Earned Premium

‘Earned premium’ (EP) is an accounting term that refers to the portion of an insurance premium that the insurer has ‘earned’ and can therefore recognize as revenue on its income statement.

An insurer begins to earn the premium once an insurance policy term begins and the insurer starts providing the associated risk coverage. EP is that portion of the total premiums the insurance company has collected for which it has already provided risk coverage. Insurers use this number in calculating performance metrics such as the company’s loss ratio and combined ratio.

Read this article to learn more.
See: premium, unearned premium, written premium