Unearned Premium
‘Unearned premium‘ (UEP) refers to the portion of insurance premium paid to an insurance company that the insurer has not yet earned because the company has not yet provided the associated risk coverage. An insurance company records unearned premium as a liability on its balance sheet because it owes risk coverage in exchange for that premium.
Insurers use this number to track future obligations.
Read this article to learn more.
See also: earned premium, premium