From the Insurance Company's Perspective, What Is the Difference Between

question 32

Multiple Choice

From the insurance company's perspective, what is the difference between written premium and earned premium?

• A) There is no difference; they are effectively the same thing.
• B) Written premiums are those that belong to the insurer; earned premiums do not belong to the insurer.
• C) Written premiums are the total premiums collected by the insurer; earned premiums are those that belong to the insurer.
• D) Written premiums reflect the total amount of coverage provided to insureds; earned premiums reflect the net profit of the insurer.

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Definitions:

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product and constitute a significant portion of the production costs.

Operations

The day-to-day activities necessary for a business to function, including production, sales, and administration.

Adjusted Cost

A financial figure that has been modified to take into account specific factors or changes, such as depreciation or returns.

Operations

The daily operations required to manage a business, such as production, sales, and administrative tasks.