather than using an insurer’s accounting balance.
This is a hypothetical comparison, not a customer claim or a determination of cover.
Jurisdiction and scope
Use the definition in the report being analysed. Changes in business mix, reinsurance, estimation and reporting methods can affect interpretation. These measures do not determine whether an individual claim is covered.
Sources and further reading
General information only. The policy, schedule and applicable rules determine the actual position. For a personal decision, use an appropriately qualified adviser or the relevant provider.